Tanker company Abbey Logistics is on the road to recovery after more than halving its losses in the past financial year and delivering ‘strong profitability’ this year.

Unveiling its annual results to 27 June 2020, Abbey Logistics said underlying EBITDA in the year had risen “significantly” to £4.6m - a 37% increase over the prior year - whilst net losses were reduced by 68% to £1.2m.

The company said financial performance has been much stronger in the second half of the period, resulting in £1.6m of net profit in the first four months, improved levels of cash flow and lower levels of net debt.

Its annual results show turnover rising in the year to 27 June 2020 to £62.9m (2019: £62.7m) with pre-tax losses reduced by over two-thirds to a loss of £1.3m (2019:£3.7m).

In its strategic report to the results the company said having a “settled” senior management team in place and applying operational efficiencies and cost cutting strategies was a key factor in improving performance, with clear benefits by the second half of the financial period.

It added that it had also secured a number of new customers, improved volumes and renewed key customer contracts.

Unaudited trading results for the first quarter to September 2020 showed an underlying EBITDA of £2.6m, representing a 46% improvement on budget and a more than doubling of the EBITDA achieved in the three months to September 2019, the report added.

Whilst Abbey’s trading volumes took a hit due to the first pandemic lockdown, the report said that by June 2020 they had bounced back to pre-Covid levels, helped by the firm’s food ingredients contracts.

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With the end of the Brexit transition period approaching the company said it has also seen increased demand for space at its Bromborough warehouse.

Matthew Male, finance director said: “Improved financial performance has continued into the new financial year (FY21) and trading for the first four months to October 2020 showed an EBITDA of £3.4m, more than double the profitability delivered in the comparable four months to October 2019, maintaining the month-on-month momentum that we saw in FY20.”

Mike Ellis, business development director said: “Whilst we have been successful in securing new customers in the past couple of years, we are now in a position both operationally and financially to increase the pace of our growth in the food, construction and polymers sectors, and are well positioned to secure opportunities already identified in our pipeline with both new and existing customers.

“The business has matured over a 10-year period, growing revenues from £18m to £65m, establishing itself as the market leader in its core market whilst successfully expanding into new sectors, led by strong customer demand and a reputation for high quality service.”

Steve Granite, chief executive added: “Having set out our long-term strategy to the board and our investors in 2017, we knew that we would take some pressure financially in the short-term to effectively restructure and refocus the business for sustainable and commercially responsible growth - this has given us a fantastic platform on which to grow the business whilst improving our service and delivery performance to existing customers.

“We can clearly see that the actions we took in every aspect of the business have created a company that is now operating in line with our historic levels of profitability but based on much higher levels of revenue and with significant growth potential ahead of it.

“Our performance during the second half of last year was a clear indication that changes we have made across the business have taken effect and showed month-on-month improvements in profitability, which has continued into this year.

“Our performance has shown the strength of our unique business model and management team, which has enabled us to grow existing customer relationships, win new business, position us for growth and return Abbey Logistics to profitability, all despite the challenges of Covid-19.”