Suffolk-based Fram Farmers Group saw a 28% drop in operating profit before tax in the financial year to 30 June 2019, despite a record turnover.
The farmer-owned co-operative provides purchasing, grain marketing, insurance and administrative services to more than 1,400 farm businesses, through Fram Farmers and Fram Farmers Insurance Services.
It also supplies gas and oil to more than 4,000 retail customers and small businesses, through a commercial retail subsidiary called FramTrade.
Overall, the group achieved a consolidated operating profit before tax of £476,130 in 2018-19, compared with £665,523 the previous year – the highest in the co-op’s history.
More than two-thirds of the profit (£336,901) was attributed to the FramTrade business, which delivered a “strong performance”, albeit down from the “exceptional” levels of 2017-18.
Meanwhile, the Fram Farmers and insurance services businesses delivered a pre-tax operating surplus of £139,229, down from £201,214 the previous year.
However, the group’s turnover was up 8.9% on the year, rising from £195m to £212m.
Fram acknowledged it had been another challenging year for farmers, but described the balance sheet as “very strong” with capital and reserves closing at £4.39m, compared with £4m in 2017-18.
Looking to the future, the co-op plans to invest in IT systems and introduce new processes to optimise efficiency and reduce overhead costs.