Jack Richards & Son experienced a strong financial year during 2015, posting a 5.1% boost in turnover and a 16.7% rise in pre-tax profit.
However, MD Peter Brown warned the 2016 market would likely prove more challenging to navigate as the driver shortage continued to push up wages and agency costs.
“Last year was good, but this year is being more difficult with the prime reason being the driver market. This is very difficult. Wages had to increase, and rightly so, but agency costs and the sheer shortage of drivers has really put pressure on us, as it has all hauliers,” said Brown.
Additional pressure has come from the falling price of diesel, which has meant the company has had to issue increasing numbers of fuel rebates to customers making it difficult to offset the rising driver wage bill, he added.
Speaking to MT about Jack Richards’ robust performance for the year ended 31 May 2015, Brown said the company had secured two significant contracts that provided “more sophisticated total solutions” for customers.
“They boosted turnover by around £4m, which is great news and helped drive business forward,” he said.
The business is adapting its model to keep pace with market sector changes, particularly in its traditional FMCG operations, which has seen a drop in the volume of products moving between manufacturers and “bricks and mortar retail space”, said Brown.
However, this has been offset with a rise in products going to the likes of Amazon and for online fulfilment.
“The market is definitely changing,” he added. The online market has certainly helped our Palletways operation and we are seeing big volumes growth there, particularly in home deliveries, all driven by online sales. That's been going on for many years now and is really becoming well established and a very important part of the business.”
The company has traditionally run 18-tonne rigids for its pallet network operation, however it has seen a marked shift towards smaller 3.5-tonne and 5.5-tonne rigids as home deliveries increase.
Jack Richards is a member of five-operator consortium Harlequin Logistics, which it said is continuing to develop and get stronger and proving a perfect tool to build strong links with other hauliers. “It gives us direct benefits [of work via the consortium], but also hidden benefits of being able to talk to other hauliers. It's very useful to be able to sit down and have very open discussions about the business.”
During 2015, the company updated around half of its 260-strong tractor unit fleet with 130 Euro-6 Dafs, which Brown said he has been very impressed with due to improved fuel consumption over Euro-5 trucks and the strong driver acceptance since the cab was redesigned.
Turnover for the year increased by 5.1% to £35.6m for the year-ended 31 May 2015, while pre-tax profit rose 16.7% to £951,007 from £814,620.
