DHL Supply Chain continued to improve its profitability in the UK, with pre-tax profit up 18% year-on-year in the most recent set of results filed at Companies House, despite a turnover drop resulting from the renewal of its NHS Supply Chain contract.

For the year ended 31 December 2015 turnover at DHL Supply Chain fell to £4bn, from £4.13bn in the previous year, while pre-tax profit rose to £108.1m, from £91.7m in 2014.

DHL said that the balance sheet fall in turnover was wholly attributable to the new terms that arose as part of the three-year renewal of its NHS Supply Chain contract – which started in October 2015.

DHL now acts as an agent, not a principal, for the NHS and the turnover and costs of purchases and sales relating to the contract are now no longer reflected in its results – only the management fee is recognised.

It said this change had had a significant impact on turnover and costs from the start of the contract, but no impact on profit.

Taking into account these changes DHL said that the underlying business performance was “robust” with new business and renewals off-setting the effect of any lost business – resulting in underlying turnover growth of 9%. For example, it won a deal to provide a next day delivery service for Saab parts supplier Orio UK in August 2015.



Tradeteam has introuced a new livery to celebrate its 20th year in business

In its sister business Tradeteam's turnover dropped from £131.6m to £118m in the year-ending 31 December 2015.

Pre-tax profit also dropped, from £5.6m to £2.7m However, Tradeteam said that several contracts had been renewed with DHL Supply Chain – resulting in the drop in turnover and profit.

Tradeteam – which has changed its livery from its traditional red and yellow, to a red and black design, to mark its 20th anniversary this year – said the UK drinks market remained “highly competitive” and continued to feel the effects of the continued decline of the on-trade market.

It added that operational efficiency initiatives had been “delivered successfully in 2015” and had allowed Tradeteam to adapt to changes in the market.