Its net profit for the year ended June 30 was $7 million down slightly on the $8.4m of year earlier on turnover of $2.6 billion ($2.7bn).
Chair Rob Hewett says the $7m net profit was effectively a nil result given the co-operative was granted a $7m wage subsidy by the Government to help it through the covid-19 outbreak.
He describes the financial result as “a very good outcome.”
Up to March, when the pandemic struck, business was tracking nicely, but in April revenue fell more than 30% with a marked decline continuing through the final quarter.
“It was one of those years,” Hewett said.
“Even as late as 10 March, when we were at the Wanaka Show, everything looked good but then things changed fast from there,” he said.
Hewett says the wage subsidy certainly helped, but was one of several factors that aided the result.
He says the support of the 72,000 shareholders, landlords, suppliers and the hard work and dedication of staff during the covid-19 lockdown were key.
The rollout of the Click and Collect online store during the lockdown and completion of the Braveheart business transformation programme also assisted.
Chief executive Peter Reidie agreed.
“The covid-19 Click and Collect online store is a true success story for our organisation and is testament to the Farmlands Co-operative spirit,” Reidie said.
In one month, the online store brought in 10 times more revenue than the previous e-commerce site had generated in one year.
“Without the response we initiated, including support of the wage subsidy, rent relief, staff remuneration sacrifice, supplier support and other austerity measures, Farmlands would have incurred a substantial loss,” he said.
“We are grateful for the assistance our stakeholders have provided us.”
Monthly rebates, discounts and loyalty rewards paid out during the year totalled $91.1m compared to $92.8m a year earlier.
Revenue was steady for the year under review at $1.1bn, the same as for the previous year.
Hewett says given the pandemic and the acceptance of the Government wage subsidy, it was not appropriate to make a bonus rebate to members this year.
It did not pay a bonus rebate in the previous 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,” Hewett said.
In the coming year Hewett says attention will be on consolidation, preserving cash, focusing on the short-term, while being flexible and responsive to opportunities.
Agriculture remains a bright light especially dairy with the recent announcement of a higher milk payout, apples – which had plant proprietary protection – and beef.