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Abbey Logistics Group made a pre-tax loss of £3.6m for the year ended June 2018, after taking short-term pain for long-term gain as part of its self-set target to achieve an annual turnover of £100m by 2022.
Turnover from continuing activities - stripping out its discontinued general haulage and Pallet-Track work - was up 28% to £61.7m (2017: £48.4m) in the period. The company attributed this to several new contract wins and the acquisition of Armet Logistics in 2017.
Abbey Logistics told motortransport.co.uk that the loss was “largely expected due to a number of strategic changes made during the period as the group builds the platform for sustainable growth over the coming years”.
Indeed, the Bootle-based firm's 2018 financial period saw a major restructuring exercise take place. Abbey Logistics' general haulage and palletised operations were closed, as the business focused on strengthening its core tanker market, resulting in a loss of £1.7m due to discontinued activities.
Abbey Logistics also revealed an exceptional charge of £1.3m due to the hive-up of the Armet Logistics operation, a restructure of the management team, and additional costs associated with the closure of its general haulage arm bringing the total pre-tax loss for the period to £3.6m.
At the start of this year former Palletways MD Julian Maturi was appointed as company chairman, and Matthew Male, previously at Eddie Stobart Logistics, joined as finance director.
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Following Abbey’s management buyout (MBO) in 2016, supported by NorthEdge Capital, Abbey Logistics set itself the target of achieving an annual turnover of £100m by 2022.
CEO Steve Granite told motortransport.co.uk he remains confident Abbey will achieve this target and do so profitably.
“The last couple of years have been focused on executing the strategic review which was to focus on our core tanker service and invest in infrastructure including safety and compliance, IT, management, people and depots,” said Granite.
He added: “We achieved a great deal in a very short space of time and we needed to restructure key departments and invest in critical areas to build a business that can reach £100m.”
Granite added that while the pre-MBO family firm was a “solid business”, it required major investment if it was to double in size. “Thankfully we have investors in NorthEdge who want to invest ahead of growth and have supported the short-term losses in order to realise the longer term growth strategy.”
Abbey Logistics has started 2019 in a “much-improved place”, said Granite, with financials improving, alongside strong customer satisfaction and retention.
Benefits from the new management structure are also now coming to fruition, he added. “I am delighted to have Julian and Matthew on board as they are like-minded individuals who understand the logistics sector like myself and the rest of the remaining board members.
“We will spend the next six months continuing to drive the performance in the right direction and will look to consolidate following contract wins with Hovis and Tarmac recently,” he said.
