Lenham Storage posts growth despite rates squeeze

Lenham Storage walked away from nonviable business last year rather than compromise its service standards, but the operator’s MD has warned that there has been no let-up in rate pressure since.

Keith Abrehart, MD of the Kent-based firm, said of the company’s newly published results: “We have achieved what we consider are satisfactory results for the past financial year because, although low margins have sadly become the norm in our industry, our figures have been achieved within a period of both increasing pressure on our rates, and continuing investment in our business.

“In a market still reflecting a depressed economy, we have countered evidence of decreasing rates by taking cost out where we can, and if necessary walking away from business that is financially not viable.

“We do not have a two-tier service level, and so we will not provide services for any operation if the high standard we set ourselves cannot be supported by the rates offered.”

Since the year end the company has completed on a new 50,000ft² warehouse in Sittingbourne on 28 March, which takes its warehousing capacity to 730,000ft².

Efforts continue to find further efficiencies. “Significant investment has, and is still being made in environmentally friendly trucks and trailers, including more diesel electric hybrid distribution vehicles, and longer, more slippery trailers,” said Abrehart.

To this end, Lenham will take delivery of eight dual-fuel artics, likely to be Euro-5 conversions of Daf and Mercedes-Benz units, in the final months of this year.

“We are finding more clients are looking for clear activity in this area, rather than a simple vague statement supporting the principles of saving energy with cleaner emissions,” said Abrehart.

Growth maintained

Lenham Storage group’s combined results – comprising the Lenham Storage Company and smaller sister-company Lenham Storage (Southern) - show an 8.9% increase in both turnover and pre-tax profit in the year to 31 August 2012 despite the tough operating environment.

Turnover at the group increased to £30.8m (2011: £28.2m), while pre-tax profit came in at £643,802 (2011: £591,263).

The operator enjoyed a strong performance in 2011 too.