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The battleground moves east
Page 21
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The last financial figures from Wincanton and TDG indicate that competition is as tough as ever as they look across the Channel.
Wincanton has forecast that full year results will be "in line with expectations". Latest analyst estimates for the 2005/6 fiscal-year prof Is are around e33m, which would be a slight year-on-year decrease. Wincanton commented that although Is markets remain "highly competitive" its "development pipeline" continued to be encouraging.
The integration of French company Premium Logistics, which was bought towards the end of last year, is also said to be going well. This is important for Wincanton, as it WV help improve its revenue from the Continent and will reduce the company's over-exposure to the domestic UK market, which currently accounts for two-thirds of its turnover.
Another company heavily reliant on the UK market, TDG. has also announced its results, posting a 2005 profit before tax figure of £8.1m a year-on-year increase of just under 10%. Most of its business units stabilised their revenues and prof its at 2004 levels; the largest improvement came In Ireland.
However, market conditions in the Netherlands remain particularly difficult, with a second successive loss of Et 3m recorded. And while new contract wins were up by 18% in value terms, net wins of £20m were "significantly lower than normal".
In an attempt to combat this, TDG recently snapped up Mond, a chemicals logistics business based in Belgium. The company's core market is packed speciality chemicals, with customers including BASF and Bayer. The acquisition will certainly enhance TDG's ability to transport and store chemicals for clients across the Benelux countries, the Ruhr and northern France, as well as giving 'it enhanced access to economies in Central and Eastern Europe.
This is a small but important strategic step for TDG increasing its access to Eastern Europe will be an important factor as more companies relocate their factories there to take advantage of lower labour costs.
However, with Wincanton and other major players in the logistics sector also looking towards this region, the ultra-competitive market that we are all too familiar with In Western Europe may soon be replicated further eastwards.