Knowles Transport has returned to profit after securing two major deals, undertaking a management restructuring, and introducing tighter financial controls while resolving operational problems at its Wisbech DC.
In its latest set of annual results to 31 December 2018, filed this week at Companies House, the Cambridgeshire-based operator revealed a major turnaround, with turnover up 6% year on year to £32.1m (2017: £30.4m) and a pre-tax profit to £1.5m compared with a loss of £4.4m in the previous year.
Speaking to motortransport.co.uk, MD Alex Knowles said the firm had decided to report its 2018 accounts early, filing them just a month after the 2017 results were posted to Companies House, to show that the loss in 2017 “was purely temporary”.
Knowles said operational issues at the opening of the firm’s Wisbech DC had destroyed the firm’s profit in 2017 but were now resolved.
He added that the DC, which opened in January 2017, suffered serious problems after a major racking company failed to deliver racking in time for its launch.
"They missed their deadline which meant we were bringing in pallets with no location to put them in and that caused all sorts of unexpected problems,” he said.
He added that this, combined with the £7.5m cost of opening the new DC, the expansion of its fleet from 70 to 105 trucks in 2016/17, and the additional resources needed to bed in two major new contracts, were all key factors contributing to the profits fall in 2017.
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New direction
In February 2018 Alex Knowles, who was commercial director at the family firm, took over the position of managing director from his father Tony, who became chairman.
Knowles junior then lead a major management restructure, as part of a strategy to return to profit, whilst also introducing new financial systems.
Knowles said: “My father has led the firm very successfully for 50 years but the existing management structure was not enough to support the level of turnover we are delivering.”
He added: “After I came on board I brought in a new management team, including a new operations director and put new financial processes in place with regard to financial reporting, which we now do every week across all our divisions.”
Knowles said he was confident the company’s profit would continue its upward trajectory.
Pointing to a new major contract with an existing customer and a number of other deals in the pipeline, he added: “We plan to be in a position to deliver record profits by 2020/21. Our model is to continue to deliver the best industry service levels and ensure we do that in the most efficient manner.”
