Grain co-operative Openfield doubles its profit
A FURTHER boost for the farmer-owned Openfield Group has been reported to its 2,700 members.
It plans to open a new advanced processing centre at Kettering operated by Camgrain for this year’s harvest, strengthening the business across eastern England the central Midlands.
Openfield reported operating profits of �4million in the year to June 30 – up by 122% on the previous year on turnover of �626m, which was increased by 30%.
This was largely driven by substantial increases in commodity prices when wheat prices on the LIFFE market more than doubled from about �100/tonne in June 2010 to nearly �220/tonne last April.
The results were achieved against the backdrop of volatile commodity markets, the implementation of new IT systems and further investment in the central storage network, said group managing director, Tim Davies.
“The results demonstrate the continuing progress made by the group in creating a business with strength and stability for the benefit of our farmer members and supply chain customers,” he added.
“All aspects of our business – grain, seed and fertiliser – recorded positive growth supporting our ambition of developing a business with strength across all sectors and we continue to invest in our core operations with the view of fulfilling our stated objective of becoming the best business in our sector as judged by our farmers and end-user customers.”
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“The significant volatility presented both opportunity and challenge – opportunity to generate profit as prices moved inexorably upwards and challenge in meeting the working capital requirements arising from increased prices,” added Openfield’s chairman, Richard Beldam.
The additional working capital requirement added to interest charges, which rose significantly from �600,000 to �1.1m in 2011.
“We continue to rationalise business activities in order to focus investment on core activities that support our supply chain operations and enhance opportunities for future growth,” said Mr Beldam.
“New facilities at Aberdeen Grain, Woldgrain and the new portside facility at Montrose operated by Angus Cereals will benefit members while enhancing Openfield’s ability to satisfy new markets.
The group, which is one of the largest suppliers of seed and fertilisers to farmers, handles about 4.6m tonnes of grain every year and markets more than 1m tonnes for the Openfield Network central storage member companies.
Mr Beldam said that shareholders’ funds increased by 8.7% or �1.8m to �22.4m. “We have increased the value of our net current assets by �7.8m to �8.5m and our shareholders’ funds of �22.4m remain one of the strongest in the industry. In addition, we have turned a net debt of �5.9m in 2010 into a cash surplus of �0.9m at 30 June 2011 with excellent cash management.
“Openfield is in an excellent position to generate future growth and we will continue to support farmers for whom we market grain, working with them to manage risk, improve the supply chain, reducing waiting times and rejections and improving the retention of value for our members,” said Mr Beldam.