BAKO Western Ltd
Chairman’s Report for the financial year ending 28th February 2017
As I write this report I reflect on a year of growth and change. The failure of BFP in May, closely followed by Brexit in June, brought both opportunities and challenges. However, against this backdrop, I once again find myself in a position to report a satisfactory overall performance for the Society for the year ending 2017.
Following a period of food deflation as stated in my previous report, 2016 brought market increases which have continued into 2017. This, combined with some additional business, delivered an increase in turnover of 7.6% to £33,259,054. Over this same period the volume of goods delivered increased by some 4.8% to over 24,000 tons. As will be noted from the accounts, there was an increase in overheads.
Given our previous record on credit control, it was unfortunate that we found ourselves in the position of having to make an unusually high bad debt provision within the accounts of some £80,000.
BAKO Western remains in a healthy financial position with a strong balance sheet. Members received early settlement discounts of £330,637 as well as rebates totaling £610,081, in line with our target of 2% of the value of individual member’s purchases throughout the year. £306,365 has been retained for future investment in the business, such as the purchase of additional land adjacent to our current site, although completion on this has not yet been achieved.
Our previous investment in solar power continues to generate electricity for our site together with £23,943 of revenue for the business over the last year.
We will continue to review all aspects of the business and will invest in environmental improvements where ethically or commercially viable.
Since the year end in February, we have replaced 8 delivery vehicles. These vehicles have new generation Euro 6 engines with improved emissions. There are positive early indications showing improved efficiencies against the older vehicles that they replaced. Although fuel prices have been relatively stable for the last year or so, given the wider market uncertainty, we are likely to see prices rise as we move forward. Given that our fleet travels some 1.2 million miles per annum, this is an area of focus where we seek a balance between increasing capacity and miles per gallon.
In my last report, I highlighted succession planning for both management and directors. On the impending retirement of Stuart Wilson, the Board appointed Dominic Holland as the new BAKO Western General Manager. Dominic joined the business in November, and assumed full responsibility as GM when Stuart left the business at the end of that month.
Together with his management team, Dominic has reviewed some of the key areas of the business where inefficiencies had recently developed. Steps have been taken to redress imbalances between sales and cost growth as well as credit risk. Proposals have been made to the board in respect of future financial and operational objectives to improve the focus on the core co-operative principles, and deliver advantageous prices to all members.
I am confident that Dominic’s appointment, given his previous record of respected and sound management experience, together with his strong belief in the co-operative ethos, will ensure that the business continues to move forward for the benefit of its purpose.
Following 30 years of direct involvement with BAKO Western, it is extremely poignant for me to see a successful new chapter for the business as I step down from the position of Chairman. Now is the right time for a new Chairman, or indeed Chairwoman, to continue the journey. It has been an honour and privilege to serve in this capacity on your board.
On behalf of all of our members, I conclude this report by sincerely thanking the whole of the BAKO Western team and my fellow directors for their continued commitment, dedication and support.
Bob Burns MBE
28th June 2017