Meachers Global Logistics sees profits fall amid “challenging” trading conditions

The company, which was founded in 1958 and is a Palletways member, provides UK transport and distribution, freight forwarding and warehousing services.

The business operates from its Southampton headquarters and a depot in Derby and boasts more than 400,000 sq ft of racked and un-racked storage space.

According to its recently published annual results, the family-owned logistics operator recorded a 6.5% revenue fall to £39.6m, down from £42.4m in the previous financial year, with pre-tax profit tumbling from £3.4m to £2.4m during the period.

Despite the fall in pre-tax profit, the company remained upbeat in its strategic report to the results.

The report stated: “The directors are pleased with the performance of the company over the last 12 months, amidst extremely challenging trading conditions experienced by all divisions within the business.”

It added: “The directors continued their policy of reinvesting in the business with the company’s total net worth rising from £16.1m to £16.7m.”

During the year Meachers Global Logistics invested in its fleet, warehouse equipment and property portfolio, with £1.6m spent on new assets.

The investment largely funded new vehicles and trailers, while more than 65% of its materials handling equipment (MHE) fleet was replaced with new machinery.

The business also secured a significant new leasehold facility on a long-term arrangement and renewed a further five long-term leases on key commercial properties during the year, the report revealed.

Looking ahead, the directors said they remained confident about the company’s prospects, with opportunities for organic growth and acquisitions under consideration “if suitable opportunities arise.”

The report added: “The significant investment in vehicles and MHE coupled with the long-term commitment in the facilities will help to provide the strong foundation needed for the continued advancement of the business.”

However, it added that the directors remain cautious in the face of the “current economic climate and growth and productivity projections”, which the report said may impact future profitability.

Outlining the challenges ahead, the report said: “The main concerns particularly centre around increasing costs in most areas of the business. 

“Premises costs have increased significantly in the last 12 months with the majority of the company’s leases renewed in the period and significant rises in business rates experienced.”

It also cited continuing wage pressures for HGV drivers, changes to employment legislation, which the company said had “significantly” increased the corporate tax burden, and costs relating to “the drive towards net zero” as key factors.

Meachers said its long-term strategy remained focused on strengthening its financial position and cash reserves while continuing to reinvest in people and equipment.