By the time the Beast from the East had done its damage and spring was finally making itself known, official figures showed that there had been 574 insolvencies in UK logistics during the first three months of 2018.
This number, however, was an improvement on the previous quarter, prompting the Creditsafe Watchdog report for the period to announce that the industry had enjoyed “a great start to the year”.
Inevitably, that was the cue for some high-profile collapses and disruption, although we also saw multi-million-pound spending sprees and acquisitions.
The first major collapse came early, in January, when PwC was appointed to handle the compulsory liquidation of outsourcing giant Carillion.
Concerns grew about the knock-on effect of its collapse, particularly as it had 18 projects on the go and a raft of haulage businesses with which it traded. By the end of January pressure from the business secretary had encouraged the company’s bankers to launch a £225m fund to help affected subcontractors and suppliers.
Pre-pack deals
During 2018, pre-pack deals were never far from the headlines and one of the first of the year was temperature-controlled firm Bedworth Haulage’s in February.
It later transpired that the sale to C4-Safety, with which Bedworth director Robbie Thacker is connected, included “an anti-embarrassment clause”, preventing any further sale within 12 months without paying 25% back to the administrator.
Commenting on his own financial results for the year ending 31 March 2017, ARR Craib Transport chief executive Eddie Anderson said his company was in a “robust position” for the year.
Within a fortnight the Palletline member had announced its purchase of fellow Scottish haulier McCaul Haulage. But what few people knew was that behind the scenes, Anderson was also busy marketing the business and in discussions with Gregory Distribution (Holdings) to purchase it, a deal that would finally come to fruition in the autumn.
Eddie Stobart Logistics really got into a high gear following its return to the stock market in 2017, with acquisitions such as iForce driving turnover in its e-commerce division to more than double.
Some big wins followed with a £15m Cemex contract taken from Wincanton, as well as Britvic (again a Wincanton contract) and a slice of business with Tarmac. But within road transport, it was the £53m purchase of The Pallet Network in the summer that really got people talking.
But not everything went smoothly. Visitors to hundreds of KFC restaurants were met with signs highlighting limited menus and “hiccups with deliveries” in February.
As outlets closed amid chicken shortages, fingers weren’t so much being licked as pointed at DHL Supply Chain for failing to carry on where previous contractor Bidvest had left off.
“It’s an absolute cock-up,” shouted the GMB, enjoying its poultry reference a bit too much.
By March, the fast food chain had stripped its new supplier of some of its distribution work and gone back to Bidvest Logistics to supply up to 350 restaurants in the north of the UK.
Also that month, EmergeVest bought CM Downton for £75m. Ever since its formation in 2013, EmergeVest, led by CEO and founder Heath Zarin, has been buying UK logistics firms and counts NFT Distribution, Palletforce and Allport Cargo Services, as part of its group.
This was formalised in November with the significant decision to bring them all under one roof with the creation of EV Cargo, a major new independent in the sector.
Other notable acquisitions during the first half of the year include Europa Worldwide Group’s purchase of Continental Cargo Carriers, and Matthew Kibble Transport’s purchase of Coventry’s Fullforce Logistics.
The tide has turned
One of the biggest collapses and rebirths in the industry during 2018 began with an assurance to staff that wages would be paid despite a delay.
In a letter seen by MT in April, Canute Haulage Group director Noel Marshall lamented the “unwarranted speculation” about the company’s stability and insisted that the eight O-licence applications recently made by new entity Almtone, using Canute’s Gamstone address and listing a Canute director as a transport manager, was nothing to be alarmed about.
However, the alarm bells did not stop ringing, and the county court judgments against the company passed the £200,000 mark before the one-time £100m-plus turnover business underwent a pre-pack sale to Almtone for £1.3m in May.
The move saved more than 800 jobs but also led to estimations by the administrator that creditors – some £7m out of pocket – could ultimately see a return of just 15p in the pound.
Llanelli-based Owens Group had a happier year. A recovery in the steel sector coupled with contract wins helped boost its turnover by more than a fifth and an increase in pre-tax profits of 15%. Then in July it bought BTS Haulage in Greater Manchester, boosting its fleet to more than 550 vehicles and providing an annual turnover of around £90m.
A less successful acquisition strategy over the past few years resulted in Premier Logistics enduring a much bumpier ride. Its purchase of CJ Express in Hull ended in it entering voluntary liquidation during 2017 and another, DA Clayton, closed in 2016.
Premier’s financial problems were compounded by its work with Pall-Ex ending, all of which resulted in it making a loss as 2018 came to a close and drawing on financial support from its new pallet network Palletforce.
MD Lee Christopher remained upbeat, predicting the company would bounce back after “corrective action” was taken. In July the Bardon-based company entered into a company voluntary arrangement (CVA) as it was the only way some of the business, with liabilities of £8.6m, could survive.
The demise of Harris Transport in Southampton in August came as a shock to everyone, not least its staff, 70 of whom were made redundant as it entered administration.
Tears at teatime
Blame was apportioned to a change in landlord, which the haulier said it hadn’t been made aware of, and when the new landlord reverted to a three-month payment demand and backdated the payment, disaster struck. “When it happened there were grown men in tears here,” said director George Harris.
While some companies struggled this year, others thrived. Biffa went on a major spending spree and acquired four businesses; Weir Waste Services, H&A Recycling, Bisset Waste Management and some trade and assets of Vecta Group.
But Kinaxia Logistics won the prize for the most cumulative acquisitions, with number 11 sealed in November following the purchase of Fresh Freight Group in Gateshead, shortly after it snapped up Manchester-based AKW Group.
Its tremendous growth in the past few years has been facilitated by funding from Permira Credit Solutions and HSBC, providing a war-chest of around £35m.
The spending spree is expected to continue through 2019, helping Kinaxia to rise much higher than its current spot at 41 in MT’s Top 100.
Main image: Press Association
