Farm management company Velcourt has reported a third consecutive year of trading losses, as continued market pressure took its toll.
Pointing to the “worst harvest for 25 years”, low prices in a well-supplied global grain market, and “embedded inflation” in production costs, the company faced a significant squeeze on margins.
This was not helped by the premature withdrawal of the Basic Payment Scheme in England, and the overnight closure of the Sustainable Farming Incentive.
See also: Velcourt machinery up for auction after major restructure
So, while turnover was broadly stable in the year to 30 September 2025 at £22.7m, the company sustained a £1.32m loss, coming on top of equivalent losses of £1.03m in 2024 and £1.24m in 2023.
The last time Velcourt turned a trading profit, of £2.43m, was in in 2022.
Restructure
While some of the impact was mitigated by higher levels of strategic forward selling and a growth in “fixed fee” income, the company has also embarked on a significant restructure.
In the financial period covered, it served notice to exit or renegotiate contracts relating to a quarter of its farmed area.
“The conclusion of that process will result in circa 8,000ha of funded farming activity ceasing on those arrangements assessed to be highest risk at the end of harvest 2026,” said group finance director Jason Scott, writing in the annual accounts.
Simultaneously, Velcourt has been successful in winning new contracts for about 4,600ha on a fee basis, with no risk capital deployed.
Future prospects
Looking ahead, the firm says its crops were in good condition heading into harvest 2026, and it has already sold 33% in advance at “in line with budget” prices.
The firm is also in the process of disposing of a major part of its arable machinery portfolio, having recently sold a quantity of cultivation equipment, with a second sale of harvest and application machinery scheduled for September.
Despite the financial pressures, the company still has net assets of £10.7m and the auditors say they have not identified any uncertainties that cast any doubt on the company’s ability to continue as a going concern for at least the next 12 months.
The wage bill for Velcourt’s 133 farming staff came to £6.95m in 2025, and the highest paid director received just over £185,000.