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Farmlands Reaps Rewards in Rural Retail Sector

October 11 2005

Farmlands Reaps Rewards in Rural Retail Sector

Farmlands Trading Society has reported record sales of $305 million and record membership having capitalised on ownership uncertainty within the rural retail scene.

The co-operative today announced a $4 million before tax profit for the financial year 2005, compared with a $3.6 million profit last year.

Mr Newland said Farmlands’ performance spoke for itself because the company had reported steady growth for the past three years.

However, there was no doubt Farmlands had continued to benefit from the acquisitions going on in New Zealand’s rural retail sector.

“It’s certainly had a positive impact on our business. When there is uncertainty in the market place people look for confidence and security because they want to do business with companies they can trust and rely on,” Mr Newland said.

Farmlands had gone against the trend continuing to expand in turnover and shareholder growth while others have retrenched and rationalised in the rural service sector. As the number of retailers servicing the rural sector decreases, Farmlands profile increases, Mr Newland said.

For example, in the past two years Farmlands has opened two stores in Taranaki (Stratford and Hawera) and plans to open in Pukekohe next month – its first move into the Auckland market, he said

“This year another 1200 shareholders have joined Farmlands giving us record shareholding of 18,500. This has been mainly driven from the dairy and pastoral farmers as well as lifestyle block owners.

The company had performed strongly across all three areas of its business - retail, the charge card business, Farmacard, and fertiliser throughput.

Retail sales had increased $8 million to $130 million and shareholders had put $19 million more through Farmacard bringing sales to $122 million.

Sales indicated farmers were spending more on fencing supplies, animal nutrition, seed and water dynamics.

Farmer spending on fencing had increased 10 per cent to $19 million

Another highlight had been the company’s store within a store concept PremierPETZ, which is now in 26 Farmlands branches and exceeding $1 million in sales.

Looking ahead Mr Newland said all indications were for continued growth.

“The first quarter has been particularly strong, despite the poor outlook for the pipfruit sector.”

“This has been helped by an exceptional spring and excellent grass growth almost everywhere in the North Island.”

Farmlands had no specific plans beyond the opening of Pukekohe and further developing business in that area along with Taranaki.

“It will be more of the same because it’s working well,” Mr Newland said.

Last week Farmlands returned half the profit as a bonus rebate to its 18,500 members.

Farmlands annual General Meeting will be held on Tuesday November 1 at the Awapuni Racecourse, Palmerston North.

ENDS

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