Europa Road more than doubled its pre-tax profit in 2022 with a “strong trading performance”, despite the challenges of a continuing driver shortage, wage inflation and rising fuel prices, according to its latest financial results.

The company, which is part of the Europa Worldwide Group, offers distribution services from the UK to Europe, providing a sheduled daily round trip for customers’ goods, as well as import and export on a groupage, part load and full load basis.

Europa Road customers can also access the group’s Europa Flow service which takes care of customs declarations, and duty requirements in advance of shipments arriving at their destination, including VAT and duty for imports and exports to and from the EU.

In its latest annual results, for the year to 31 December 2022, Europa Road reported turnover rising to £179.2m (2021: £143m) with pre-tax profit almost doubling to £12m, up from £6.2m in the previous year.

The strategic report to the annual results said: ”The company delivered another strong trading performance during 2022 with the Europa flow product proving a valuable addition to the company performance during the year.

“There continued to be challenges during 2022 with the increase in prices throughout the market, noticeably with drivers wages, the shortage of drivers and fuel prices. However, our contracts with customers allowed us to pass these increases on and having done so also allowed us to increase our turnover.”

Europa Road employed 594 staff, up from £509 in 2021 and saw its wage bill rise in the year from £17m in 2021 to £21.2m in 2022. 

The company praised its internally developed IT system which it said it is continuing to develop and which had helped it “maintain a competitive advantage” over rivals.

“The directors are pleased with the performance of the company in 2022, having seen a significant increase in both revenue and profit over 2021, the report concluded.

Parent company, Europa Worldwide Group, which also includes a warehouse and air and sea division, has also published its latest annual results for the period, revealing group turnover of £290.4m (2021: £264m) and pre-tax profit coming in at £15.4m (2021: £10.1m).

Europa Worldwide, which employs a total of 1,121 employees across its three divisions, said in its report to the results: ”The group had delivered an exceptional performance in 2022 with both revenue and profit well ahead of 2021 levels, aided by the company’s Europa Flow product and the Corby warehouse, where significant investment helped to produce a strong result for the year.”

However it noted that its air and sea division had seen a fall in both revenue and profit, as prices softened ”significantly” across the industry, with, for example, the cost of moving a container from the Far East to Europe reducing by about 65% during 2022. 

The group’s strategic report to the results added: ”Inflation and the associated increase in prices was a key challenge during 2022 but one which the group was able to successfully manage.”

However it warned that as the economy tightens ”any further cost increases to our customer base becomes more difficult. Additionally, increased interest rates will start to hit the spending power of the consumer which in turn will lead to a lower demand for the services we provide.”

It added that the group had also invested ”heavily” in increasing its sales teams across all three business units, adding that ”whilst this will reduce our profits in the short term, we believe it will add significant growth to our profitability in the longer term, especially once the economy starts to recover.”

It concluded: “The directors are pleased with the performance of the group in 2022, having seen a significant decrease in both revenue and profit over 2021 and believe that the group is in a strong position to move forward once the marketplace picks up.”

 

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