GXO UK Logistics saw pre-tax profit fall in 2022, despite ”strong organic growth”, thanks to costs associated with its spin-off from XPO Group in 2021.

Reporting its annual results for the main business, for the year to 31 December 2022, the company unveiled a rise in revenue to £1,776.6m, up from £1,504m in the previous year. However pre-tax profit fell to £45.9m, down from £65.5m in the same period.

In its strategic report to the results the company hailed the ”strong organic growth” of the UK business and new business wins, which it said had boosted revenue. It added that its fall in profit was mainly due to the gain of £11.5m that GXO recognised in the previous financial year relating to the negative consideration at which it settled the acquisition of the majority of Kuehne+Nagel’s contract logistics operations in the UK.

Kuehne+Nagel’s UK contract logistics operations, which generated around £500m in revenue a year in 2019, was bought by XPO in 2020, when GXO was still part of the group.

The deal added a range of logistics services to the business, including inbound and outbound distribution, reverse logistics management and inventory management.

The strategic review to GXO UK’s results added that other factors impacting on GXO UKs profit in 2022 included an increase in the royalty payments of £11.2m by GXO Group in August 2021 and a rise in corporate costs, following the group’s spin off from XPO Group in August 2021.

Looking back on the year, the company said that despite the challenges of Covid 19 ”our performance surpass that of many of our core industry competitors”.

Going forward it pedged to transform transportation and logistics with the aim of becoming ”the leading provider of cutting edge supply chain solutions to the most successful companies in the UK and to do this by using our highly integrated network of people, technology and physical assets to help our customers manage their goods most efficiently throughout their supply chains”.