acst.trucks

ACS&T said squeezed rates and higher subcontracting costs in its transport operations were the main reasons for a fall in operating profit during 2014, despite a boost in turnover.

Results for the year ended 27 December 2014, show an operating profit before exceptional costs of £500,000 (2013: £1.2m). Turnover rose 4% from £20.5m to £21.3m in the period.

MD Malcolm Johnstone said the results were in line with company expectations given the competitive environment in which the business operates.

He added: "Against a challenging economic climate, we have remained focused on delivering a quality service and providing greater value for customers, enabling us to build on our relationship with key clients."

This includes the opening of a new cold store in London at the half year for customer Ticco Foods, enabling it to expand its service by offering case-level van deliveries into the south of the country. The company said revenue from this operation was one of the main reasons for the overall increase in turnover during the year.

“Transport turnover increased, but at lower margins due in part to competitive pressures on rates and also increased subcontracting costs. The decrease in profitability of the transport operations is the main reason for the reduction in operating profit,” Johnstone said.

ACS&T also invested £800,000 on a fleet of 15.65m longer semi-trailers as part of the DfT's ongoing trial, which it said has brought significant operational benefits to a key customer by reducing the number of deliveries required.

It also spent £300,000 on new energy-efficient lighting for the firm’s cold stores to help fulfil its climate change commitment. Johnstone said: “This continues our strategy of continued investment in the business to ensure long-term profitable growth.”

Staff training has also been a key focus during 2014, with all new warehousing staff inducted onto a QCF logistics scheme, and a number of apprenticeships underway in customer services and engineering.

The company is also planning to invest in a new regional office at its Wolverhampton site.

“The competitive environment remains difficult, however, with over-capacity in the market, resulting in pressure on customer rates. We’ve established a strong platform for growth going forward, we’re firmly focused on the future and the next stage of development," added Johnstone.

Johnstone was recently appointed as president of the Food Storage & Distribution Federation.

Topics