ForFarmers wants to be able to pay out more dividend to its shareholders in the coming years. The feed company is moving away from the maximum of 50% of the underlying profit that can flow back to investors as dividend, and will instead maintain a range of 40 to 60% of the underlying profit. This profit should also increase, because the Gelderland company wants to reduce costs by €10 million in five years time.
That is stated in a strategy update from ForFarmers that was presented on Tuesday. In it, the feed company also expresses the ambition to enter a number of new markets. The Lochem-based company is now active in five European countries. There should be seven by 2025. In doing so, ForFarmers aims for a “more balanced distribution” between the more mature home markets and new growth regions.
With annual sales of 10.1 million tonnes of feed, ForFarmers claims to be the market leader in Europe. It is active in the Netherlands, Germany, Belgium, Poland and the United Kingdom. Two more countries are therefore to be added, it says.
Through growth under its own steam and through acquisitions, ForFarmers aims to achieve an operating result of EUR 125 million to EUR 135 million per annum by 2025. In the first half of this year the operating result was EUR 48.2 million. According to the company, profit margins should also improve in the period. In the “challenging home markets” this should increase between 0 and 3 percent annually.
ForFarmers notes that in European home markets, with the exception of Poland, there is increasing pressure on the agricultural sector. Livestock farmers are increasingly faced with environmental measures to reduce emissions of phosphate and ammonia from animals, among other things. As a result, growth prospects for the agricultural sector in north-western Europe are very limited.