Scots farm machinery dealer A.M. Phillip Agritech has blamed falling commodity prices and late subsidy payments for a drop in turnover and profits.
Accounts filed with Companies House reveal the firm experienced an 11% drop in turnover in the year ended December 31, 2015. Turnover for the year was £29.389million, from £32.072million previously.
Pre-tax profits at the farm were also down in the year by 74% to £176,833, from £685,917.
In accounts the firm, which was recently appointed Massey Ferguson dealer for Aberdeenshire, Angus and Moray, said: “The very late Cap payments to farmers has contributed to the decrease in turnover in 2015, but since the start of 2016 there has been a significant increase back to more expected levels”.
The company said maintaining current sales levels may be a challenge due to falling commodity prices.
“In participation of a partial lowering in sales in the arable farming areas, the directors are looking to mitigate the cost of sales and the potential growth in sales through the relatively new Perth branch which should add extra revenue,” added the firm.
It said its groundcare division – Gammies Ltd – had continued to grow its sales in the amenity market and this should help protect the overall company turnover.
The accounts also confirmed that the company, which also has depots at Huntly, Conon Bridge, Forfar, Fraserburgh and Glenrothes, received a termination notice in February this year from Case IH putting an end to its franchise agreement with the manufacturer.
The firm said it hoped the new tie-up with Massey Ferguson at its Huntly, Fraserburgh and Forfar branches would “very quickly bring tractor sales up to and hopefully beyond previous levels”.
It said it remained in discussion regarding tractor franchise options for the Conon Bridge, Glenrothes and Perth depots.
Exceptional costs in the year were incurred from the renewal of the company’s computerised management system, the introduction of pension auto enrolment and the payment of average overtime during holidays.
Accounts for the parent company, which also includes lorry and commercial vehicle subsidiary A.M. Phillip Trucktech Limited, reveal a drop in turnover and profits.
Turnover at the group was down 2% to £72.274million and pre-tax profits decreased by 31% to £713,434.
The group said: “Markets nationally continue to be competitive and the effect of pressure on margins has been mitigated by aggressive cost controls. Forecasts for 2016 suggest that group turnover and margins will continue at similar levels as for 2015.”
