Kinaxia Logistics will buy its 11th haulier by the end of the year, according to director Peter Fields.
Speaking to MT this week, after the announcement of Kinaxia’s acquisition of AKW Group, Fields said the haulage and warehousing group was set to purchase another logistics firm within “the next few weeks” and would make further acquisitions in 2019.
“If you look at where we are geographically it becomes obvious where we need to be – it is a case of colouring in the map in areas such as the South West,” he said.
He added: “However we are not doing this randomly. What we are looking for are well established quality operations which are typically family-owned or maintain a family-owned culture.”
Kinaxia Logistics' acquisition drive has been given added muscle after the group secured an additional £7.5m of funding from Permira Credit Solutions and an additional £13.1m from HSBC boosting its acquisition war-chest to around £35m, Fields said.
Expanding on the group’s strategy, Fields said: “The plan is to carry on putting together good companies over the next 18 months by which time we should have become a truly national haulier with a geographical presence in every postcode and at that point we will move to an organic growth strategy.”
He added that Kinaxia’s acquisition strategy did not include plans to reduce staff numbers and close depots across the group. “That describes the worst kind of venture capitalist.
"What we do is to allow our companies to continue to run in a decentralised way whilst at the same time taking away, for example, the pain of regulatory functions such as compliance by centralising those functions,” he said.
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To this end Kinaxia has also centralised fleet purchases to give the group greater purchasing power, and rolled-out group fleet management and CRM software, as well as introducing strategies to drive more efficient utilisation of the group’s fleet and warehousing assets.
The management teams of each company in the group are incentivised by becoming shareholders in Kinaxia. “In that way they all have a vested interest in making the group even better,” Fields added.
Kinaxia’s latest purchase of Trafford Park-based AKW Group brings Kinaxia’s total fleet capacity to more than 770 trucks and 852 trailers.
Pallet networks
AKW Group is the fifth Palletline member to be bought by Kinaxia, following hot on the heels of William Kirk, Foulger Transport, Lambert Bros and Panic Transport, although both Foulger Transport and Panic Transport (pictured) have since left Palletline membership.
Asked whether Kinaxia is targeting Palletline companies, Fields said: “That is not the case. It might look like that but we just buy good companies, their pallet network membership is not a driver, it just so happens that those companies were Palletline members.
“The reality is that we see the pallet networks as a core part of the landscape. Anyone who wants to move pallets needs the pallet networks so we see ourselves as working in partnership with the pallet networks and that is our aim.”
Financial results
Kinaxia Logistics' latest annual results to 31 December 2017 show turnover rose 132% to £81.8m (2016: £50.2m) boosted by its purchase of four companies: Panic Transport, AJ Maiden and Sons, Mark Thompson Transport and BC Transport in the period.
The group reported a pre-tax profit of £567,337 (2016: £538,846).
The group spent £22m, net of cash acquired on acquisitions, during the period and £4.9m on acquiring property, plant and equipment.
The results detail the following net assets added during the period: £3.1m, Panic Transport; £11.4m, AJ Maiden; £5m, Mark Thompson. In the period Kinaxia also purchased BC Transport (Bollington) out of administration for £40,000.
The report confirms a “significant” increase in debt facilities in the year, increasing Kinaxia's existing £25m loan facility with Permira Credit Solutions by £7.5m and extending the repayment date to February 2022.
The business has also entered into a new invoice discounting facility and sale and lease back agreement with HSBC to raise “an additional £13.1m to fund acquisitions”.
