Mole Valley Farmers has posted a group operating loss of £7.6m due to a series of challenges, including surging costs and an IT failure.
The agricultural supply firm has reported its financial results for the year ending September 2023, with sales largely unchanged on the previous year at £610m.
But increased costs through higher interest rates, energy costs and wage inflation were some reasons for the substantial group operating loss.
Other factors included commodity deflation and falling raw material markets, set against a backdrop of farmers battling a reduction in output prices, the business said.
Prolonged wet weather and wider cost of living pressures also significantly impacted Mole Valley's financial performance.
All of this was further exacerbated by the loss of sales revenue associated with an external IT incident in August 2023, Mole Valley reported.
CEO Jack Corder said it was 'disappointing' to report a trading loss: “Last year was one of the most challenging in the 63 year history of Mole Valley Farmers," he added.
"Falling raw material markets impacted profitability as we reduced significant stockholding positions, particularly in our feed and fertiliser business.
"A falling milk price inevitably hit confidence amongst dairy farmers, and the unseasonal weather - with prolonged wet periods in the early spring and then summer - reduced demand across many of our key agricultural product lines.
“To then experience a significant external IT incident last August which targeted our core operating systems, resulting in a period of significant trading disruption, was extremely disappointing."
Given the challenges, Mole Valley would conduct a full operational review of the business to "improve operational efficiency and strengthen core business areas of agriculture and rural retailing".
“Like other businesses our costs also increased and we are mindful of our position as a farmer-owned cooperative about how we manage these, to minimise passing additional costs down to our farmers," Mr Corder said.
“We have taken action across our business to address the various challenges and to remove cost and improve efficiency."
