Frontier Agriculture, the UK’s leading crop production and grain marketing business, has published its Annual Reports and Accounts for the year ending 30 June 2023.
During the period, Frontier’s earnings before interest and taxation grew to £51.2 million and profit on ordinary activities after taxation also increased to £31.9 million. This record performance, despite challenging market conditions, demonstrates Frontier’s strategic resilience and the robustness of its uniquely balanced inputs-outputs business model.
In 2023, 41% of earnings were realised from Frontier’s ‘outputs’ business (grain trading and handling operations) and 55% of earnings were accounted for from its crop ‘inputs’ business (the supply of seeds, biostimulants and crop protection products, as well as agronomy services).
During the period, grain markets experienced high volatility and unpredictable trade flows due to the ongoing conflict in Ukraine, resulting in an exceptional and rapid rise in grain prices. This market dynamic created an opportunity for Frontier to hedge new crop grain contracts for customers at both ends of the supply chain, with healthy crop gross margins also enabling UK farmers to buy higher volumes of crop protection products during the period.
Frontier remains a well-invested business with cumulative approved capital investment exceeding £109 million since its inception in 2005. In 2023, Frontier approved £14.7 million (2022: £13.0 million) for capital expenditure in its core business, including assets in grain handling, crop processing, crop protection warehousing and precision systems, complementing ongoing investment in operational digitisation and employee learning and development opportunities.
Frontier also has a strong track record of investment in highly focused start-up subsidiaries and joint venture enterprises. Recent examples include farm banking services, via Oxbury Bank, and digital farm-gate data analytics, via Yagro, and these have performed in line with budget. Since the year end, Frontier announced the start of successful production from its joint venture business, Navara – Europe’s largest, state-of-the-art, oat processing mill.
Looking ahead, market conditions remain challenging. Ongoing wet weather and instances of severe flooding have impacted UK crops and grain markets have continued to remain turbulent, with added volatility created by the impact on logistics from the war in Gaza and attacks on container movements in the Red Sea. Frontier is determined to support its customers – wherever they sit in the supply chain – to face these challenges and continues to develop its services and expertise.
At the farm inputs level, Frontier’s experts in agronomy, crop nutrition and regenerative agriculture are developing sustainable crop production solutions that can help mitigate climate-related risks for UK farmers, while responding to increasing demand from grain processors – and the UK public – for more sustainably sourced food and agri-products. On the grain trading side, Frontier remains confident in its ability to keep the UK grain supply chain financed and liquid through its hedging, trading and risk management services. These are facilitated by its strong balance sheet and good relationships with its financial partners to secure access to working capital.
Despite ongoing market challenges, Frontier continues to demonstrate resilience across all its business activities and is well-positioned to realise its vision to be the first-choice partner for crop production and grain marketing for UK farmers, and the first-choice employer in UK agriculture.
Commenting on these results, Mark Aitchison, group managing director, states: “We are a high-performing business that remains focused on continuous improvement and strategic investment in relevant capabilities and services that add value to our customers across our supply chain.
“Our ability to deliver another set of outstanding results in such challenging conditions is a testament to this strategic focus, our balanced business model and our distinctive culture and values. These are advocated by our dedicated employees who navigate the complexity and challenges in our operating environment with agility, flexibility and resilience.
“To match our growth aspirations, we continue to invest in and evolve our senior leadership team and I am delighted to announce that Diana Overton, group finance director during the period under review, has been appointed as the Frontier group deputy managing director. Diana has been in the business for 12 years and has served as an executive director on the Frontier main board since 2017.”
Diana Overton, deputy group managing director, comments: “We are delighted to publish our first full annual report and accounts which provides a holistic overview of our exciting, growing business.
“As well as demonstrating our ‘blue-chip’ financial credibility – a cornerstone of our financial performance to date – we share examples of our strengthening commitment to sustainability and environmental, social and governance (ESG) considerations. These are increasingly important to our supply chain customers as well as our employees and farming communities.
“I am looking forward to taking up my new role as Frontier group deputy managing director and I congratulate James Cameron on his promotion to group finance director, as well as to the senior leadership team and main board of Frontier.”
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