Sheffield-based Tuffnells Parcels Express saw a 16% revenue boost in the first eight months following its management buyout, according to its latest financial results.
The management team bought Tuffnells Parcels Express - known as The Big Green Parcel Machine after its fleet of 1,200 green trucks - for £15m in May 2020, just six years after Smiths News Group had acquired the firm for £100m in 2014.
The buyout was prompted by the company experiencing years of poor performance under group stewardship. The management team have since pledged to return the company, which employs over 2,450 staff, to its place as the UK’s number one carrier of mixed freight and items of irregular dimension and weight (IDW).
Reporting its latest results for the 16 months to 31 December 2020, the company revealed that following the sale on 2 May 2020, revenue rose to £114.3m in the first eight months, compared to £98.2m for the previous eight months to 31 April 2020.
In its review of the business, the board said that in the last eight months under the ownership of Smiths News Group, four depots were closed and the customer base rationalised due to the impact of the Covid-19 pandemic “which led to a reduction in volume capacity, service deterioration and reduced revenue”.
Read more
- TIP strengthens Tuffnells tie-up with de-fleet programme and new trailers
- Tuffnells returns to profit six months after MBO
- Connect Group reveals more details of strategic review of troubled Tuffnells business as CEO steps down
Despite this low starting point, following the sale, revenue rose by over 16% to £114.3m in the first eight months, compared to the previous eight months.
The review said that the revenue rise coupled with “strong, but sensible, cost controls” yielded a gross margin of 21.6% for the period May to December 2020, compared to 11. 3 % for September 2019 to April 2020.
The final six months of 2020 saw an operating profit of £1.05m and the overall pre-tax profit for the 16 months to 31 December 2020 was £6m, compared to a pre-tax loss of £29.3m in the 12 months to August 2019, the review added.
Looking to the future the board said it expects continued volume and revenue growth as a result of service improvements, adding: “Profits are expected to follow the same pattern, but aided further by improved productivity and sustained cost management.”
Commented executive chairman and chief executive Michael Holt: “Within eight months under new ownership, we successfully returned Tuffnells back to profit after an ingrained major loss-making period. In the months since, we have continued to see significant and sustainable improvement, demonstrating a remarkable and rapid turnaround for the business.”
