Kinaxia’s acquisition of AKW Group and Fresh Freight helped deliver a 48% rise in revenues in 2019, but the group’s continuing acquisition drive and IT investments contributed to a loss of £1.8m in the period.
According to the company’s latest annual results for the year to 31 December 2019 the company saw revenue leap to £169.9m (2018: £114.9m). However pre-tax losses increased to £1.8m from £755,540 in the previous year.
Kinaxia, which runs a fleet of 845 vehicles, employs over 1,600 staff and operates 2 million sq ft of warehousing, attributed its deepening losses to investing “heavily” in acquisitions in the period.
Since its launch in 2012, Kinaxia has acquired 12 companies including Bay Freight, William Kirk, NC Cammack & Sons, Foulger Transport, Lambert Brothers Haulage, Panic Transport (Contracts), AJ Maiden & Son, Mark Thompson Transport and BC Transport 2017.
In October 2018 it bought Manchester logistics firm AKW and a month later purchased Gateshead-based Fresh Freight. Its latest acquisition is Bristol haulier David Hathaway Transport, which it bought in May 2019.
Other significant investments in the year include spending on new warehousing IT systems and expanding its senior management team, according to the company’s review of the business.
New recruits to the board included Vanessa Hope, who joined Kinaxia from Clipper Logistics, taking on the role of group sales and marketing director.
In February this year, former Kuehne + Nagel director Simon Hobbs was appointed chief executive, just ahead of the Covid-19 pandemic lockdown.
Hobbs told motortransport.co.uk he underwent a “a baptism of fire” as volumes fell by over 30%, forcing him to furlough 585 staff and park up 277 trucks in April.
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He added: “I had just joined and it was not what I had expected. But it brought the team together and we became stronger for it – and our decentralised structure meant we could react very quickly to the crisis.”
By August volumes returned to 97% of 2019 levels. However the impact of lockdown saw around 100 driver and administrative roles cut and the fleet reduced by 9% to 845 vehicles.
“Because we are a group of family businesses it was very tough - but now it is all about growth – our plan is to rebuild and create new jobs,” Hobbs said adding: “We have a pipeline of £55m of new opportunities and we recently won two new warehousing contracts worth a combined £5m a year.”
The group has also expanded its K-link hub operation to include direct trunking between member companies.
Hobbs insisted that K-link will not replace the group’s ties with pallet networks which he said enable wider UK coverage and choice. He added that Kinaxia “ has good relations with the majority of the networks.”
Looking ahead Hobbs said the company’s goal is to become one of the UK’s top ten warehousing and distribution businesses, offering high service levels whilst maintaining a “family of families ethos”.
Further acquisitions could also be on the cards. “There are a few geographical blanks on the map to be filled - but it is not just about geographical acquisitions. We will also look at companies that can bring us new services or products,” he said.
Hobbs is also keen to drive organic growth in the business. “My role is to build on the investments Kinaxia has already made - to get value out of those investments and get the businesses working even more closely together.”
He added: “Our three-year plan is to grow by £20m a year for the next three years and to have a turnover of £250m by the end of 2023 – and that growth excludes further growth via acquisition.”
