Strong results from Mole Valley

Mole Valley Farmers’ commitment to and investment in farming and the rural sector has been reinforced by strong financial results for the year ending September 30, 2009.

Operating on a cooperative business model with just under 6,000 Farmer Shareholders, the business has increased turnover by 5.8% to £257.6m, an all time record in the face of challenging economic conditions and a significant fall in commodity prices. As a result of a 6.2% increase in operating profit to £3.6million, Farmer Shareholders will be rewarded with a £450,000 rebate, bringing the total to over £1m distributed back to shareholders since the launch of the scheme 3 years ago. The balance sheet of the business remains very strong with shareholders’ funds increasing by 10% to £27million.

Farmer Shareholding has increased by over 600 new members to a record level, alongside a substantial increase in Country members, with customers benefiting from the company’s procurement commitment to keep margins as low as possible across the wide range of products and services in the agricultural and retail businesses.

Overall, sales across Mole Valley Farmers and its retail subsidiary SCATS Countrystores have performed extremely well, despite the adverse financial conditions. The company has continued to invest in its feed mills, minerals plant and retail sites, with significant investment in Cornwall at MVF’s St Columb branch, the website, product research and development as well as joint initiatives with Taste of the West and Harper Adams University College.

David Burke, Chairman Mole Valley Farmers said: “The emphasis throughout the year has been on important cornerstones that underpin the whole business: a strong value offer, good customer service, continuity of supply and controlling overheads. This has enabled the company to pass back additional purchasing benefits to our members as well as continue to invest in the business and its people.”

The combined agri feed business, Mole Valley Feed Solutions, has contributed over £98 million (nearly 40%) of total turnover, with volume increasing to just under 340,000 tonnes of manufactured feed, a record, bucking the national and regional decline in compound feed usage. During the past three years, the company has made sustained investment in manufacturing facilities at its 4 feed mills and specialist minerals plant, as well as staff technical knowledge and expertise. Fourteen new ruminant products have been developed to help livestock producers tackle persistent problems including dry cow management, fertility, improving milk yield and daily live weight gain. Meanwhile, the Mineral Feeds Supplement business achieved a 27% sales increase, helped by livestock producer and trade customer demand as well as the development of innovative new products including organic minerals and rumen buffers. Forage and cereal seed sales increased substantially, with grass seed sales achieving a record 50,000 acres.

Although the economic downturn has hit the UK retail sector hard, Mole Valley Farmers Retail achieved record turnover, increasing revenue by 5.9% to £76.2m, with agricultural products accounting for 60% of total branch sales. The flagship South Molton branch in Devon contributed £14m, while turnover increased at the new-look St Columb branch in Cornwall, boosted by the substantial investment in new facilities, with a dedicated farm services area, drive through feed store and wider product ranges including locally sourced food. The MVF website and online retail store generated a significant increase in sales with over 19,000 orders and in excess of 25,000 registered users from all parts of the UK. Meanwhile, D & I Bridgman & Son, with its bespoke retail product offer and local service to the farming community in North Devon, achieved overall sales of £15.6m, with ‘direct to farm sales’ contributing £6.7m of turnover.

Since Mole Valley Farmers acquired SCATS Countrystores in 2002, the retail business has achieved an average 11% sales growth year on year, with turnover rising in the current year to a record £38m, an increase of 9.1% over last year. Despite the challenging retail market, 18 of the 19 SCATS Country stores across the South and South East England increased sales year on year helped by a 8.7% boost in customer footfall. The investment in the Surrey based Redhill store was completed in early 2009 with an outdoor retail and storage area as well as additional car parking. Meanwhile, construction began on the purpose-built store at Andover in a prime location next to A303, as well as the major redevelopment of the Dorchester store, both of which will be completed in spring 2010.

Andrew Jackson, Chief Executive Mole Valley Farmers said: “We anticipate trading conditions for 2010 to be every bit as challenging as 2009, as customer confidence remains finely balanced. Choice, quality, good service at competitive prices has never been more important and we greatly appreciate the support from our members and customers who are the very focus of the business.”

This year Mole Valley Farmers celebrates its 50th year since the foundation in 1960 by a small group of pioneering farmers in the South Molton area who decided to collaborate together. The aim was to bring cost benefits to its members through the principle of a farmer’s cooperative. Five decades later the same ethos remains as true today as then. Mole Valley Farmers is farmer owned through its farmer shareholders, with a board of drectors all of whom are active farmers.

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