The result is up on last year’s $7million and, despite Covid-19, the co-op managed to achieve stable revenue of $1.1billion and increased turnover to $2.7billion.
Farmlands returned $94.2million to shareholders in monthly rebates, discounts and loyalty rewards. Shareholder numbers rose by 3000 to 75,000 members during the year ending June.
New chief executive officer Tanya Houghton said there had been a considerable uplift in e-commerce sales as a result of the company responding quickly during lockdowns.
‘‘As we come out of lockdown a lot of sales have returned to more traditional channels and we are continuing to see these [online] channels gain traction.’’
Farmlands’ investment in new platforms had allowed them to react, she said.
‘‘Covid is forcing a lot of change that is required and it’s giving us permission — there’s always a silver lining isn’t there — to take some action that is required for the Farmlands of the future and there’s more general acceptance or willingness to try those options.’’
The team was poised to leverage the business transformation project, Braveheart, this year to improve business performance and cost control, Ms Houghton said.
‘‘What I’m really mindful of is that we need to hark back to our historical DNA, which is about us being disrupters, in the future, and we have some really great ideas about how we are going to be delivering disruption moving forward.’’
Chief operating officer Kevin Cooney said it was a reasonable year from a revenue and turnover perspective as spending recovered after the first lockdown.
‘‘We saw a recovery in spend across the economy. Our card is quite a good proxy for [this] because members can use that card in a merchant network of 5000-odd businesses, so it was a broad-based recovery.’’
There was spending on hardware, machinery and ‘‘high street’’ type purchases, but offshore travel never recovered.
Much of the turnover growth came from card sales.
Southland storms, Canterbury floods and weather delays in the spring had influenced farm budgets, Mr Cooney said.
‘‘It was a stable revenue performance matched by good cost management. The key challenge there is ongoing issues around getting access to the right products at the right time.
‘‘That’s translated to us probably buying more than we normally would and sooner than we normally would.’’
As a result, more working capital was invested in stock so shareholders could get access to products, he said.
Shipping delays had resulted in lead times for orders extending from eight weeks to 16 weeks. The co-op was ordering in advance, particularly for animal health products such as magnesium.
Supply chains could be impacted for the next couple of years, Mr Cooney said.
Chairman Rob Hewett said Covid-19 would continue to disrupt business and the board had decided not to distribute a bonus rebate this year to protect against unforeseen downturns.
- By Tim Cronshaw
