Cambridgeshire haulier FreshLinc has ramped up its diversification strategy after losing a “significant” retail contract last year, which hit turnover and profit, according to its latest annual results.
For the period from 29 January 2023 to 3 February 2024, FreshLinc revealed a 4% fall in turnover to £139.7m (2023: £145m), whilst pre-tax profit plummeted by 23.2% to £1.3m (2023: £5.6m).
FreshLinc has operating licences for 471 trucks and 863 trailers and boasts over 500,000sq ft of ambient and chilled warehouse storage. It specialises in temperature controlled distribution of food and horticultural goods across the UK and Europe. The company has its headquarters in Spalding, employs around 760 staff and operates four depots in Grantham; Dartford; Paddock Wood in Kent; Huntingdon and Tewkesbury.
In its business review of its latest annual results the company pointed to the loss of a “significant retail contract” to the client’s own recently acquired in-house distribution business, and the impact of the post-Covid market, as key factors impacting revenue during the year.
Other influences cited by the review include the cost of launching new facilities - including the launch of FreshLinc’s flagship 140,000sq ft, 24,000 pallet capacity warehouse in Peterborough; inflationary pressure on wages and fleet replacement costs; and falling fuel prices, which resulted in reduced fuel surcharge revenues.
The review said a number of measures are being taken to boost revenue, including diversifying into new sectors, expanding into “new arenas”, developing its specialist haulage operations, and boosting its warehouse portfolio.
Key events during the year included the launch of the company’s flagship warehouse in Peterborough; the opening of a second specialist distribution operation for a major UK utility pipe provider in Nottinghamshire; and the purchase of another chilled distribution facility in Spalding in September 2023.
Looking ahead, the review said: “Whilst financial performance for the year was significantly behind the previous year, two main factors affected this reduction.
“Firstly the unusually buoyant trading environment post-Covid lockdowns has now returned to normal levels, and the investments and startup costs associated with various new sites and sectors we have entered during the year have impacted on returns made within the year.
“We do however remain confident the business will continue to grow and delight its customers in the year ahead. Despite the challenges faced throughout our industry in terms of the economic outlook and well publicised business failures, we are confident we will continue to deliver a first-class, bespoke service to our customer base, and produce satisfactory returns for the business and shareholders in the long term.
The review praised the contribution of the company’s staff through the year and added: ”Our track record of consistent substantial growth over the past few years, and our sustained investment in the scale of operation, geographic coverage and network, together with the service levels our customers demand, will continue to give us the opportunity to further diversify our customer base, scale and capabilities.”
MT’s request for a comment from FreshLinc on its results has yet to receive a response.
