Fagan & Whalley has blamed the UK driver shortage for a near two-thirds fall in pre-tax profit.

Reporting its annual accounts for the year ended 30 April 2015, the Meadway, Lancashire-based company's results revealed that pre-tax profit fell 58% to £515,153 (2014: £1.2m).

MD Stephen Fagan told Motortransport.co.uk that it had been “a tough year” for the company, which also has a site in Coventry.

“We had a lot of issues because of the driver shortage, which led to a lot of hire driver costs. We started to use agencies for the first time in the history of the company. We got to a point where we had to start using them just to fulfil customer demand,” he said.

Fagan added that the company’s profit had also suffered as a result of fleet modernisation, which he said was implemented, in part, to attract new drivers to the company.

He said: “We’ve been working hard at trying to attract new people. We’ve introduced better terms and conditions and better equipment. They’re a more stable, happier bunch now and we’re using fewer agency drivers.”

The company has also tackled its skills shortage head-on, with in-house training and its own apprenticeship scheme. It also runs a dedicated training vehicle.

The haulier’s turnover for the year grew 4.5% to £23.2m (2014: £22.3m).

Fagan said: “We knew we’d suffer a bad year because of the lack of drivers, and we knew we had to weed out some old deadwood like customers that may have been causing inefficiencies.

“But we’ll have a better year this year, because we realised where we were going wrong and have turned it around. I think we’ve exceeded last year’s margin by 50% so far.”