Container haulier Macintyre Transport has reported a 26% rise in profits on the back of extending the working life of some of its vehicles.
In the year to 30 April 2013, the Felixstowe based firm’s turnover rose 2.3% from £21.42m to £21.92m, with pre-tax profit rising from £813,000 to just over £1m.
Chairman Harvey Macintyre said the dramatic rise in profit - which compares to a 9% fall the previous year - was largely down to an increasing amount of local, low-mileage work which had effectively allowed the company to run on around 46 fully-depreciated vehicles that might otherwise have been replaced, helping to create ‘hidden value’ on the balance sheet.
“It’s an internal benefit we have created ourselves - it’s not something the market has given us,” he told Motortransport.co.uk. “Strip out that depreciation benefit and the figures aren’t particularly clever.
“The juggling act, going forward, is to ensure we have a sufficiently robust depreciation programme across the whole business to enable us to replace those vehicles when they need to be replaced without suffering too much indigestion,” he added.
Sub-contractors dying out
The acquisition of 10 new vehicles during the year for other work, which the firm had hoped would help it generate an additional £1m in turnover, ended up producing only half that increase, something Macintyre put down to a dwindling source of sub-contractors.
“They’re dying on the vine,” he commented. “It’s very difficult now for the owner-driver to make a living, really. We’re backfilling [with new vehicles] because the subcontractor element is decreasing.”
Continuing pressure on shipping sector rates meant turnover this year was likely to be broadly in line with last year’s, he predicted. Container haulage rates remain a key issue and the trading outlook is still challenging, stressed Macintyre.
“The underlying trading situation is still fairly bleak,” he confirmed. “There hasn't been a great deal of growth really in front-end increase in revenue or in volume.”
