EV Cargo Distribution, which trades as EV Downton, saw its pre-tax loss more than triple to over £14m in 2023, after a “tough trading year” which triggered a major strategic overhaul of the company, its latest financial results have revealed.
According to the recently published annual results, which cover the year to 31 December 2023, the company saw turnover drop to £121.5m (2022: £140m) and its pre-tax loss plummet to £14.4m during the year, compared to a loss of £4.7m in 2022.
EV Downton, which is a subsidiary of EV Cargo Group, provides road freight and contract logistics services in the food and drink, home appliances, paper and packaging, retail and construction sectors.
In 2023 EV Downton operated a fleet of around 300 trucks and 1,200 trailers, and employed more than 600 drivers at over 20 locations in the UK. It also operated 1 million sq ft of warehousing space, providing storage, order fulfillment and other value added services.
In its strategic review of the results, the company said its performance had been hampered by falling consumer demand driven by rising inflation and interest rates, which impacted sales in the consumer goods segments, including food, drink and home appliances.
The review said: “Despite the hard work of the management team and all employees through the year and an unwavering focus on servicing customers, Downton had a tough trading year 2023 as the challenging market environment continued to expose fundamental issues with the flexibility and cost base of the current operating model.
“This clearly highlighted the need for a strategic shift, with plans being drawn up through the third quarter of 2023 for a lower and more agile cost base to be implemented from the fourth quarter of 2023 onwards, and to be fully completed during the second quarter of 2024.”
It added: “It is clear that the nature of demand is following a multi-year trend of increasing volatility and unpredictability, both for road rate and contract logistics services. Key competitors of EV Downton have been adjusting their operating models and downsizing their fleet and warehouse assets to match the new normal where resource flexibility and agility is key.
“As such, EV Downton will make a strategic shift in its operating model that will involve resizing the road asset base at the same time moving to a high intensity double shift model that maximizes truck productivity and minimizes empty mileage.”
The review said fleet levels would also be reviewed in line with growth expectations, operations centres “rationalised” and the EV Solutions division, which has an asset light 4PL model, leveraged to complement the Downton asset heavy model.
Commenting in the review of the results, chief executive Andy Humpherson said: “EV Downton is embarked on a transformation program that will ensure the long-term sustainability of the business by embedding a level of operational agility and service excellence that is a prerequisite for success within a market that is increasingly characterised by volatile and unpredictable demand, ever shortening lead times and ever higher customer expectations, full service quality and reliability.”
In a statement, EV Cargo told MT that EV Cargo Distribution, which trades as EV Downton, has made “significant” progress since 2023, thanks to the group’s strategic review of of the business.
EV Cargo said: “In 2024, EV Cargo Solutions, comprising its two main subsidiaries EV Cargo Solutions Limited and EV Cargo Distribution Limited, demonstrated resilience and strength, providing excellent customer service in a challenging environment.
“Together, these entities operate to deliver managed transport solutions and contract logistics services to our customers.
“The business made significant strides in its strategic transformation, successfully streamlining operations across its sites and optimising its road fleet.
“Financial performance improved compared to 2023 and showed positive growth throughout the year.
“EV Cargo Solutions is a vital part of the EV Cargo Group, which reported strong financial results for 2024 and is confident regarding the continuing performance improvements at Solutions.”
In a recent comment on the overall performance of the group, Heath Zarin, EV Cargo executive chairman, said: “EV Cargo has delivered strong customer service and impressive financial results, even amidst a volatile global supply chain landscape.
“Our ability to adapt quickly to changing market conditions has enabled us to meet and exceed customer expectations, reinforcing our reputation as a trusted partner in logistics. Despite industry-wide challenges, our dedicated team has remained focused on providing customer solutions that drive efficiency and satisfaction.
“I would like to thank our employees, partners and customers for your continued support and trust in EV Cargo. Together, we are poised for an even more successful 2025 and beyond.
“As we look to the future, we are excited about the opportunities that lie ahead. The strategic initiatives implemented in recent years have laid a strong foundation for growth and innovation. We remain committed to delivering exceptional value to our customers and stakeholders.”
