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Ecological Land Cooperative

Financial performance

ELC Investor Members have received interest payments in the last five years between 2015 and 2019 (inclusive). Interest has been paid at 3% in these years, although many investors have chosen to be paid a lower rate of interest.

The Business Case

In 2017 ELC updated their plans to produce 20 small farms for sale, rent to buy or rental by 2020. Following a successful share offer in 2017, ELC has put in place much of the infrastructure needed to achieve this target. They now have five sites in development with seven small farms already developed and another eight to become available in the near future. ELC is actively searching for suitable land to move them nearer to achieving this target and have social investment finance in place to make the land purchases.

ELC have revised their deadlines as they encountered time delays when navigating the planning environment. This was particularly true for their second site which was held in the system for 18 months before a positive decision was achieved. Now that ELC have three positive planning decisions including a permanent permission, they are finding it easier to talk to planners. This is paying off in the form of shorter turnaround times for planning applications.

Revenue model

The Ecological Land Cooperative generates income through the sale or rental of the small farms, of which there are three at each site. There are three models of small farm ownership; initial premium; 25 year investment scheme or ongoing monthly charge:

  • Initial premium - the cost of a small farm leasehold is £110,000
  • 25 year investment scheme - the steward pays a much reduced premium of £22,000, then 5 year monthly charge of £430 followed by 20 years monthly charge of £625
  • Ongoing monthly charge - the steward pays £400 per month

Future Work

ELC is looking to raise investment in 2020, in line with the projections in the Financial Information Supplement to their 2020 share offer document, to continue their work to develop agricultural land into small farm clusters.

They will also continue to seek grant funding to keep the cost of future small farms below the average of £110,000 and to fund additional infrastructure for the sites, such as wind turbines and community buildings. In 2019, in line with projections, ELC were able to raise £25,000 in grants towards the cost of infrastructure projects 

ELC is well on its way to creating 20 small farms by 2021. They hope that the learning achieved will greatly reduce the time taken to develop new sites, although experience shows that each site will bring new challenges.

Financial Progess

The financial projections for the Cooperative are based on delivering one site per year and using the site costs and overheads given. In 2019 ELC were able to sell 2 small farm leases and they showed a profit as a result of this and good fundraising results for the year.

Their forecasts show that as the number of small farms grows, and with it rent payments from both rentals and rent-to-buys, annual profits grow. After 10 years, ELC forecast that overheads and member interest will be covered by income from rent and rent-to-buy land arrangements.

Cash Flow

A summary of the cooperative's projected cash flow for 2020-2023 is shown in the table below:



  • Forward-looking statements are merely unaudited projections based on a number of assumptions and should not be relied upon as indicators of future performance. There is no guarantee these projections will be achieved.

Key assumptions

When calculating their financial projections ELC have made the following assumptions:

  • Land is purchased at an average of £8,000 per acre.
  • Each smallholding has on average six acres of land.
  • ELC will be able to raise the share capital and loans that they need between now and 2023.
  • The cost of borrowing will average 2.5%.
  • ELC is offering Investor Members up to 3% in interest on share capital annually. Some investors choose to waive their return to further support our work.
  • In their business model ELC have allowed 24 months to go from the point of identifying a site to selling the smallholdings although they hope this will reduce over time.
  • At an average sales price of £110,000 per smallholding, after overheads and interest on shares and loans, the profit margin on a site of three smallholdings is 24% (although this margin is only achieved at the end of the entire 27 year payment lifetime of a site).
  • At, on average, £400 per month, rising annually with inflation, the first year’s rent yield from rental properties represents 5% of the total costs. Both overhead and per-site costs are fully recouped after 25 years.

ELC finances are broadly split into two categories: overheads, and per-site costs which are accounted for over the full payment lifetime of a typical site. More detail is available in ELC's 2020-2023 Financial Information Supplement

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