As Marks and Spencers’ acquisition of Gist nears completion the logistics firm revealed a modest rise in pre-tax profit for last year aided by a leap in turnover.

Reporting its annual results for the 53-week period ending on 1 January 2022, the company unveiled a 17% rise in turnover to £551.5m (2020: £471.8m) with pre-tax profit rising 3.3% to £34.1m (2020: £33m), compared to the previous 52-week period.

Marks and Spencer Group announced its acquisition of Gist in July last year. The deal is valued at around £255m.

Gist, which employs over 5,600 staff and operates a nationwide fleet of over 1,800 trucks and 2,300 trailers, is the principal contract logistics provider to M&S Food and is currently owned by Linde Group subsidiary Storeshield.

The firm provides the majority of M&S Food logistics services via a network of eight primary and ten secondary distribution centres located across the UK and the Republic of Ireland, including a number of freehold warehouses.

The purchase is part of the retailer's plans to modernise its food supply chain network and to eventually release it from a higher cost legacy contract which expires in 2027.

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It will allow M&S to eliminate contractual fees and costs, align operational processes and invest in its network under its Vangarde supply chain optimisation programme.

In its strategic report to its latest financial results, Gist said volumes had stabilised following the initial impact of the Covid-19 pandemic during the year, whilst the knock-on effect of Brexit border controls had been mitigated by “operational adjustments”.

The company had also responded to the driver shortage during the year by reviewing driver wage rates and implementing driver training courses.

The report added: “Against this background, overall food retail activity levels have improved and the company has been able to increase sales compared to the previous period.”

Turning to the acquisition, the strategic report said its completion is conditional on the “separation of certain businesses from Gist which do not form part of the target business” as well as merger control approvals, adding that it is expected to take place before the end of 2022. It added that Gist will retain ownership of Gist Distribution under the deal.

As part of the acquisition, Gist’s Food Service business is being sold for £3.5m to Linde and its name changed to Food Services Logistics. This deal is also set to be sealed by the end of the year.

A response to a request for comment from Gist has yet to be received.