Brexit stockpiling and major healthcare deal boost pre-tax profits at Yusen Logistics

Japanese-owned Yusen Logistics UK saw pre-tax profits leap in its latest financial year helped by a new healthcare deal and rising demand for warehousing as healthcare clients stockpiled ahead of Brexit.

However, the Northampton-based logistics firm, which counts Seiko, Mitsubishi, Honda, Halfords and AstraZeneca among its clients, warned that revenue will be hit this year due to the effect of the Covid-19 pandemic on business – although it predicts that its broad range of clients will help ameliorate the impact.

According to the company’s latest annual results to 28 March 2020, pre-tax profits rose to £2.4m (2019: £823,000). Revenue also rose to £219.9m (2019: £215.9m) in the period.

However transport revenue fell to £101.4m (£104.1m), whilst contract logistics revenue fell to £61.6m (£66.1m). Other revenue came from the firm’s ocean and air freight divisions.

The company, which specialises in the automotive, aerospace, retail, healthcare, technology and food sectors, employs over 1,400 staff and has depots in Manchester, Leeds, Rainham, Bristol, Staines, Tamworth, Egham, Nottingham, Bedford, Milton Keynes, Sunderland, Derby, Glasgow and West Drayton.

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In the strategic report to the results the company said: “Significant improvements were noted due mainly to Brexit stockpiling by healthcare customers, a new healthcare contract and increased volumes with existing customers, offset by one-off costs of £740,000 associated to the full impairment of the assets at one site and a re-assessment of the asset retirement obligations.

"The company also incurred £248,505 of foreign exchange loss during the period."

Turning to the pandemic, the report added: "The directors expect the overall general level of activity to decrease in the forthcoming period as a result of the Covid-19 crisis, with a reduction in revenue predicted (which will be off-set to some degree by a reduction in volume-related costs).

"However, due to the varied portfolio of customers managed by the company, certain parts of the business are not expected to see any significant adverse trading.

"To mitigate the impact of reduced activity volumes and revenue, the company has taken advantage of all government deferral initiatives and sought payment holidays from landlords."