Bibby Distribution’s turn-around strategy has resulted in the MT Top 100 operator moving back into the black after a recent tough period.
In the year to 31 December 2016, the firm made an operating profit of £2.3m, compared with an operating loss of £4.3m in 2015.
This included an exceptional gain of £2.5m relating to a legal settlement regarding a historic contract. Without this, the company would have reported an operating loss of £211,000.
Although turnover fell 12% to £187m in the period (2015: £213m), pre-tax profit was up 67% at £1.6m (2015: £4.9m loss).
Bibby credited the bounce back on a profit improvement plan that looked at four key areas: organisational right-sizing; procurement; commercial review; and transport optimisation.
Chief financial officer Richard Morson said: “The improvement plan has been about reducing the fixed cost base of the business and making it more variable to revenue.”
Some tough decisions were made to achieve this, he told MT, including a reduction in headcount across back office functions, as well as a review of its property portfolio.
“Over the past 12 months there’s been a move from expensive properties, which are a fixed cost, to more cost-effective properties in better geographic locations,” said Morson.
This included the opening of the 280,000ft² G-Park facility in Wakefield last year, its Fusion hub in Bury and a second Max Park warehouse in Corby.
“Having the right facilities in the right place at the right cost means we can competitively win business, which is great,” said Morson.
A commercial review of the company’s historical contracts was also undertaken to ensure they were still profitable with rate increases secured or business exited if in a loss-making position.
“It’s about the quality of earnings now,” said Morson. “These are much better than 18 months ago as some of them were legacy contracts and not challenged.”
The company’s 90 sites are now under one transport management system, enabling Bibby to identify and sell spare capacity on the network.
Microlise telematics have been rolled out across the company’s 2,300 trucks and trailers, while recruiting a team of national driver trainers has seen an improvement in drivers’ performances.
Bibby Distribution is the UK transport and warehousing operation that sits within the Bibby Supply Chain Services umbrella.
Its senior team is:
MD: Duncan Eyre
CFO: Richard Morson
Commercial director: Nigel TullettSister businesses within this wider holding group include Bibby International Logistics (a predominantly air and sea freight forwarding service) and Packaging Logistics Services (an independently run packaging business).
The group used to also include training division Systems Training and agency business Direct Workforce, however these have now been disposed of as the group aims to concentrate on its core logistics activities.
Bibby Supply Chain Services group turnover from continuing operations fell from £217.9m to £194.9m, while the group’s operating loss, excluding exceptionals, improved from a loss of £4.9m in 2015 to an operating loss of £300,000.