THE financial position of statuory corporation Falklands Landholdings (FLH) has, “improved markedly,” over the last five years with FLH draft budget for 2016/17 showing a projected net profit of £102,800.
In fact a profit has been shown in all of the last five years confirmed the new General Manager of the statutory corporation, Andy Pollard.
Eight years ago the corporation was on the verge of insolvency and owed local creditors in excess of £70,000. It was granted a £160,000 subsidy by the Falkland Islands Government and re-structuring was undertaken.
When Penguin News asked what had brought about the improvement Mr Pollard said it could not be denied, “that the wool price has had a large effect on FLH profits.”
He said this was attributable to the world price and exchange rates, “the task of selling of the wool and reducing wool micron.”
Asked to what extent sales to the Falkland Islands Meat Company had contributed he said that while FLH had made a policy decision to hold onto some of the wether hoggets and increase its wether flock, “FIMCO still provides a very important 20 per cent of income.”
He added: “Into the future wool prices are forecasted to remain positive, genetic improvements will increase income relevant to the world market price, and meat income will increase as supply increases to FIMCO.”
Mr Pollard emphasised: “Key to this result has been the farm managers and Neil Judd the former General Manager.”
Last week the FLH Draft Budget was presented to ExCo for approval and in the paper Mr Pollard noted that the FLH Board proposed to use some net current assets to continue to examine opportunities to grow and diversify the business over the coming years, “as part of a risk mitigation strategy against falling global wool and meat prices.”
He explained this meant FLH had budgeted to invest £40,000 into an organic sheep skin tannery provided the business case was demonstrated.
“£60,000 has been allocated to horticulture; FLH will work closely with FIDC on this project.” He said they were also keen to enhance any tourism opportunities.
He said the Board believed that the creation of a strong FLH business, one that maintained profitability during periods of low global wool and meat commodity prices, could offer a learning opportunity for other rural businesses in the Falkland Islands. He expanded saying FLH was to trial two energy projects (led by the Rural Development Strategy and FIDC).
“If these projects show merit they can then be promoted not only across FLH but across other farms,” said Mr Pollard.
He also said FLH was running Fitzroy Farm under a holistic rotational grazing system and there had been an investment of £150,000 to date and £150,000 over the next two years, “into artificial insemination, selecting for rams with high eye muscle and fat traits aims to improve wool quality, meat quality and importantly reproductive and mortality rates.”
He viewed it as positive that FLH had budgeted funding for agricultural trainees, “and also to send myself and the farm managers to Australia.
“Whilst the visit to Australia will have objectives relating to enhancing FLH profitability, it is very much an investment into developing the three 'local' farm managers.”
FLH owns North Arm, Goose Green, and Fitzroy farms.