Fifty Years on And Farmlands Continues to Flourish

MEDIA RELEASE: Farmlands Trading Society Limited

Fifty Years on And Farmlands Continues to Flourish

Fifty years on from when it was first established rural retailer Farmlands Trading Society continues to flourish, announcing solid growth in the North Island rural merchandise sector.

Farmlands Chief Executive Officer Peter Ellis says despite a ‘soft’ market for rural merchandise in the second half, Farmlands recorded a $90 million increase in turnover to $773 million, in the year to 30th June 2012 up 13.1% on the previous year.

Mr Ellis says rebates to its members increased by $3.7 million to $50.4 million and shareholder numbers have increased by 925 to 27,925.

Pre-tax profits before loyalty rebates were similar to the previous year at $5.5 million and $5.2 million would be distributed to shareholders in the form of a loyalty rebate. This distribution includes $2 million in cash with the balance being shares in the Society and credit card commissions paid by the Company in lieu of loyalty rebates.

“I believe these growth achievements have been delivered in a market that has delivered no growth, supporting our assertion that we continue to gain market share in the North Island,” says Mr Ellis.

The trading year provided robust results for the first half of the year, however the company was impacted by caution in purchasing intentions by our shareholders in the second half, combined with extremely favourable growing conditions through summer and autumn reducing the demand for supplemental feed for livestock.

Mr Ellis said he believed Farmlands has delivered above market growth, which was supported by an increase in same store sales and the opening of new stores during the year in Kamo, Helensville, Inglewood and Huntly. The stores in Te Awamutu and Matamata were also relocated to purpose built premises.

“We now believe we are a market leader, if not the market leader in the North Island rural merchandise market.”

The company is currently building a new store in Gisborne to relocate to from its existing premises. This is scheduled to open by January 2013.

Mr Ellis says the expansion and relocation programme that has been occurring over the last four years is coming to an end, and the focus moving forward is on ensuring the company fully exploits the benefits of the scale it has created.

Farmlands Board Chairman Lachie Johnstone says leveraging of the investment will come in the form of optimising of systems, people and processes.

“The outcome will ensure that not only does Farmlands maintain its competitive position, but it generates sufficient return after loyalty rebates to shareholders to reinvest in future.”

In acknowledging Farmlands’ 50th anniversary, Mr Ellis and Mr Johnstone paid tribute to “a group of innovative and determined farmers” who pioneered the Farmlands business in 1962.

They say they continue to do what those farmers set out to do, to provide a service for collective purchasing and selling, with the aim of reducing input cost to members.

Mr Ellis says that guiding principle remains enshrined in the Farmlands Constitution and underpins all its strategic and operational activity.

“We are proud to be celebrating 50 years of the existence of Farmlands and to be marking this milestone with positive results for our shareholders.”

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