Firm with Inverness mill says future of agricultural sector is hard to call
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A QUIET winter contributed to a drop in turnover and pre-tax profit for an animal food firm.
The Harbro Group – which has a mill in Inverness – admitted the year ended June 30, 2019 was a challenging one for the industry and the business.
The company, which has its headquarters in Turriff, is involved in the manufacture and supply of animal feedstuff and associated agricultural products and services.
A strategic report accompanying the firm’s latest accounts stated: “A reduced gross profit for Harbro was as a result of higher raw material costs during a quiet winter season where it was difficult to recover raw material cost increases.
“Expansion of fixed mill sites and our mobile fleet to meet expansion plans also reduced gross profit until they are fully utilised.
“During the year, the Harbro Group invested in increased employee numbers, development and training as part of restructuring and growth plans for the home market and abroad. The full benefits of this increase in employee costs will land in future increased revenue for key areas of growth.
“The trend across the animal feed industry in the period was a reduction in feed volumes. This reduction largely being due to spend patterns as a result of increased availability of own forage stocks as well as Brexit uncertainty.
“It is pleasing to see, however, that the business has undergone further market penetration across the UK in some species groups.”
Turnover fell from £119,074,000 in 2018 to £118,568,000 last year.
For the same period, pre-tax profit dropped from £3,601,000 to £1,692,000.
The report continued: “The group continues to invest in improving processes in an effort to allow the business to become leaner, more efficient and allow better control of overhead costs.”
The firm’s production facilities and retail division performed well during the year.
The average number of employees increased from 479 in 2018 to 523 last year, while staff costs increased from £16,240,000 to £17,152,000.
The reported added: “As always, the outlook for agriculture is difficult to predict. As a business we continue to see lots of opportunities. The board of directors has defined strategies across all revenue streams with a clear direction to focusing on core activities.
”Our employees are central to the success of the group. The company continues to invest in training and support to all employees to ensure they have the skills required to perform their duties and to provide an excellent service to our customers.”
