Record sales for Farmlands Trading Society buck uncertain rural outlook
Farmers investing more to improve productivity
Hawke’s Bay-based rural retailer, Farmlands Trading Society, today reported record annual sales on the back of increased
spending by farmers and a rural focus on productivity.
Farmlands Chief Executive John Newland said Farmlands achieved a net profit after tax of $4 million for the financial
year to 30 June 2002 on record sales of $282 million and a $3 million increase in shareholders’ funds – equity – to $22
million. This compares with a $4.5 million net profit, sales of $265 million and equity of $19 million reported for the
previous corresponding period.
Mr Newland said “the North Island wide farmer-owned ‘retail networkrural is thriving against a background of lower
commodity prices and forecasts of an uncertain future because farmers are investing more to improve productivity.
“Membership grew by nearly 1000 during the year to 15,200, branch sales increased by $16 million and spending through
the company’s charge card “Farmacard” increased 21 per cent to $34 million,” Mr Newland said.
“Farmers are spending more on their farms and more on themselves. Fencing sales rose 24% and animal health products by
26%, sales grew by more than $1m in farm chemicals, hardware, seed and dairying supplies,” he said.
“In a year when there has been constant talk about lower producer/export returns and falling commodity prices, farmers
are not retreating.
“Their on-going investment strengthens farming infrastructure and our rural industry as they focus on more aggressive
strategies for growth,” he said.
“Underpinning this is the NZ farmer's sense of self determination for gaining the best deal, and they trust Farmlands is
working to reduce their supply costs.
“They are taking advantage of the company’s competitive pricing, the charge card benefits and its ability to meet their
needs.
“The strong support for co-operative ownership is a traditional way of farmers doing business – never under
capitalising, and funding growth from retaining a share in the profits.”
Last month, the company returned $2.3 million in bonus rebates and $2 million in its first bonus share issue. This saw
some members receive a bonus rebate of up to $4500.
Mr Newland said “we wanted our members to share directly in the benefits of a very solid trading performance and reward
the contribution they’ve given to our substantial growth.”
Looking forward, Mr Newland said he expects an exciting and challenging year as the company celebrates its 40th Birthday
and looks to further position itself as a leading rural retailer.
“Supplier indications tell us our market share is increasing at a faster rate than the market is expanding,” he said.
The company has more expansion plans underway and is also relocating existing stores in Whakatane, Napier, Wanganui and
Otaki.
A group of six Hawke’s Bay farmers established Farmlands in 1962 because they wanted access to cheaper farm supplies.
Today, Farmlands is one of New Zealand’s top 100 companies. It has 27 rural retail stores throughout the North Island
and a team of 200 staff selling everything from electric blankets, washing machines and gumboots to stockfood, fencing
gear and machinery. Through “Farmacard” members can also pay for their electricity, phone, fuel, insurance, groceries
and liquor.
Joining Farmlands involves a $550 investment and membership is now open to everyone, including schools, community
organisations and local authorities.
Farmlands will celebrate its 40th birthday in November.