Menzies Distribution Solutions’ pre-tax profit plunged 82% to £1.36m in 2025, despite revenue falling by just 2.2%, as lower volumes, higher employment costs, restructuring and the full-year cost of operating as a standalone business hit the logistics group.
Revenue for the 52 weeks to 27 December 2025 was £221.6m, down from £226.6m in the previous 52-week period.
Pre-tax profit fell from £7.393m to £1.356m, while operating profit dropped 70.7% from £7.873m to £2.307m. Adjusted EBITDA almost halved from £11.738m to £5.909m.
MDS said the results reflected economic difficulties and lower volumes across the majority of its customer base, alongside inflationary pressures and higher employment costs following changes to Employers’ National Insurance.
The company also reshaped its operating base during the year, including right-sizing its fleet and overheads and rationalising its property network.
It exited long-term leases on 145,479sq ft of space in Bury and Worcestershire, while opening a 143,155sq ft dedicated warehouse in Daventry for a key customer. The accounts said the property rationalisation resulted in disruption and relocation costs.
Restructuring costs totalled £1.130m in 2025, compared with £91,000 in 2024. Total exceptional items were £1.043m, compared with £1.274m the previous year, after a £101,000 credit relating to merger and acquisition costs.
MDS chief executive Richard Morson said: “2025 was a challenging year, reflecting lower volumes, employment costs and the full-year costs associated with operating as a standalone business. We deliberately reshaped our property, fleet and cost base during the year, while maintaining revenue close to the previous year’s level.
“This was also our safest year to date, and we are pleased to have been recognised with the Safety in Operation award at the 2026 Motor Transport Awards.
“We have started 2026 with positive momentum. Turnover is 5% ahead year to date compared with the same period in 2025, with core transport volumes up and demand for warehousing increasing. We have also secured major new food and retail business worth several million pounds.
“We remain focused on delivering for our customers and building on the progress made during 2025.”
The accounts also show a significant change in MDS’s financing position during 2025, following its demerger from InPost in October 2024.
A receivables finance agreement began on 28 March 2025, with £9.790m outstanding at the year end. The agreement has a minimum three-year term and is secured against trade debtors, with MDS paying a margin of 1.25 percentage points above the variable interest rate.
Total current loans and borrowings increased from £492,000 to £9.973m during the year, while finance costs rose from £480,000 to £951,000, including £281,000 relating to receivables financing.
Cash at the year end fell from £3.996m to £163,000. However, MDS said it had “considerable liquidity headroom”, while net assets increased from £34.586m to £35.380m.
The company said warehouse occupancy was expected to grow from 2025 levels, with significant growth also anticipated in retail and consumer transport.
