Costs associated with the opening of a new cold store last October at Boroughbridge, Yorkshire-based food logistics specialist Reed Boardall Group had a significant effect on the firm’s pre-tax profit for the year, it has emerged.
The group’s latest accounts reveal a 5.7% increase in turnover for the year to 31 March, from £55.1m to £58.3m, but a 35% fall in pre-tax profit from £5.4m to £3.5m.
Commenting on the results, the firm’s directors said utilisation of the new cold store was expected to grow “gradually” over its first two years, adding: “Additional running and set-up costs have had a negative impact on the profit for the financial year, while income from the extra capacity has yet to improve.”
Aggressive competition had also put pressure on prices at the cold storage subsidiary, said the firm.
The group’s transport subsidiary had a good year, growing its turnover both indirectly, as a result of the expansion in cold storage capacity, and from other direct business, said the directors. The margin at the transport division “continues to be small” however and is “constantly under pressure, particularly from increases in the cost of fuel and wages”, said the directors.
Staff costs at the firm also rose significantly during the year thanks to the arrival of 50 new employees, 21 of them in the cold storage operation and 29 of them in the transport division.
