Palletforce saw profit fall by a fifth in 2023, latest annual results reveal

Palletforce’s recently published financial results, for the year to 31 December 2023, reveal turnover rising to £149.9m in 2023 (2022: £142.8m), which the network attributed to increased average selling prices, both through the hub fees and the inter depot tariff (IDT).

However pre-tax profit fell 19.7% to £5.3m in the period (2022: £6.6m), with volume falling by 1.5%, and operating costs rising, in part thanks to a five-year rent review by the landlord at the network’s Super Hub in Burton.

In its business review of the results, Palletforce pointed to a challenging market which saw falling demand “across the board” in the second half of 2022 and throughout 2023, as high inventory levels and reduced consumer confidence hit customer volumes for both full truck load and less than truck load (LTL) road shipments.

The review said a key development during the year was the full integration of its December 2022 acquisition of Dobbs Logistics in St Leonards into Palletforce’s owned depot network.

The year also saw the transfer of the Newbury depot, previously operated by EV Cargo Solutions, to UK Freight Masters, which Palletforce acquired from TTT Logistics on the 23 June 2023.

Since UK Freight Masters was already an operator of the existing owned depot at Erith, the move created a network of three owned depots in the strategic London and South East region.

In his chief executive’s statement to the results, Mark Tapper praised Palletforce for delivering “another solid financial performance in 2023, despite the ongoing challenges from the UK economy, specifically a combination of high inflation impacting on operating costs and soft demand impacting upon volumes.”

He also pointed to a “healthy” growth in membership during the year “bringing both additional input volume to the network, as well as stronger and deeper delivery coverage”.

Tapper said the network grew its market share “in spite of the overall slowdown in the sector”, an achievement he attributed to Palletforce’s operating model, management team, infrastructure, technology and investment in innovation.

Looking ahead, Tapper said: “The future looks bright for the UK pallet network sector in which Palletforce operates.

“Economic uncertainty, increasing logistics cost, reducing order sizes, expanding regulation, the impact of climate change policies and a general shortage of quality logistics businesses are all reasons why the pallet network sector will flourish going forward.

“Pallet networks are a resilient and scalable model providing an alternative and sustainable delivery platform that is well placed to mitigate the effects of these industry issues and trends.

“Within this positive market environment, Palletforce will continue to deliver its strategy of controlled and sustainable quality growth through operational innovation, investment in technology, leveraging its position within EV Cargo and most importantly, by doing the basics brilliantly and with relentless consistency, serving our members and their customers every day.”