Despite the ongoing uncertainty in the market which in turn has affected farmers' purchasing habits, Mole Valley Farmers has reported a solid year of trading to the year ending September 30, 2019.

Andrew Jackson, CEO for the accounting year, but handed over to Jack Cordery in May 2020, said the 2019 trading environment was hugely different to the previous year, where a late spring and drought created increased demand for ruminant feeds.

“With livestock producers benefitting from some exceptionally good growing conditions, our direct-to-farm volumes and revenues have been influenced by the weather,” said Andrew.

“Given the economic uncertainty surrounding Brexit that prevailed over the wider economy and the agricultural industry, our farming customers have been more cautious throughout the year and seem to have spent less on non-essential items.”

Despite this, the feed business exceeded budgeted volumes by 4.2% and demand for dairy products and ranges remained strong. There was a marginal increase in group revenue to £495m, thanks to commitment from Farmer Shareholders. Farmer Members again increased year-on-year, with numbers now exceeding 9000.

Group operating profit was £2.4m. Total group EBITDA was £7.7m – up from £5.1m in 2018.

Mole Valley Farmers has continued to invest in improving efficiencies and innovation to adapt to variable market conditions and help farmer members cope with similar challenges. This has included upgrading the business IT platform to Microsoft AX and driving technical developments in feed and the Precision Nutrition rationing programme.

The business has also worked hard to address issues surrounding product replenishment in store. On-shelf availability now features reliably at around 90%, thanks to an in-depth review of product flow and a focus on key product ranges.

Rural retailing stores achieved a sound result for the accounting year, delivering a 1.8% increase in revenue. This reflects the continued effort of the business to compete harder in a more rigorous trading environment.

In addition, the business reports:

• Store revenue: Mole Valley Farmers, £105.7m; Mole Country Stores, £91.7m; Bridgmans Farmdirect, £24.6m.

• £1.8m delivered in savings to farmer shareholders.

• £1.2m saving on new vehicles passed to customers.

• Fertiliser volumes exceeded 140,934 tonnes.

• Mole Insurance maintained a customer retention rate of more than 95%.

In the summer of 2019, accountancy errors were identified concerning the previous audited financial year. This was related to internal allocations between the various trading divisions of Mole Valley Farmers and stock item reconciliation. As a result, re-adjustments of around £3.8m have been made to the 2018 numbers.

A thorough review has been undertaken and processes have been implemented to ensure greater control over the business accounting systems. No fraudulent activity occurred. New integrated accountancy software has been installed, which will help prevent reoccurrence, alongside ongoing reviews of financial controls.