A growing customer base and increased network capacity drove growth at Tuffnells in the year to 31 August 2016 results, underpinning a successful performance for owner Connect Group.
The parcel firm, which specialises in irregular dimensions and weights, saw turnover increase 7.3% year-on-year, from £162.6m to £174.4m.
Its operating profit for the same period grew 4.9% to £15m (2015: £14.3m), though the company’s profit margin would have been even higher if not for investment in infrastructure.
This saw the company open new depots in Leicester and Norwich during the year, with plans for a further £15m on its estate during the 2017 financial year.
Tuffnells said its customer base grew by 11% during the year, including a five-year contract win with tyre distributor Blackcircles.com. The company said it is its biggest single contract win to date.
The growth in its customer base was “helped by a number of other parcel carriers de-prioritising” irregular dimensions and weights work.
Tuffnells MD Chris Ward (pictured) told Motortransport.co.uk that it had grown at the expense of rival TNT, which in its most recent results showed the company made a loss of £22m.
Ward said: “The competitor we win the most business from is TNT. Their customers come from TNT to us because SMEs don’t like their long length charges and centralised call centres.”
He added that Tuffnells’ strong performance was propping up the wider Connect Group.
“The fact is that without Tuffnells, Connect Group is in trouble,” he told Motortransport.co.uk. “The group only has two growth plays – us and Pass My Parcel. So there is a lot of pressure on Tuffnells do another 10% on revenue and 12% on profit this year, on top of a good year last year. I think we’ll do it, as we’ve had a cracking start to the year.”
Connect Group chief executive Mark Cashmore said: “Tuffnells has delivered another strong performance, underpinning solid financial results for the group.”
Connect Group recorded turnover of £1.9bn for the year; an increase of 1.7% on the previous year's £1.8bn. However its pre-tax profit jumped 44.5% to £41.9m (2015: £29m).
