Farmlands posts 'credible' profit amid 'challenging' year

The company posted a $7 million net profit for the 2019/20 financial year.
The company posted a $7 million net profit for the 2019/20 financial year. Photo credit: Facebook / Farmlands

Despite a challenging year due to COVID-19, Farmlands was able to post a "credible" profit, the co-op announced on Friday.

Chief executive Peter Reidie said the company had made a $7 million net profit for the 2019/20 financial year, which was a "reflection of our co-operative's innovative mindset".

The profit was down from $8.4 million the year before and came on a turnover of $2.6 billion and revenue of $1.1 billion. 

Reidie called the result "credible", with COVID-19 making for a "year of challenges". He said the fact the supplies and services co-op was able to continue trading during the lockdown period - through the hasty construction of a functioning e-commerce platform - was a credit to the "hard work and dedication of the Farmlands team".

In just one month, its click-and-collect store brought in more than 10 times more revenue than the previous e-commerce site had in a year.

Reidie noted that in April the co-op had a "sobering" drop in revenue of more than 30 percent due to the pandemic, despite the core role the agriculture sector played in the economy.

"Although COVID-19 has put us to the test, even endangered us and threatened our financial health, the resilience of our operation and business model, and the commitment of our people to support their shareholders, shone through," he said.

Chairman Rob Hewett said the impact of COVID-19 and the company's acceptance of the Government's wage subsidy meant it would be "inappropriate for the co-operative to return a bonus rebate to members this year".

"While the board knows this is disappointing for shareholders, I am sure we all appreciate the unique nature of the climate we have traded in for the second half of our financial year, the heightened uncertainty this presents to the company and the need accordingly to preserve cash as much as possible until the outlook improves."