Tuesday, 03 November 2020 06:25

Farmlands profits in a challenging year

Written by  Staff Reporters
Farmlands chief executive Peter Reidie says the drop in revenue in the final quarter was “sobering”. Farmlands chief executive Peter Reidie says the drop in revenue in the final quarter was “sobering”.

Farmlands Co-operative has announced a $7 million net profit for the 2019/20 financial year.

The rural supplies co-op says this comes on top of more than $91.1m in monthly rebates, discounts and loyalty paid out to its 72,000 shareholders.

“The result has been built on turnover of $2.6 billion and revenue of $1.1 billion – numbers impacted considerably by both Covid-19 and challenging seasonal events,” chief executive Peter Reidie says. 

Reidie says Farmlands staff have tirelessly provided supplies and service to shareholders during “a challenging year” – including the lockdown period. 

He says creating a functioning e-commerce platform within four weeks to trade during Covid-19 Alert Levels 3 and 4 was a highlight.

“The fact we were able to trade at all during Alert Levels 3 and 4 came down to the hard work and dedication of the Farmlands team.

Reidie describes Farmland ‘Covid Click and Collect’ online store as a success story for the organisation and testament to the Farmlands Co-operative spirit. 

“Our shareholders needed us and we responded accordingly.”

He added that in just one month, the Click and Collect store brought in more than ten times more revenue than the previous e-commerce site had in an entire year.

Meanwhile, Farmland chair Rob Hewett says completing the three-year, $90m transformation programme was a key milestone in the financial year.

“Our co-operative performed well in the first half of the year and despite being affected negatively by the global pandemic in the second half of the year, we were pleased with the planning and rapid decision making of management – and the support from many of our business partners,” Hewett says.

Covid-19’s impact was most keenly felt in April, with a drop in revenue of more than 30%. 

Reidie describes the drop in revenue in the final quarter as “sobering” and in spite of the core role farming plays in the economy.

“Without the response we initiated including support of the wage subsidy, rent relief, staff remuneration sacrifice, supplier support and other austerity measures, Farmlands would have incurred a substantial loss.”

Hewett says, as a result of both the impact of Covid-19 and co-op’s acceptance of the government wage subsidy, it would be “inappropriate for it to return a Bonus Rebate to members this year”.

“While the board knows this is disappointing for shareholders, I am sure we all appreciate the unique nature of the climate we have traded in for the second half of our financial year, the heightened uncertainty this presents to the company and the need accordingly to preserve cash as much as possible until the outlook improves,” Hewett says.

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