One of the UK’s biggest farming companies, Strutt & Parker Farms, has been put up for sale.
Established 100 years ago by farming neighbours Edward Strutt and Charles Parker, the business farms more than 30,000 acres and has an estimated value in excess of £200m.
Of this, 13,000 acres are owned by the company, with the majority on Grade 2 and 3 land in in Essex, Suffolk and Cambridgeshire.
See also: Co-op farms sold to Wellcome Trust
The remainder is on a mix of traditional tenancies and Farm Business Tenancies, as well as a substantial acreage of contract farmed land.
The business is diverse, earning roughly half of its £21m income from farming.
Extensive residential, office and other commercial lettings, as well as substantial renewable energy interests and other diversified businesses bring in the remainder.
Because it operates as a company, the business will be sold in a single transaction, a complex proposition and one which is difficult to value.
Significant interest likely
Potential buyers were contacted last night to confirm the launch and speculation is already rife as to who may buy the business. The weak pound means that the sale is likely to attract interest from abroad.
No guide price is being issued for Strutt & Parker Farms, but sources involved in the transaction are understood to be looking for a sum in excess of £200m.
The timing of the sale is also drawing comment. The official line is that as the number of shareholders has grown to 80 over the generations, and that the business is a very different one to the original farming concern and shareholders simply felt that now was time to sell.
Biggest sale in four years
This is the biggest farming sale since The Co-operative Group sold its 16,000ha farms business for £249m to the Wellcome Trust in 2014.
Trading as Farmcare, that business had a turnover of £59.1m in 2013 and an operating profit in the region of £7m.
Strutt & Parker Farms had an operating profit of £3.319m in the year ended 31 March 2017.
Profit before tax was bumped up to £7.710m that year, mainly on account of a £4.491m profit on property sales.
The business presents medium- to long-term opportunities to realise substantial capital and revenue growth, says marketing agent Savills, which has been retained in conjunction with accountant Deloitte.
Strutt & Parkers Farms’ owned farms
- Lawn Hall Farm, Essex – 2,217 acres – arable, residential property and commercial lets
- Lavenham Farm, Suffolk – 3,215 acres – arable with irrigation, large residential and commercial property book, farmstead with potential for redevelopment
- Marshes and East Hall Farms, Essex – 4,952 acres arable with irrigation, extensive commercial and residential properties, strategic development potential
- Landermere Farm, Essex 1,697 acres – mixed farming operation with combinable and root crops, commercial lets, further development potential
- Keyworth House Farm, Cambridgeshire – 943 acres – Grade 1 commercial arable farm let on FBT until September 2026
These properties bring in an annual non-farming income of almost £1.6m.
Also included in the sale:
- Whitbreads Business Centres in two converted Essex farmsteads – 48 serviced office units, fully let, annual rent income of about £400,000
- 121 freehold houses, cottages, bungalows and flats let on various tenancy types earning more than £1m
- Renewable energy operations – two anaerobic digestion plants, wind, ground and roof mounted solar sites generating income of £7.6m with growth potential
- Recently launched natural burial business
- Medium- and long-term development opportunities