Countrywide Farmers’ recent restructuring programme cost the farmer-controlled business 2.2m, leading to a pre-tax operating loss of 1.5m for the year ending 31 May 2005.
After tax and interest charges, the company returned a total loss of 3.1m.
Managing director John Hardman claimed group trading operations were much healthier following the reforms, adding: “We have a platform to develop the group’s unrealised potential for generating rewards for shareholders and employees alike.”
Deteriorating performance in the animal feeds sector had forced drastic restructuring, the costs of which the trading accounts had to bear, Mr Hardman said.
The firm, which has 11,000 farmer-shareholders, ceased manufacturing animal feeds at its Melksham site last August, with production of its compounded feed brands passing to BOCM Pauls.
This, and more than 50 redundancies, cost the firm 1.2m.
“But that is a write-off of assets and, as such, has not depleted our cash facilities,” said Mr Hardman.
Many ruminant feeders had moved away from compounds in favour of blends and straights, and this, coupled with higher distribution and haulage costs, had forced the changes, Mr Hardman said.
The group was looking at options for the Melksham site, which would bring cash back into the business.
Other sectors of the group’s business reported better performance.
Countrywide’s fastest-growing sector was energy and utilities.
Sales of fuel, electricity and telecommunications grew 45% on the year to return an operating profit of 800,000.
Its chain of Countrywide retail stores increased profits by 600,000 to 800,000.
The business opened five new branches this year, including one at Cirencester, Glos, which shares a site with the town’s new livestock market.
Mr Hardman admitted Countrywide Farmers had failed to deliver consistent returns to its members, but added: “The moves allowed a raft of cost savings in the agricultural business which will feed through into the figures this year.
The business is now on a stable platform and we can take it forward.”
Analyst David Pattinson of Plimsoll Publishing, which monitors companies in the agribusiness sector, said Countrywide Farmers remained a strong outfit, despite the latest figures.
“It’s easy to be diverted by the red ink.
Although not particularly profitable – the group has barely returned a profit in the last five years – it hasn’t allowed the losses to weaken it.”
Mr Pattinson said the group was not in a firefighting position.
“It’s clear they have a strategy in place. But it will take some time to get into better shape.”