Farming and finance group overcomes turbulent times to return to profit
H&H Group, the Carlisle-based farming and finance company, is back in the black.
It release annual results for the year to June 30, today, which it said reflect both the stand-out successes and business stresses which came in response to the global pandemic.
Adverse economic conditions with deep slowdowns across all sectors meant that the progress during the first half of the year was compromised by the lockdown context of the last trading quarter.
Turnover was static, at £13.526m, compared with £13.584m the previous year.
But a pre-tax profit of £330,000, compared with last year’s pre-tax loss of £371,000, represented a £701,000 turnaround.
The group said thesse positive signs indicate the hard work of the new chief executive, Richard Rankin, who is delivering a leaner and more future-fit business.
It said this improved performance has only been possible with the dedication and adaptability of the teams across all the businesses which make up the H&H group of companies, including Harrison & Hetherington, the UK’s largest livestock trading company.
The business retains a strong asset base, with net assets rising to £19.4m.
No final dividend has been recommended for 2020 as the board remains intent on ensuring strong financial governance is in place across the group. It said this is especially so in the current economic climate, with the board focused on its responsibility to secure cash flow and build long term value.
Richard Rankin said: “During an unpredictable and fluctuating year, the group has managed to continue to invest and perform relatively strongly.
“Despite hard-earned gains almost being wiped out by one bad debt, indirectly linked to COVID-19 halting the restaurant meat trade, Harrison & Hetherington Farmstock Auctioneers still adapted seamlessly to new restrictions. This meant finishing the year ahead of budget and managing to deliver record trading volumes in Q4.
“There are still plenty of opportunities to develop our existing business, especially online, and the brand has continued to grow and strengthen in terms of sales and its reputation for expertise in the sector, particularly around development and delivery of new technology.
“This is an important asset for us to build on. We are in an ideal strategic position to respond to the needs of both digital and physical marts, and, going forward, our aim is to build on the successes of the online pedigree cattle, sheep and machinery sales that have already taken place.”
He added: “H&H Reeds, our print, signage, graphic design and digital solution provider, completed on the purchase of Dotcom Associates. In what was proving to be a strong year until COVID-19 struck, the company was hitting all budgets.
“The pandemic caused a halt in production because many businesses ceased trading during lockdown, including the tourism and hospitality sector which represents a significant proportion of the H&H Reeds customer base.
“The team is, however, proactive and reacted to the crisis by focusing on delivering COVID-19 signage and support solutions for local businesses and government authorities, and has been able to consolidate with the move onto the Borderway site, which, in itself, brought its own advantages of working more closely with the rest of our group of companies.”
He said: “With online dominating all markets for the foreseeable future, our shift to focus on digital and media services with added capacity in web development and e-commerce is a positive and progressive move.
“In a hugely competitive marketplace, H&H Insurance Brokers has seen a fall in its top line, as cost saving measures have been implemented and future investments have been made.
“This includes the appointment of a commercial director who will be responsible for broadening market opportunities and developing collaborative services and products with cross-selling potential. This is already seeing wins and a return on this investment.
“H&H Land & Estates, our land agency and property business, has been impacted considerably as a result of COVID-19, however, significant losses and jobs were protected through the furlough scheme.
“Working remotely, the teams continued to work and manage all business, including completions. Since reopening, property sales and lettings have picked up, largely driven by both the Stamp Duty holiday and the dramatic increase in demand for farms, land and rural homes following the nationwide experience of lockdown.
“Senior management will now use this opportunity to reflect on the business and draw up a new strategic plan for 2021 and beyond.”
Commenting on the progress since 2019, he said: “Obviously, after the difficult year we had last year, seeing us finish above the line while coping with a global pandemic is more than reassuring.
“I am confident that our pivot towards the future is strengthened by the diversity of our businesses, the agility we’ve developed and will be made possible by the tremendous and proven tenacity of our teams.
“The entire nation has experienced industry upheavals, economic paralysis and emotional turmoil, yet we’ve produced results that stand us in good stead to keep making a profitable turnover and used this opportunity to solidify our foundations to future-proof H&H Group for decades to come.
“We continue to look at opportunities to grow our existing businesses and develop further profitable turnover.
“We also look to take a more active role in the rural economy, utilising our brand, reputation, expertise and heritage in the market to help bring about positive change and support to all the livelihoods dependent upon this sector.”
With its heritage in auctioneering, farming and the rural economy, the H&H Group also has businesses encompassing rural property services, insurance and printing.
The company employs more than 300 members of staff and operates across the North of England and Scotland.
