Despite rising revenue, Pallet-Track saw pre-tax profit fall in 2023 as volumes returned to “more normalised” levels post-Covid and network members continued to battle economic uncertainty and cost pressures, according to the company’s latest annual results.
For the year to 31 December 2023, the Wolverhampton-based pallet network revealed that despite a jump in turnover to £138.3m (2022: £131.5m) in the year, pre-tax profit slumped by a third to £3.5m (2022: £4.7m).
Hub revenue grew in the period by 15% to £25.5m (2022: £22.2m), largely powered by an increase in hub fees, according to Pallet-Track’s strategic review of the results.
Network delivery revenue also increased by 3.2% to £112.9m (2022: £109.3m).
Gross profit margin relating to hub activity dropped in the period from 61.2% to 58.4% in 2023 which the company attributed to the increasing cost of operations.
The strategic review said the company had introduced a number of cost-down initiatives during Q4 2023 and at the same time agreed a “multi-million pound” investment in its IT and operational infrastructure, which is being implemented this year.
The review also noted that “continued economic uncertainty, alongside increasing pressure on costs continues to impact the business and its members”.
However it added that the directors are “confident sales levels and cost levels will remain strong” going forward”.
Commenting on the results, Pallet-Track chief executive Stuart Godman said: “The 2023 financial results for Pallet-Track Limited, of £138.3m turnover and EBITDA of £4.95m was a satisfactory result during a year of economic uncertainty driven by increasing pressure on costs.
“Overall revenues grew by 5.1% which is pleasing and coupled with a healthy balance sheet, and good cash management, the board have agreed to a multi-million-pound investment in its IT and operational infrastructure which will be rolled out in 2024.”
