Profits down at Hutchinsons after drop in spending on inputs

The withdrawal of plant protection products is a threat to the profitability of the agricultural sector, the chairman of Hutchinsons has warned.

The firm, which published its annual report this week, said profits dipped by 8% in 2019 after wet weather in autumn 2019 hampered farmers’ ability to plant crops and spend money on inputs.

Pre-tax profits fell from £10.4m in 2018 to £9.5m in the year ending 31 December 2019, although turnover remained flat across the two years at £234m.

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The company, headquartered in Cambridgeshire, offers advice on more than one million hectares and has some 440 staff.

David Hutchinson, chairman and co-owner of the business, said the first half of year had been more successful, although revenue had been boosted by sale of products about to be revoked, including those containing the active ingredients chlorothalonil, flurtamone and diquat.

The number of key active ingredients that have been withdrawn from the market in recent years due to revocation is a major concern for the future success of British agriculture, he said. 

“If approval for the use of glyphosate is withdrawn when the current five-year approval period expires, the implications for European agriculture are seriously adverse.”

“Our business performance in the first half of 2020 has been in line with lower-than-usual expectations due to reduced crop areas and poor weather.

“We expect conditions to improve after harvest and for more normal acreages of autumn-sown crops to be planted.”

The business acquired DKB Crop Protection, a Darlington-based agronomy and inputs company, in February 2020, but at year end was sitting on cash reserves of £33.7m, down from £39.1m in 2018.

“The continuing strength of the HLH Group’s cash reserves is very pleasing and ensures that significant financial resources are readily available for the smooth running of our business,” he added.

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