Boughey Distribution’s profit took a hit after it ran out of warehousing space and was forced to outsource some of its storage operation last summer.
While the food division of the NWF Group’s turnover increased 2.7% to £19.3m for the half year ended 30 November 2015 (2014: £18.8m), the extra costs its storage issue incurred “more than offset” this rise.
The additional costs came from the transportation required to move the overflow consignments to and from alternative storage locations.
In light of this, the company said the 6% drop in headline operating profit for the period to £1.4m was “in line with expectations”.
Boughey’s Wardle site has capacity for 100,000 pallets, and is operating at an average capacity of 99%.
A spokesman for the firm said Boughey was “aware there are restrictions on its operation” and was looking for solutions.
While a “greenfield build on a new warehouse is a bit expensive,” he said, “they are introducing the use of smaller pygmy pallets so they can fit more into the Wardle facility.”
The spokesman added that Boughey’s Palletline and packaging work added value to the operation to increase the company’s margins.
