A weak pound combined with rising demand for cheap Chinese trucks in Commonwealth markets has hit profit at international haulier and truck sales firm EM Rogers.
Reporting its results for the year to 31 January 2017 the Northampton-based firm revealed that while turnover increased from £18.5m to £18.8m in the year to 31 January 2017, pre-tax profit fell from £2m to £1.7m in the same period.
MD David Rogers told MT the family firm, which he runs with his brother John, had suffered from the falling value of sterling following the EU referendum in June last year.
”We buy our fuel in Europe, and with the pound dwindling since the Brexit vote, on current exchange rates it is costing us around £40,000 a month more – that’s more than £500,000 a year we are losing just on the exchange rate,” he said.
Rogers said the trend in Commonwealth markets to buy Chinese trucks had also hit the company’s truck sales division. “China is producing copy trucks at a third of the price of the genuine product, and these have become popular in Commonwealth countries, which is really knocking the second-hand truck market.
"We would sell 700 to 800 trucks a year in these markets, but that has halved over the past three or four years.”
Rogers also raised concern at the prospect of customs controls post-Brexit, and questioned whether international hauliers will be able to claim back VAT from the EU once Britain leaves.
Despite these headwinds, Rogers said he remained upbeat about the company’s future. “The business is going well. We are really busy and our margins are OK, so I am as confident as I can be, considering Brexit. But like everyone else right now we are shooting in the dark because we don’t yet know what Brexit will bring,” he said.
Rogers added that the firm’s Dutch subsidiary may play a more significant role after Britain leaves the EU. “We have an office in Holland, a hub in Europe and 20 trucks registered in Holland. Depending on which form Brexit takes, that might become a valuable asset to us,” he said.