William Sinclair managing director Bernard Burns has said growing media sales to the professional market might fall 20 per cent in 2013 if retailers order fewer plants, but sales to retailers could be up 10-20 per cent. He added that the value of compost sales to the professional market might be five to 10 per cent down, mitigated by price rises.
His comments follow news that the firm has recorded a full-year pre-tax loss of £0.4m, after a profit of £3.18m in 2011, blaming wet weather for its "disappointing" performance.
Its total sales of growing media to the retail market fell by 19 per cent in the year to July 2012, while sales to professional growers "held up well". Overall, horticulture sales fell by 14 per cent to £48.2m in the year to 30 September.
Burns, to be replaced by Peter Rush as managing director in March, said the grower market in 2013 was likely to struggle but retail sales would improve. He added: "The weather affects the professional market the year after it happens because retailers order plants blind. So if a grower and a retailer take a bath in a wet year, the following year the retailers react and order less. It doesn't make sense but that's what happens. Also, in January 2012 it was 1.12 euros to the pound and now it's 1.23, so Holland is much more competitive this year and we're expecting a fairly substantial reduction in production here. But retail sales will be much better than in 2012, given better weather."
He said compost prices to growers were up 20 per cent, and up 10 per cent to retailers. He added that growers had ordered early in the face of potential shortages, with 50 per cent of expected turnover from them already in, compared with 10 per cent by January 2012.
William Sinclair is importing Canadian peat at two to three times the cost of UK peat to beat a 50-plus per cent shortfall in 2012 harvests caused by wet weather.
Burns said the delay in the Government's response to the Growing Media Task Force report showed there was a problem, which he suggested was about how to "distance themselves" from "counter-productive targets" to stop peat use. He said only European legislation could stop peat use and that was not forthcoming because "they don't have our problem with peat on the Continent".
Burns will work part-time at William Sinclair on negotiating Bolton Fell site compensation from the state.
£0.4m - loss in year to 30 September