Profit back but Farmlands not holding back

Media Release
October 12 2004

Profit back but Farmlands not holding back

A $10 million increase in sales to $270 million has Rural Retailer Farmlands set to take even greater strides within the rural retail market this year, Chief Executive John Newland said today.

“Our decision to continue investing in new opportunities, despite a very difficult first half to the year, is now paying off,” Mr Newland said.

Announcing a $3.6 million before tax profit for the financial year 2004, Mr Newland said he was pleased with the company’s performance and is very confident of the year ahead. Last week Farmlands returned a bonus rebate of $1.5 million to its 17,500 members and in June distributed $1.7 million in bonus shares.

Mr Newland said although Farmlands profit was back on last year’s $ 4.8 million, Farmlands signalled to member shareholders early on the company would not hold back on investment for future growth.

“Our approach has certainly placed us in a strong position to capitalise on the buoyancy which has returned to the farming sector.

“As a co-operative our core focus is not solely profit driven. We must deliver the best deal to our shareholder members so they receive the most competitive price for their rural supplies, especially when the rural economy is depressed.

Investments during the past year included:

- Entering the Taranaki region with a store at Stratford
- Moving into Northland for the first time through purchasing an existing rural retail business in Whangarei
- Introducing the Premier Petz range into another 14 stores throughout the North Island.
- Re-locating Napier and Otaki stores to new and larger premises.

“Premier Petz, a major marketing development aimed at attracting more household and city customers to Farmlands. The “store within a store” concept is exceeding expectations and we are now seeing far wider customer base beyond traditional farmers and lifestyle farmers,” Mr Newland said.

Another significant highlight has been the company’s charge card Farmacard which exceeded $100 million in sales for the first time.

Fertiliser sales, which Farmlands no longer places a margin on, remained at the same level as previous years, reflected a 16% increase in volume. Fencing and chemicals were the other key areas of retail growth.

Looking ahead Mr Newland said the company will open in Hawera next month making it the company’s 30th store throughout the North Island.

Plans were also afoot to further expand the services available through Farmacard, and Farmlands was also working with its fertiliser supplier Balance Nutrients on bulk supply strategies.

Ends

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