Fedex Express UK Transportation saw turnover and profit fall in the year to 31 May 2023, as falling volumes and the company’s decision to cut its logistics services fee took their toll.
Reporting its results for the year, the US-owned parcel delivery company revealed that turnover dropped to £566m (2022: £584.2m), while pre-tax profit fell by 29% to £27.3m (2022: £38.3m) in the period.
Cost of sales rose during the year to £528.5m (2022: £474.3m). However, administrative expenses plummeted to £12.2m (2022: £71.2m).
The company also reported an impairment loss of £911,000, which had been used to buy additional shares in TNT Fashion Group France SAS. The company subsequently entered administration and was liquidated.
In its strategic report to its latest annual results, FedEx attributed the company’s decrease in turnover during the year to reduced volumes.
It added that the fall in profit was a result of the company’s decision, following a benchmarking exercise, to lower its logistics services fee (LSF) from 1 June 2023, which resulted in “lower operating profit and lower margins.”
During the year the company also underwent a number of “restructuring projects” which saw staff numbers reduced from 6,904 to 6,324, the strategic report revealed.
However, operating and warehouse staff, who make up the lion’s share of FedEx UK’s staff numbers, saw little if any fall out, with their numbers rising from 6,022 to 6,095 during the period.
Staff reductions are expected to continue this year after FedEx announced in June last year that it is looking at making between 1,700 and 2,000 back office and commercial employees redundant across Europe in a bid to reduce structural costs.
The strategic report added: “The execution of the plan is subject to a consultation process that is expected to occur over 18 months.”
The results also revealed that the company’s wage bill fell to £213.1m (2022: £220.7m) in the period. At the same time, the remuneration for the highest paid director at the company rose 35% to £323,000, compared to £239,000 the previous year.
A spokesman for FedEx uk said the company was “unable to comment on this occasion.”
