Aberdeenshire livestock feed firm Harbro tackles double whammy of Covid and Brexit: headcount falls

Harbro, the Aberdeenshire-based livestock feed business, insisted there was a “bright future” for UK agriculture after tackling the double whammy of Covid and Brexit during the past year.

Managing director Chris Baxter described 2020 as a “difficult and challenging year for everyone” as the firm released its latest financial results and revealed that about 40 jobs had gone.

He pointed to major efficiencies across the operational side of the business following capital investment and the implementation of new operational systems to boost efficiency.

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For the financial year to the end of June 2020, turnover fell by £3.4m to £115.2 million. Despite this, pre-tax profit lifted to just shy of £3m, as a result of improved market share, new product offerings and overhead cost savings.

Harbro Country Store in Dalkeith. Picture: Phil Wilkinson

Baxter said: “2020 was a difficult and challenging year for everyone and this has been no different for agriculture, with Covid and Brexit putting pressure on and adding challenges to both operations and service levels.

“However, we can at least now look forward to Covid restrictions easing and I would like to thank our staff and customers for their support through this challenging period.

“We continue to see growth in the business and are very encouraged with current year results, driven by increased market share and product development. Our retail stores are performing well in a tough space.”

He added: “Our retail store offering has been a great success and the recent expansion of central Scotland shops is going very well. In the next couple of months our Lochgilphead store will be moving to a new site, which will allow us to extend our offering in this area.

“Following a fire in 2019, our reinstated Birkhill Mill in Lanarkshire is now the most modern feed mill in Scotland, delivering improved quality and efficiency.”

The company announced that underlying earnings before interest, taxes, depreciation and amortisation (Ebitda) increased by £1.2m to £6.9m in the year to June. Capital expenditure investment was £1m lower at £2.3m. During the period, employee numbers dropped, from 523 to 483.

Over the 12 months, group net debt reduced by £5.5m to £10.8m.

Baxter added: “There is a bright future for UK agriculture and Harbro is in a great place with new products and nutritional tools to help meet the ever-growing demand around supporting sustainable and environmentally friendly farming.

“We are also committed to reducing our own carbon footprint throughout the business and have recently launched an environmental strategy and a number of internal projects to make the group lead the way in reducing carbon footprint internally, as well as supporting customers to introduce their own environmental initiatives on-farm.”

Chief financial officer Ross Baxter said: “We have had a clear strategy over the last few years of focusing on working capital, cash flow and reducing our net borrowings. We have introduced tighter cost control, and capital investment decision-making made with good discipline around the return on investment. The consequence has been a reduction in both our working capital facilities and term debt.

“It is pleasing to see our focus on cost control and continuous improvement begin to pay dividends in both profitability and cash terms.”

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