TNT Express said it does not expect to see the full benefit of its profit improvement strategy until 2018-19, as it admits it did not acheive the turnover and profitability it expected in 2014.

It anticipates that adverse trading conditions in Western Europe will continue and believes that 2015 will be "a year of transition", the operator said in its 2014 annual results statement this week.

The express parcel carrier began implementing its ‘Outlook’ strategy, which it hopes will improve turnover and profitability, last year. The strategy includes plans to open 15 new or upgraded hubs, put more direct international routes in place, invest more in automation, and reduce its IT spend.

Chief executive Tex Gunning said the building blocks of the strategy have now been put in place, but resulted in significant restructuring costs last year.  It posted a €53m (£39m) operating loss for the year ended 31 December 2014, while turnover was flat at €1.7bn.

“In 2014, we did not yet realise quality revenue growth and profitability,” conceded Gunning. “We are still in a stage of improving the quality of our revenue base and winning back customers that were lost over the last few years. With service quality improving in our unique European road network and competitive air network, we should be able to reverse any negative trends and achieve profitable growth.”

TNT said turnover was affected by pricing pressure and lower revenue from international business in the UK and France.

It has also unveiled plans for a £15.5m ‘super-depot’ in Swindon, which it expects will reduce trunking distance by 690,000 miles and CO2 emissions by 815,000kg a year. The 10-acre site will be located on the South Marston Industrial Estate, and will have over 100 loading bays.

The site will be used to pre-sort parcels before they are delivered to its sorting hubs in the Midlands.

Simon Harper, director of operations at TNT UK, said: “Coupled with TNT’s £35m investment in its fleet of vehicles, the new Swindon sortation centre will enable us to cut delivery times as well as relieving some of the burden on our depots that serve areas around Exeter, Bodmin, Bristol, Reading, Slough, Southampton and Byfleet.”

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