The company said its biggest challenge had been the wet autumn, with a 25% reduction in the acreage of winter-drilled crops.
Adjacent investments have provided a boost for Frontier in the year ended June 2024, with lower winter wheat plantings impacting spending on spring crop protection and fertiliser.
Group operating profits dropped by 30% to £37 million.
The company said its biggest challenge had been the wet autumn, with a 25% reduction in the acreage of winter-drilled crops which impacted the crop inputs side of the business.
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It also highlighted inflation, which remained ‘higher and lasted longer than expected', alongside a lack of base interest rate reductions, meaning financing costs were higher than anticipated, as well as political uncertainty.
Arable
Profit before tax remained consistent, at £40m compared to £40.2m a year earlier on group revenues of £1.8 billion, down from £2.3bn.
However, Frontier highlighted its investments in a number of adjacency businesses, including start-ups associated with its supply chains and nationwide farm-gate activities.
Principal investments in this category have been in agricultural banking through Oxbury, oat milling with Navara and data analytics via YAGRO, alongside a portfolio providing valuable services to the sector while building robustness in future earnings during periods of trading volatility.
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Its investment in agricultural banking fully offset the downside impact in the group operating profit. Frontier said this had allowed the business to achieve an overall profit before tax performance in line with the previous financial year.
Group senior executive director Mark Aitchison said: "Like many of our farmer customers, diversifying income streams in parallel with volatile trading activities provides some security of earnings.
"Our adjacency investments are all in areas we believe can benefit our customers, providing for us both the opportunity to bring more certainty.
"Robust earnings enable us to invest in the core business at a consistent rate during periods of downturn and ensures we continue to develop products and services for the future."
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Managing director Diana Overton, said its investment in Oxbury had proved ‘very successful, with the bank able to provide independent support to the UK farming sector.
Openfield
It comes as Openfield reported a drop in profit before tax for the year to June 30, down from £2.3m in 2023 to £0.8m in 2024, highlighting poor planting conditions in Autumn 2023 and a large carry forward of crops into 2024.
Operating costs reduced by 18.5% to £14.1, while group revenues were down by 31% to £555m.
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