TDG detects upturn
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'INE FIRST signs of a recovery in the fortunes of British road haulage have been detected by the Transport Development Group in results which show its pre-tax profits up by 23.3 per cent last year.
TDG, which owns 53 British transport and storage companies as well as having plant hire, reinforcement and exhibitions interests and overseas transport subsidiaries, made a 1:29.7 million pre-tax profit last year, compared with i:24.1 million in 1984.
Its UK operations increased profit from 09.4 million in 1984 on 1:249.2 million turnover to 1:23.6 million last year on 1:275.4 million turnover.
Within that, British Road haulage companies increased their performance from 1:5.1 million on 1:135.3 million turnover to 1:8.3 million on 1:153.3 million turnover.
The 1985 profit figure allows for a 121.21 million (1984: t:I.95 million) loss incurred in establishing Independent Express, the express freight business set up by former lpec executives and now 95 per cent owned by TI )G.
According to TDG chairman Sir James Duncan, Independent is now a "very tine business" upon which 1:1 million is being spent developing a central hub depot. It began to move into profit towards the end of last year and is expected to break even this year.
Independent is one of the few TDG companies which requires a national identity and it is doubling its promotions budget in the first half of this year.
Setting the Independent costs aside. Duncan sees the first signs of post-recession recovery in the haulage companies' performance. From making profit margins of between five and five-and-a-half per cent in the first half, they climbed to eight per cent.
"That brings us much more in line with the sort of return which road haulage can give. Sonic of us remember when the return was 10 per cent," Duncan said this week.
Although a fall in dery prices — from 34.5p per litre in March last year to 26p this month — has helped, 'FIX; says the main improvement has come from greater productivity. It expects to be able to sub-contract some of its less attractive work as recovery takes it closer to its goal TDG's managing director, Jim Lockhart, predicts a further swing away from general haulage to contract distribution. "Many more inquiries are out for major slugs of traffic from own-account to people like ourselves. We see that growing more, and are no longer trying to compete with the small family haulier."
Overseas operations contributed 38 per cent of TDG's profits. In Europe — it operates mainly in France and the Netherlands — profit is up from 127.1 million on 06.9 million turnover to 17.7 million on 1:93 million turnover.
Although Australian results were 30 per cent ahead, currency exchanges led to a fall from 1:2.7 million on 1:28.2 million turnover to 124 million profit on 03.4 million turnover.
The two United States subsidiaries, Willig Freight Lines and Market Transport, both report an end to discounting as some of their major competitors have collapsed, and have increased their profit from £2.3 million on 1:80.3 million turnover to 1:4.5 million on 1:89.6 million turnover.
TDG is interested in expanding in America, according to Duncan. "Given the right opportunity and the right business, we will buy, but we want one at a sensible price."
Compared with five years ago, he is also optimistic about growth prospects at home.