Premier Logistics MD Lee Christopher has predicted the haulier will bounce back after two disastrous acquisitions and the end of its Pall-Ex work led to a £1m loss that triggered an emergency loan from its new network.
The Leicestershire firm’s recently published accounts for the 16 months to 30 April 2017 reveal a turnover of £24.9m, compared with £18.9m in the year to 31 December 2016.
A pre-tax loss of £1.2m (2015: £181,041 profit in year to 31 December) was mainly due to the poor performance of CJ Express in Hull and DA Clayton in Bicester, which were both bought in 2015.
DA Clayton was closed in December 2016, while CJ Express traded until last November. It was placed into voluntary liquidation after a loss of £386,918 in the reporting period.
On the closure of the Hull depot the fleet was transferred to an existing Huddersfield depot, ensuring key relationships were maintained. It continues under the banner of MWC Logistics.
Premier added in its accounts that the termination of its contract with pallet network Pall-Ex in 2016 cost it dearly. “The group suffered a loss of a few customers, which contributed to approximately £2.4m in annual turnover.”
Premier calculated this led to a profit loss of £400,000 in the reporting period.
Facing a cash crunch, Premier’s pallet network Palletforce made a short-term loan of £400,000 in December 2017 in exchange for an 8% equity stake in the business, although MT understands this is a temporary measure.
Christopher also appears to have put £300,000 of his own money into the business via preference shares, safeguarding the business in the short term.
In a statement Christopher said: “The group faced a challenging trading period in 2016 and the first half of 2017, but made a number of successful changes to turn things around. The board took corrective action to improve efficiency and control costs and we are pleased to have achieved a significant improvement in financial performance.
"We expect further improvement and a return to profit once a full year effect of these measures has taken effect.”
A number of new contracts were won during the period including a three-year agreement with Tile Giant to supply over 100 stores nationwide on a daily basis, Premier said.
It also continues to deliver cost and operational efficiencies to Boal Group, described as a significant contract for the company.
Premier said that in the eight months to December 2017, earnings before tax at the group improved by more than £1.1m. This resulted in it turning a £739,000 loss (over 16 months to April 2017) into a £190,000 profit (for the eight months to December 2017) at its haulage business.
