H & H Group Profits

Alan Bowe

Despite uncertainties facing the future of UK agriculture, accounts for the H&H Group, Carlisle, for the year to June 30, 2006 show a profit before tax of £644,000 on a turnover of £7,993,000.

Alan Bowe, who took over as chairman of the Group’s board of directors in February this year, recommends in his statement to the annual meeting on Friday October 27 an increased final dividend of 11.5p, providing for an overall dividend for the year of 16p. The average price of shares sold during the year was £10.42.

He says: “The effect of CAP reforms on those parts of the Group which depend on agriculture for their income continued to be felt in the first six months of the trading year although, whilst volumes of stock traded slightly reduced, the capital values have increased particularly in the latter months.

“Uncertainty of the future, as far as agriculture is concerned, has not assisted in this situation nor has the fact that little government support was received in 2005 with single farm entitlements having only been received in mid 2006 for payment due for the 2005 year. Some stability has returned in agriculture, other than for milk producers where returns in no way reflect the considerable capital and effort involved.”

In his report to shareholders chief executive Trevor Hebdon says: “The Group remains on course in terms of the overall achievement of several of its short term key financial measures and business objectives.

“Over and above our monitoring of the year-on-year trends in turnover, profit before tax and earnings per share, the Group also gives careful consideration to its return on capital employed and return on sales and for the year to June 30 2006, these particular profit measures stood at 14 per cent and 19 per cent respectively.

“With the exception of the Group’s farmstock and auction house operations, our other operating companies have increased their actual turnover and profits compared to the previous year.

He adds: “In addition to the maintenance of - and in many instances, the improvement in- our share of a smaller market, staff within the Group’s farmstock business, Harrison & Hetherington made a significant contribution towards the implementation of a wide ranging profit improvement programme during the winter, in a real endeavour to address the various factors affecting our income streams and our cost lines with many of the latter having witnessed sharp increases as a result of inescapably higher energy related charges.

Looking ahead, there are opportunities to be explored and indeed, the recent resumption of UK beef and live cattle exports has had a most positive effect upon the livestock industry as a whole.”

H&H Bowe, the Group’s chartered surveying and land agency, has seen a year of significant progress at the same time as turning in an acceptable set of results. Year two of a previously agreed business change plan has been successfully completed in terms of the re-organisation of the delivery of a comprehensive range of services to clients and the establishment of a dedicated sales and support team.

Mr Hebdon reports another very good year for the motor vehicle finance company, Borderway Finance while Borderway Insurance Brokers has achieved further enlargement to its already extensive customer base

Estate agency H&H King has produced a first class set of results in terms of the numbers of properties sold, let and managed and the level of profit generated, however, Cumbria Auction Rooms encountered difficult trading conditions with a continuing national decline in furniture.

Borderway Motor Auctions has also delivered another strong trading and financial performance with year-on-year growth in turnover and profit.

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