Pre-tax profit at parcels giant FedEx UK plummeted by more than a quarter last year, the parcels company has revealed.
Reporting its latest annual results to 31 March 2019 the company, which operates a fleet of over 800 trucks and 700 trailers from a string of depots across the UK, revealed a 27% fall in pre-tax profit to £13.7m, down from £18.7m in the previous year. Turnover in the period fell by 12.27% to £218.5m (2018: £249m).
In its strategic report on the results, the company said the profit plunge was “predominantly due to the decrease in turnover as well as the adoption of a change in the operating model introduced on 1 September 2018".
During the period, the company continued to integrate its operations with TNT Express, which was acquired by parent company FedEx Corporation in March 2016 at a cost of €4.4bn (£3.4bn) in a bid by the US parent company to expand its presence in Europe.
However, almost four years later, the two businesses are continuing to integrate with the cost of integration continuing to soar from a predicted $800m (£600.2m) to around double that original figure.
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So far the integration programme in the UK has seen Fedex UK and TNT depot operations merge at Swindon, Thetford, Snetterton, North London, Scotland and northern England as well as the merger of the two sales teams.
TNT Express, which reported its annual results for the year to 31 March 2019 in September last year, also saw a fall in pre-tax profit in the period to £32m (2018: £34.3m), while total revenue rose to £670m (2018: £664m) during the year.
Analyst Frank Proud, director of Apex Insight told motortransport.co.uk: "The integration of TNT is still an issue for FedEx and there is still a question over how they can successfully manage the two operations."
