Co-op happy with growth
A strong retail performance has helped Ashburton farmer co-operative ATS and its subsidiaries boost turnover by 4.5 per cent to $232 million during the 2012-13 season.
ATS Group chief executive Neal Shaw said he was heartened by the growth in a competitive rural retail environment and challenging commodity markets for farmers.
"It is indicative of the solid and growing support we have from our members.
"We have enjoyed not only a slight increase in shareholder numbers [but] also an increase in average spend per shareholder member, which is encouraging."
Average shareholder spending rose $2000 to $85,000, and shareholder numbers rose to 2698.
Shaw said this reflected the robustness of many farming businesses in Canterbury from reliable irrigation and the ability of dryland operations to bounce back after a challenging summer.
He said the fortunes of dairy farmers facing income pressure last season had changed, as they looked forward to one of the best milksolids payments on record for the 2013-14 season.
An operating surplus of $5.4m was reported, well up on last year's $2.05m.
Much of this came from ATS's joint venture with Ravensdown to launch the Ruralco charge card for shareholders of both co-operatives. This resulted in a one-off gain for ATS, as its card and Mobil-Allied fuel business was sold to the 50 per cent- owned Ruralco business.
Shaw said the gain was a non- cash transaction and deferred over five years.
In contrast to last year, a rebate will not be paid to shareholders, to build up reserves to repair earthquake damage to the co-operative's buildings, including its Ashburton headquarters.
Shaw said options such as rebuilding and strengthening the headquarters or moving to a new development were being examined.
Since the rollout of the card business in July, ATS has been working on establishing it in Otago, Southland, Nelson and Marlborough.
Shaw said Ruralco would start to roll out the card service next year in the rest of the South Island, followed by the North Island, to 20,000 potential card holders nationally.
He said the Ruralco business ensured ATS could continue to focus on its traditional businesses, including rural retail, electricity, fertiliser and seed sales in Canterbury, and some fuel business that was not part of the Ruralco offer.
ATS would have faced the risk of medium-term irrelevance in the farm supplies market without investing in the national card business, he said.