Gefco UK has attributed a drop in turnover and profit to “Brexit-related” concerns and new accounting procedures.

The Coventry-based firm, which is part of global group Gefco, specialises in automotive logistics and industrial supply chain services.

French company Group PSA, which owns Peugeot, Citroën and Vauxhall, holds a 25% stake in the business, having sold off 75% of its stake in the business to Russian Railways in 2012. Gefco UK, which has 13 depots across the UK, employs over 600 staff.

In its latest set of annual results to 31 December 2019, the company revealed a 2.4% drop in turnover to £161.9m (2018: £165.8m), whilst pre-tax profit plunged by 38% to £4.4m (2018: £6.1m) in the period.

In its strategic report to the results the board said the main reason for the fall in revenues in the period was due to “the reduction in volumes of group sales caused by Brexit-related concerns”.

It said PSA sales had increased by 0.9% to £69.9m (2018: £69.3m) in the period.

The report said the drop in profit was due to the adoption of accounting standard IFRS16, which it said saw leasing costs of £9.5m replaced with a depreciation charge of £9.5m. At the same time the company recognised £1.1m in interest and related financial costs in 2018.

“Subsequently the profit after tax for the financial year is £3.54m (2018: £5.09m),” the report stated.

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Reviewing performance for the year the report said: “The volumes for new vehicle deliveries for PSA remained the same as 2018."

It added: "The warehousing activity has continued to grow with an increase of 35% cent in external sales compared to 2018.

"This was due to the sequencing activity we do for Jaguar Land Rover in the Midlands."

The report said Gefco UK was also making its business model “lighter” as part of plans to become more flexible to “the potential volume impact of Brexit".

Looking to the future, the board said it would continue to develop third-party client business with an emphasis on medium-sized businesses of over £250,000 per annum and support the development of key corporate accounts particularly in the automotive sector.

It added that plans are also afoot to extend the Corby and Portbury sites to “support the market client development in finished vehicle logistics”.

Gefco has yet to respond to a request for comment.