Cambridgeshire transport and storage provider Knowles Transport managed to generate an 11.4% pre-tax profit margin in the year to the end of December 2013 despite a sharp drop in turnover, figures logged recently at Companies House have shown.
Turnover for the year fell almost 18% from £33m to £27.1m; pre-tax profit fell over 25%, from £4.2m to £3.1m.
In its financial statement for the year, the company described the results as “pleasing, given the current trading environment”.
Business development director Alex Knowles told Motortransport.co.uk the slide in financial performance was partly down to “considerable” expenditure on new vehicles during the year, following the firm’s recent rebranding, and also the result of the loss of a major manufacturing customer during the year, pressure from major customers on rates, and rising driver costs.
“Costs are going up, rates are going down – there’s a squeeze going on,” he said. “But we might be on the cusp of an upturn right now.”
Most of the pressure came from the firm’s transport operation – warehousing, which accounts for some 60% of turnover, remained stable during the year - said Knowles, and is now the focus of the firm’s growth plan. “Our whole business model is about servicing our warehousing operations through the transport operation,” he said. “That’s not always profitable to do but you’ve got to look at the bigger picture. I always say 90% of your headaches are haulage and they make up 10% of your profit.
“It was very tough for everyone in the industry last year,” Knowles added. “But we have grown this year and we are looking to move forward in both divisions, especially in warehousing.”
The firm’s vehicle renewal programme has seen it replace its 75-strong tractive unit fleet in the last year or so with Euro-5 Scania and Volvo units, as well as taking on around 110 new Lawrence David trailers. The last 20 Volvo FHs (pictured) out of an original order for 45 have just entered service.
