Lenham Storage Company almost doubled its pre-tax profit in 2021, despite the impact of the Covid-19 pandemic and the driver shortage crisis - which saw the company give “significant” wage rises to its HGV drivers and warehouse staff.

Lenham Storage Company’s sister company Lenham Storage (Southern), also delivered a strong pre-tax profit surge, jumping from £349,000 to £1.2m in the period.

In its latest annual results for the year to 31 August 2021, Lenham Storage Company reported revenue rising almost 11% to £45.5m, up from £41m in the previous year. Meanwhile pre-tax profit rose to £2.2m (2020: £1.2m) in the same period.

The company, which has its headquarters at Lenham, Maidstone, has an operating licence for 114 trucks and 235 trailers and specialises in ambient grocery and FMCG storage and distribution.

In a review of its latest results Lenham Storage Company said it had enjoyed a “successful” year, aided by continued demand throughout the pandemic for the transport of food and paper products, from its clients, which include supermarkets and 3pl and 4pl companies.

The review noted that HGV driver shortages had been one of the biggest challenges that the company had faced in 2021 and continues to face this year.

It said it had raised driver’s rates “significantly” last year, adding: “Though we were able to stem the haemorrhage of departing drivers and in fact were able to persuade some who had handed in their notice to change their mind and persuade others who have already left for other opportunities to return, there has still been a drip of departing drivers.”

The review warned: “The pressure on driver pay rates will return in the coming 12 months and with the significant increase in the living wage - increasing this rate by 59p, the gap between skilled drivers and the new living wage rate will become further squeezed and the pay rate for class 1 & 2 drivers will again need to be addressed.”

On the upside the company reported that it had also negotiated some key rate rises in the year but said that “more significantly” it had benefited from reducing its cost base in certain key areas.

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Brexit’s impact on the business in 2021 had been “minimal”, the review noted, adding that the effect of Operation Brock along the M20 had caused it the most difficulty. Client demand for additional warehousing, due to Brexit, saw the company continue to rent a number off-site warehousing facilities, although the review said a number have been let go in the year.

During the year, Lenham Storage Company purchased further warehouse capacity in Sittingbourne, to provide additional further support to the company’s Sittingbourne site. The new site is currently being fitted out. The company also purchased the final property it did not own on its site at Old Ham Lane in Lenham, Maidstone, at a cost of £501,000.

Looking to the future the company said: “The board continues to look for opportunities to expand its operations and its desire to have a Midlands hub remains its ultimate aspirational goal.”

Lenham Storage Company’s sister company Lenham Storage (Southern), which is based in Andover, also reported its annual results for the year to 31 August 2021 in the same week. The company saw turnover rise to £10.9m, up from £9.9m in the previous year, whilst pre-tax profit jumped from £349,000 to £1.2m in the period.

In the review of its results the company, which has an operating licence for 80 trucks and 45 trailers, attributed the pre-tax profit leap to”an increase in client rates but more significantly through cost of sales savings, that began in the second half of the last financial year and continued on through 2020-21.”

It added: “Though the marketplace remains extremely competitive, the company is confident that the practical steps adopted to reduce costs and maximise profits will leave the business well placed to meet the inevitable challenges ahead.”

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