Expect Distribution has blamed a fall in profit on its loss-making two-man delivery service, which ceased operating in May last year, but said that new deals in its contract logistics business will get it back on track.
The company saw its pre-tax profit fall by 17.5% to £548,152 for the year ended 30 November 2015 (2014: £664,812).
The directors’ strategic report said the fall was, in part, due to the two-man delivery service, “which continued to incur significant losses prior to its closure six months into the trading year”.
Expect Distribution MD Neil Rushworth told Motortransport.co.uk that the driver shortage had also contributed to its drop in profit.
“The cost of agency workers was a lot higher than budgeted, which impacted the bottom line,” he explained.
However, Rushworth said that after an “eventful” 2015, he believes the company could hit its operating profit target of just under £1m this year.
He said: “We started this financial year a lot more settled. The figures so far are well to budget, I think we’re seeing the effects of new management coming in and we’re seeing a growth in the contract logistics and warehousing.”
While the company plans to grow its contract logistics operation, Rushworth said that he thinks its maximised its margins on its Palletline work, of which it’s a founding member.
“We’re not looking to take on more with Palletline. We have no plans to reduce the work we’re currently doing, but the contract logistics is where we want to grow that margin.”
The company’s turnover rose by 2% from £21.2m in 2014 to £21.7m in 2015, which Rushworth said was in-line with expectations.
He added: “We’ve got some good things in the pipeline and some new contracts coming. There’s a lot of good things happening in the business, but last year wasn’t quite as good as we’d expected or budgeted for.”
