ForFarmers feed business sees 2021 profits rise

The UK arm of the feed business ForFarmers saw pre-tax profits rise by £865,000 between 2020 and 2021, according to its latest set of financial accounts.

The company, which last month announced plans to merge with the poultry feed business 2Agriculture, saw pre-tax profits increase from £2.4m in 2021 to £3.2m in the year ending 31 December 2021.

Turnover rose from £524m in 2020 to £557m in 2021, but one of its key performance indicators – the gross margin percentage – slightly decreased from 12% in 2020 to 10% in 2021.

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Gross margin percentage looks at the relationship between turnover and the cost of producing the goods sold, to work out how much profit is made for each pound of sales.

In their strategic report, the directors said the national shortage of truck drivers caused by Brexit had led to some logistical challenges, and in order to retain drivers, logistics costs had risen slightly.

Looking forward to the rest of 2022, they said raw material prices were expected to remain high, as were energy, labour and transport costs.

“The company therefore expects continued pressure on margin and costs during 2022 and consequently on underlying Ebitda [earnings before interest, tax, depreciation and amortisation], which has shown a small decline (year-on-year) in the first half of 2022.”

Total feed volumes had fallen by 4% in the first half of 2022, compared with the previous year, following increases in sales prices, driven by rising raw material and supply chain costs, said the report.

The drop in volumes had been most pronounced in the ruminant and poultry sectors, but were in line with the total UK feed market.