Farmers have retained control of Farmers First, the sheep processor that exports more than 500,000 lamb carcasses annually.
Shareholders voted against the proposed election of three new directors nominated by Stephen Wood, former owner of the Farmers First abattoir, at the company’s AGM in Builth Wells on Monday (17 May).
Farmers First chairman Terry Bayliss claimed that electing three directors nominated by Mr Wood would have risked farmers losing control of the company.
Mr Wood owned the abattoir in Warwickshire before it was leased and then purchased by the company for £1.36m.
Today, the abattoir purchases about 12,000 lambs a week, some direct from farm and the rest via livestock marts.
The competitive pressure that the abattoir created among buyers of finished lambs gave farmers valuable influence up the supply chain, said Mr Bayliss.
“That is why the business was started and remains our mission today,” he said.
The consolidated balance sheet for the year ending 30 May 2015 shows shareholders’ funds in excess of £6m.
Mr Bayliss said there was “widespread grass-roots goodwill and appreciation for the company’s success as a farmer-founded and farmer-led business”.
Annual pre-tax profits at the group were £386,156 for 2015. But the annual accounts include a one-off provision of £632,895 for “taxation in dispute”, which relates to a film investment scheme entered into by the group a number of years ago.
A secondary effect of the scheme was to reduce the amount of tax payable by Farmers First – something HMRC is now challenging.
Clarification is being sought but if full tax now has to be paid, it would mean a post-tax loss of £310,743 in 2015 compared to a profit of £919,301 in 2014.
Even so, Mr Bayliss said a Farmers First investment programme would continue.
“Over only the past four years, investments include buying the abattoir freehold for £1.36m and installing solar panels, a biomass boiler and new boning hall for a combined £675,000 total.”
He added: “It is quite understandable that some busy farmers may not realise quite what a success this business is. Clearly, it is in farmer-shareholders’ long-term interests that they retain control of the company.”