Openfield Group Limited, the farmer-owned grain marketing and farm inputs business, has reported operating profits £1.65 million for the financial year to 30th June 2013.

Group turnover decreased 8% to £710m on the back of higher average commodity prices offset by a lower volume of grain handled (16% decrease). This is reflective of the significant challenges arising from the poor 2012 harvest which hit both quantity and quality of UK farm production.  The primary impact on the Openfield business of the 2012 harvest was the disappearance of the export markets for UK crops which resulted in longer stock holdings and a near threefold increase in interest charges from £0.6m to £1.8m.

Consequently, profits before tax fell from £2.6m in 2012 to breakeven in 2013, a creditable result in the circumstances.  Net Assets increased by £1.1m or 5% to £21.2m reflecting actuarial gains on the now closed defined benefit pension scheme partially offset by property devaluations following the five year property valuation exercise required under UK generally accepted accounting principles (GAAP).

Whilst borrowings for the 2013 year end increased, from a net debt position of £8.2m in 2012 to a net debt of £28.6m in 2013, this was entirely linked to the working capital cycle with old crop stock being held for longer to service the consumer demand before new crop was available.  Net debt fell substantially in the immediate post year-end period, as expected.  Openfield has no core debt utilising cash primarily to invest in stock and undertake price hedging activity.

“The results confirm our continued progress to building a solid business that places the farmer at the heart of the grain supply chain while capturing value for our members and delivering excellent service to our supply chain customers,” said Openfield Chief Executive Officer, James Dallas.

“Never was our support for UK farmers more important than in the aftermath of one of the poorest harvests in recent times.  Conscious of the difficulty many UK farmers had with their poor quality grains, Openfield determined, as a policy, to work tremendously hard to market those crops in the most advantageous way possible from a members’ perspective.  This undoubtedly had a negative impact on our profitability but it is entirely consistent with our co-operative principles,” added Mr Dallas.