‘Farm Finance’ Workshops – West Falkland
On behalf of the FIDC Team, let me renew our thanks to all who attended our ‘Farm Finance’ workshop last week.
We at FIDC are building a programme of assistance to help improve farm business performance. This session was intended to be a timely intervention - while wool prices are good - to ensure farmer owners/managers have a grip of all available controls (agricultural, genetic, financial, marketing, and so on) such that if a downturn comes, they have resilience and a buffer against the lower incomes. This means getting farm performance up to the max, and part of this is being able to run the finances, not to let them run you.
The fairly basic session we’ve just carried out aimed to meet a range of learner needs, with the goal of making sure that financial information is gathered, interpreted, and used to keep the farm in tip-top condition; going from farm, to farm business.
With the arrival of the Wool Innovation Director, Ed Dugan, we took this opportunity to see how farm ‘benchmarking’ could develop – taking farmers’ better understanding and more rigorous use of their financial data as just one way to make informed farming decisions.
We set out to show during the session last week;
· That a Business Plan is always needed. Not just to gain funds to buy the farm, but as a way to set a goal, and monitor progress along the way. We stressed that it’s not just a ‘do once and forget’ exercise, but is something you return to, revise, and adapt. We were struck by the fact that few farm enterprises run to plans.
· That financial information is not only a requirement for others – tax, statutory obligations, lenders – but is a tool for you as business owners/managers. We outlined the differences in financial accounting and management accounting (this latter being the one we value most, in decision making). Also, we pointed to the need to forecast as well as look back at how things went. We noted that not many businesses did forecasts, in the belief that “what happens, happens” – weather, world prices, equipment failure, and so on.
· We set out the ‘three pillars’ of financial management – cashflow; profit & loss; and balance sheet – explaining to groups (that readily grasped the concepts) that cashflow shows how money comes and goes over time, that profit and loss shows just what you’d expect it to at a year end, and that if you want to see if there is any value building up in an enterprise you look to the balance sheet.
· We demonstrated how a few small changes in a cashflow management (e.g. credit controls) can aid the business and showed you that you might need less capital to start something, or need to borrow less once going. Also, we looked at how changes to planned sales volumes, costs, overheads, and prices can secure better net margin and net profits.
· In looking at assets, liabilities and equity on the balance sheet, we showed how you might build long-term value in a business – useful if you want to sell it, and essential to understand if you are comparing farm enterprises for sale. We noted great interest in the value of brands.
All of this pointed out that you can actively manage finances and make decisions - with more and better data; for example, if trying to decide should you diversify, or add a new farm enterprise, or sell now, or buy later?
We hope this short course, and the workbook, and any further help asked of us, will give participants confidence in making these farm enterprise choices. So, how does this square with farm benchmarking and the delivery of the different actions agreed within the Wool Innovation Programme?
You need to know your costs of production, and in competitive and volatile markets to drive these down. Certain things cost the same across the Islands and some differ when you or a neighbour are buying (or selling…). Same when comparing our wool production worldwide; to be competitive we need to know how we stand in relation to others.
While short, Ed Dugan considers this trip as valuable in the better understanding of the West Falkland climate and environment, the wool production enterprises and the issues around the logistics and movement of goods and stock.
The need for robust forward preparation of resources and staff, combined with a good fall back plan may remain part of West Falkland farm gate to wool store movements. With wools return to that of a valuable product, the rewards for managing the timing of the marketing should be seen as a key part of any on-farm business plan.
No doubt Ed will be back to you in the coming weeks to keep you informed on the delivery of his Programme.
Position on the Falkland Islands Development Corporation Board
The appointment of Mr Andrew Newman as Vice Chair has created an opportunity for a representative of the business community to join the FIDC Board as a Co-opted Member.
This is an exciting time to become more involved with the Islands’ economy, informing governance decisions while delivering on the Corporation’s business plan, and subsequent programs and initiatives.
This is a one-year term in the first instance with the opportunity to extend.
If you are interested in finding out more about this opportunity, please contact Sue Faria
Interested parties are invited to submit expressions of interest in writing setting out their relevant knowledge, skills and experience by no later than
28 th May 2018.
FIDC Board Secretary
Falkland Islands Development Corporation
Changing places and new faces at the Development Corporation.
New appointments for FIDC, at the Board, Senior Management and support levels.
Andrew Newman - Vice Chair of the Falkland Islands Development Corporation Board
Andrew Newman takes over from Steve Dent in the position of Vice Chair of the Falkland Islands Development Corporation Board. Mr Newman has been on the FIDC Board since 2015, and is a director of Argos Ltd and Argos Developments, where he specialises in vessel management and logistics, oil and gas support, and property development. He had previously worked for over 23 years with FIG, lastly as Director of Civil Aviation and Head of Regulatory Services.
Welcoming Mr Newman into his new role and thanking Steve Dent for nearly three years’ service, the FIDC Chair Hamish Wylie comments;
“We are delighted to have Andrew step up to Vice Chair, and I will welcome his knowledge and skills helping steer the Corporation. In his time in the role Steve Dent has been a great advocate for private enterprise in the Islands and he has brought great enthusiasm and ability to our work. As ever, I’m pleased that we have such a strong and committed board in place”.
Gordon Ackroyd on the recent RDS public consultations
FIDC has also appointed a new Strategic Projects Manager. Gordon Ackroyd, who has been a Business Development Officer at the Corporation since 2016, moves up into the post following a competitive local recruitment process.
Mr Ackroyd has a first-class degree in Politics & International Relations, where he focussed on aspects of Falkland’s politics and economics, and on international tourism. He has a vast commercial experience, having held the first of his seven corporate and charitable board director positions in a TV facilities company and in a subsequent 30-year career has been creative head of a UK advertising and PR agency and managed a wealth of consultancy projects covering marine contracting, fair-trade food brands, catering, education and training businesses, plus work in the promotion of ‘green’ enterprise.
Martin Slater, MD of the Development Corporation says;
"In this new post, Gordon will be taking forward the strategic sectorial work of the Corporation, and in particular assisting the private sector to successfully secure and maximise new and existing business opportunities. I have no doubt his extensive skills and experience will help deliver the aims and aspirations set out in FIDC’s Business Plan and in turn add value across all sectors of the economy."
Stacey Steen joins the team as Administrative Assistant
In addition, Stacey Steen will take up the new post of Administrative Assistant. In very much a ‘front-line’ position, Stacey will look after the admin needs of the Corporation and its range of business tenants and visitors at Shackleton House, and will help manage the smooth servicing of clients’ needs for business advice, enterprise training and the range of grants, loans and project funds. The FIDC team welcomes her starting later this month.
Director of Wool Innovation - Ed Dugan - Joins the FIDC Team
The Falkland Island’s first ever Director of Wool Innovation is getting down to work, in a new post supported by FIDC and steered by the specially-created Wool Innovation Group.
Mr Ed Dugan is a fifth-generation sheep and wool farmer. Now arrived from Australia - where worked with the World Federation of Merino Breeders, the NSW Business Chamber, and most recently as CEO of the Australian Association of Stud Merino Breeders - Mr Dugan is, says FIDC’s MD Martin Slater, “ very well equipped to bring innovation and resilience to our industry ”.
The appointment stems from FIDC’s Innovation Programme, and the well-received ‘value-adding’ consultant’s report last year, that looked at the whole scope of the Falkland’s wool sector. He will be working to the direction of the Development Corporation and under the wise counsel of the Wool Innovation Group – made up of key stakeholders in this vital industry.
His two-year programme is expected to increase the financial returns to forward-looking growers, and to secure a future for the Island’s industry in what can be a volatile international market. In Ed Dugan’s view from his first week here; “
there’s a great product and progressive, hard-working farmers to work with.”
Although familiar with the Falkland Islands wool type before his arrival, he has still been surprised and delighted by the characteristics of the local product;
Having traded and processed wools from around the world, test results speak for themselves. But, the handle of the FI wools that I have seen is quite special and a trait which will be a focus in my discussions with international wool merchants and textile mills, keen to source new origins of supply” enthuses Ed.
With wool prices on a high, this programme is designed to extract the maximum farm-gate returns now and in the near term - but also with a focus on continuous improvement to see the industry through harder times.
Getting the process up and running, Mr Dugan will be working on negotiating competitive freight arrangements. Attention will then be on the warehouse activities, followed by upgrade for wool preparation, classing and description to match international standards.
Standing behind this will be work to establish benchmarking: “
The return to better greasy wool prices allows the grower to focus on using management tools applicable to that farm enterprise in a cost effective manner. Growers can invest the better returns by using the combination of visual and objective sheep testing and field trials” he explains.
This approach, says Mr Dugan, allows the grower to not only reflect on the results, but to fine-tune breeding plans to which meat qualities and/or wool characteristics they consider suitable for the level of management and type of farming operation they wish to run.
With this benchmarking as the focus, and a busy time ahead, Mr Dugan will be at the National Stud Flock Ram sale this March, and is ready to tell the world all the good news about the Falkland Islands sheep and wool industry.
Kevin and Lisa at Harps farm sent in some fantastic pictures of their new turbine that was installed last week.
Kevin had the following to say:
“Many thanks for all FIDC’s help with the project over the past few months, the turbine would not have been a realistic investment without the help we received along the way.”