Cost-cutting drive narrows pre-tax loss at Edwin C Farrall Transport

The Flintshire-based firm provides contract distribution, general haulage and pallet network operations, together with electrical repair services, to industrial, retail and manufacturing customers serving UK and international markets.

According to its latest annual results for the year to 31 December 2025, the company’s pre-tax loss narrowed by 13.1% to £100,819, down from £116,028 in 2024, while its loss for the financial year fell by 10.2% to £154,534.

Operating profit, however, increased sharply from £83,237 to £140,447 — a rise of 68.7%, aided by cost-cutting measures which directors said were beginning to improve underlying performance.

Turnover fell 1.7% to £15.8m, compared with £16m the previous year. The company attributed the decline to softer general haulage volumes across the sector, rather than the loss of core contracts.

In its strategic report to the results, the company said: “A key achievement in the year was the reduction in administrative expenses to £3,057,250 (2024: £3,151,434), a decrease of 3.0%.

“Combined with the resilience in gross margin, this drove operating profit up to £140,447 (2024: £83,237), an increase of 68.7% and the clearest evidence to date that the cost discipline introduced in 2024 is taking effect.” 

The improvement came despite gross profit remaining broadly flat at £2.39m, with the gross margin unchanged at 15.1%.

Administrative expenses fell by 3% to £3.06m, while direct wages declined from £2.59m to £2.38m, as average employee numbers fell from 120 to 113 during the year.

Higher finance costs remained a drag on the bottom line, rising from £199,265 in 2024 to £241,266. The company said the increase reflected the cost of its borrowings, invoice finance and hire purchase commitments.

At the same time, Edwin C Farrall Transport reduced its total borrowings by 9%, from £5.4m to £4.9m. Gearing also improved significantly, falling from 363% to 230%.

The strategic report said the year had brought its challenges. It noted: “2025 continued to be shaped by cost inflation across fuel, insurance, vehicle parts and general supply chain inputs, alongside continued volatility in day-to-day and month-to-month volumes that made resource planning and utilisation forecasting difficult.”

Despite those pressures, directors said the improvement in operating profit represented “genuine progress”, with the cost discipline introduced in 2024 beginning to have an effect.

Looking ahead, the company said its focus for 2026 will be on improving profitability rather than increasing turnover, with the company planning to target performance within each operational department and keep its site and operating costs aligned with activity levels.

Fleet renewal will continue on a “disciplined basis”, the report added, with the wider group investing in electric vehicles and charging infrastructure as part of its transition towards net zero.