‘Progressive year’ at Mole Valley despite disruptions

MOLE Valley Farmers reports another progressive trading year, with revenues, gross margin and operating profit reflecting a year-on-year increase for both agriculture and rural retailing for the year ending September 30 2018.

Agricultural business and rural stores grew by 8.7 per cent and 3.6 per cent respectively, while revenue across the group increased by more than 5 per cent to £490 million in the year.

This was due to several factors including a late spring, followed by a dry summer, which drove ‘out of sea- son’ demand for livestock feeds and other inputs. Group operating profit increased significantly over the previous year to £3.8 million. However, some exceptional and unavoidable one-off operating cost constrained overall net profitability before tax to £1.4 million.

Chief executive Andrew Jackson said: “Significant expense was associated with the intended acquisition of Countrywide Farmers, which unfortunately didn’t gain phase one approval from the Competition and Markets Authority.

“Fortunately, we did eventually manage to acquire three stores from the CF administrator; Penzance, Tavistock and Cirencester, each of which have since been well supported by local customers who had feared losing their local agricultural store.

“In addition, unbudgeted expenditure became essential to restore operational replenishment capability to our network of rural stores.”

At the start of the trading year, a scheduled move to a single, central distribution location took place. The intention was to consolidate warehousing requirements into one location and provide a more cost-effective delivery service to all stores.

But from late October until early summer, demand from stores exceeded operational capability, leading to poor product availability, added cost and some inconvenience for customers.

Mr Jackson said: “We have since reduced our reliance on central distribution and reinstated a more inclusive supply chain solution.

“This new approach has utilised supply chain opportunities, improved direct-to-store deliveries, corrected on-shelf availability, derisked the business from seasonal volume spikes and crucially, reduced costs back in-line with plan.”

Despite disruptions, the retail business delivered a respectable performance, with trading margins on plan, transaction numbers up and revenues increasing by £7.5 million to £218.1 million.

SWNS.com Last year’s dry summer drove out-of-season demand for livestock feeds, says Mole Valley chief executive Andrew Jackson