Farmer supply and marketing business Countrywide Farmers is selling its livestock feed and forage, arable inputs and crop marketing businesses for £18.5m.
The group, which has 4,000 mainly farmer shareholders, was established in 1902 and will concentrate on selling farm and country supplies through its 53 retail outlets, online and through telephone orders.
The feed supply business, along with Countrywide’s fertiliser, silage additive and grass and maize seed interests, is being sold to Dutch company ForFarmers, which is more than 70% farmer-owned and which also bought the BOCM Pauls feed business in 2012.
Cambridgeshire-based crop production specialist Hutchinsons is buying the crop protection and cereal seed business, while Openfield will take on the crop marketing business. Countrywide will retain its turf and amenity and LPG businesses, where the directors believe Countrywide holds a competitive advantage and that there is the potential for long-term growth.
“This has been a difficult decision and comes at the end of a significant strategic review of how we can best deliver sustainable improvement in shareholder value,” says Countrywide chief executive John Hardman.
“We have concluded that Countrywide Farmers can best serve its customers and shareholders by investing in our Countrystore network and multichannel platform rather than our direct-to-farm business,” continues Mr Hardman.
“This has been a difficult decision and comes at the end of a significant strategic review of how we can best deliver sustainable improvement in shareholder value.”
John Hardman, Countrywide Farmers
“Our farm trading businesses have built a strong relationship over the years and this is reflected in the acquiring companies, who are all market leaders in their own right. They have been carefully selected by Countrywide as being, we believe, the best fit for our customers and staff alike.”
Countrywide Farmers employs about 1,000 staff and the sales will mean about 80 staff transferring to the new owners of parts of the business.
Countrywide Farmers aims to become the leading country store business in the UK through stores, online and telephone sales and the funds which these sales bring in will be used to deliver this strategy, it said.
“We remain committed to UK farming,” says Mr Hardman, “supporting farmers with more than 7,000 agriculture products available in store, catalogue and online, all reinforced by a dedicated field sales team. Our new focus and ability to invest will ensure we are well positioned to execute our strategy and to grow the business into a leading multichannel supplier to the UK’s rural community.”
Countrywide Farmers’ most recent accounts to 31 May 2014 were published in late August, with the mild winter of 2013-14 and a falling commodity market significantly affecting financial performance. Turnover fell 2.5% to £298.2m, while operating profit was down 55% to £1.907m.
ForFarmers is currently the main compound feed manufacturer to Countrywide. The feed business it will buy from Countrywide has a turnover of about £125m and represents about 400,000t of feeds, including straights. The transaction is subject to clearance by the UK Competition Authorities.