Food logistics specialist Associated Cold Stores and Transport (ACS&T) took a pre-tax profit hit last year after a major customer terminated a contract with the company.

Despite receiving a termination settlement payment of over £1m, the company’s pre-tax profits for the year fell to £1.8m (2018: £2.2m) with turnover falling to £25.5 (2018:£28.6m) in the same period.

Reporting its latest annual results to 28 December 2019, the Maidstone-based company said the loss of the customer combined with a “change in the mix of business” saw warehouse utilisation fall by 6% in the period whilst the average pallet throughput fell by 14%. Distribution turnover also fell, with distribution loads down by 4% in the year.

However, seasonal business and the introduction of new strategic customer accounts during the fourth quarter of 2019 saw the business end the year on a “strong positive note” according to the report.

It also revealed that ACS&T sank “considerable” capital investment of £1.9m in replacing its fleet and upgrading its IT system during the period.

The company, which operates from four sites in Grimsby, Tewkesbury, Scarborough and Wolverhampton, employs over 200 staff and has operating licences for 94 trucks and 250 trailers. Its facilities include 12 cold stores, three ambient stores, and nationwide, dedicated and shared-user multi-temperature transport fleets.

Turning to the impact of Covid-19, the company said that whilst it has seen a reduction in both product throughput and revenues, warehouse utilisation remains high.

The report added that the directors remain confident the firm can weather the impact of the pandemic but warned that the disruption will impact on profitability in 2020.

ACS&T has yet to respond for a request for comment.