ANM Group Ltd., Scotland’s leading farmer-owned co-operative, says it remains in a strong financial position, despite announcing an overall trading loss of £2.517 million for the year ending December 31 2011, compared with an overall trading profit of £1.027 million in 2010.
ANM has a balance sheet worth £19.293 million, which does not include property uplifts that will be shown in the 2012 figures. Group throughput for 2011 increased from £224.137 million to £254.902 million while turnover increased from £103.335 million to £114.217 million.
The loss relates mainly to the Group’s Meat Division, where a lack of consumer confidence and increased costs in raw materials has had a “devastating” effect on trading conditions.
The Group’s core operation, Aberdeen & Northern Marts, saw its profits increase to £1.223 million in 2011, up from £879,000 in 2010. A one-off accounting adjustment of £454,000 brings that total to £1.677 million. It was also helped by a substantial contribution from its non-agricultural trading arm, Thainstone Specialist Auctions, in particular from TSA selling the assets from the administration of the Les Taylor Group, which was the largest value single day sale ever conducted by ANM.
Pat Machray O.B.E., who was appointed Chief Executive in February this year, said despite the trading loss, the overall position of the Group remains strong, however extensive changes will be made and reviews are already underway to return the business to stability.
He has launched a major evaluation of the meat division and announced a number of new initiatives for members as part of the changes he is bringing in across the Group.
Higher interest rates are being introduced for the Members’ Loan Scheme from April 4. The scheme is regarded as an important contribution from members towards the funding of the Group and those with a minimum of 40,000-shares will qualify for new loan rates for six and 12-month notice periods, with rates at 4% and 4.5% respectively.
Regional Advisory Groups are also being set-up for members to meet Mr Machray and his executive team and raise any issues direct with them. There will be up to five groups with up to six members in each, including a young farmer or new entrant. They will meet locally with the ANM team twice a year along with an annual forum together.
Mr Machray said: “The results are hugely disappointing for the membership and for the great tradition of the ANM Group. I am not underestimating the challenges ahead of me as I realise there are no quick fixes and it will take time to put the Group back on an even keel.”
ANM also announced changes to the stock in agreement scheme it operates, which loans money to farmers to buy store cattle. To help the Group’s cash management, the amount of funds available will be reduced and all future stock in agreements will require a 10% deposit. Current agreements are not affected and the Group said it hoped the measure would be a short term arrangement.