Palletways increased turnover by 4% last year, due to more members joining the network, but it warned that Covid-19 is expected to have an impact on its financial performance.

Latest results for Palletways (UK) showed that in the year ending 30 June 2019, revenues for the pallet network grew to £197.9m, up from £190m the year before.

Pre-tax profit fell by 18.8% to £14.9m and earnings before interest, tax and amortisation reduced by 23% to £13.6m, “reflecting the cost challenges of maintaining a high quality of service for its members and customers in a highly competitive market,” it said.

The company said any impact from Brexit was difficult to quantify, “due to the inherent uncertainties on the impact of the domestic and international trade and the future rules and tariffs on goods moving to and from the UK.

“The business has invested significant resources in preparing for any outcome by ensuring its IT system and processes can cope with the new regulatory requirements as efficiently and possible,” it added in its business review.

However, Palletways added: “The Covid-19 pandemic is expected to negatively impact the company’s financial performance.

“The short-term reduction in demand and revenue is a direct economic consequence of the UK government’s measures, which have included the temporary closure of non-essential businesses and social distancing, as direct customers and those of the membership network have adapted or temporarily suspended their business operations.

“The negative financial consequence of the temporary decline in revenue will be mitigated by the support provided by the UK government to UK businesses and the actions taken by the directors to manage costs and contracts appropriately to maintain cash reserves.”