rcels war ver fiercer
Page 40
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FIERCE competition in it years in the parcels
-less shows no sign of nishing. It has had much to ith the aggressive
Rting policies of TNT (still ively a newcomer to in) of which the UK's tional parcels carriers are fully aware.
/al concerns will, therefore, Dubt rub their hands in glee !ar that in its last financial (to June 30) TNT's
ralian parent, Thomas Dnwide Transport Ltd, rted a halving of profits in from the 1981/82 level of -n Australian dollars to 3m) largely because of 'y losses on overseas
ations.
st in case the smiles of a few s start to get too broad, I Ild add that these losses did :ome from the British ation — the reverse in fact r according to the TNT rt, operations in Britain ributed steady earnings substantial increases in the me of business and flue.
e main losses appear to stemmed from the panys' American interests. although one of its panys, Pilot Freight Carriers, rted increased freight fing volumes, Trans Freight mother subsidiary, rded a loss for the year wing falls in both goods fled and revenue.
:sults followed the nward trend in Canada in of increase both in freight ed and revenue.
New Zealand, the company rded a loss for the first time a 1964 although volume of iht handled was the same. On TNT's home ground in Australia, although the group had a trading profit and tonnage handled was higher, smaller margins meant considerably lower earnings.
The group as a whole lifted its revenue by no less than 17.4 per cent to 1,534m Australian dollars from 1,307m the year before so it is:by no means all bad news for the company.
The parcels carrying business is not without incident in other directions at the moment. The announcement that Carryfast had been the subject of a management buyout came as something of a surprise to the industry.
Management buyouts usually occur when a company is not doing too well but the management at grass-roots level see good prospects by operating from a smaller base. This doesn't seem to be the case with Carryfast for the company says it is on target this year for a record turnover. Indicating that this Ellm nationwide express parcels carrier had reached, in principle, agreement with its parent, the SPD Group, on a management buyout, the company points to the organisations behind the move. But bare details only are given. All that is said is that the arrangement has the financial backing of a number of financial institutions, including ICFC.
The initials ICFC stand for the Industrial and Commercial Finance Corporation, a company well-known to readers of this column. It defines itself as "a private enterprise source of long term risk finance and advice for small and medium sized businesses in the UK. It is a subsidiary of Finance for Industry which is 85 per cent owned by the English and Scottish clearing banks and 15 per cent by the Bank of England."
ICFC specialises in financing ventures of this kind; its record on management buyouts is a strong one. As indicated, competition in the industry has never been tougher but naturally the new Carryfast management is optimistic. This is reflected in the comment of the new chairman and managing director of Carryfast, Martyn Old royd, who heads the buyout consortium. He has described the move as the beginning of a new and exciting era in the company's history. Let's hope he's right.
But why has SPD agreed to hive off Carryfast? SPD Group managing director, John Harvey, says the transfer will allow the SPD Group to concentrate efforts and investment on its warehousing. distribution and specialist operations.
In the statement announcing the deal he adds: "We would not have considered this proposal unless we had been satisfied that the Carryfast management consortium had a carefully prepared business plan and financial backing. We are happy that this is the case and we now wish Carryfast and all its staff every possible success for the future."
In operating its parcels business Carryfast has followed the route of specialisation, particularly operating nominated carrier schemes for the retail, wholesale and mail order trades, although it sees an equally promising future in its general parcels traffic.
I hope that when the National Freight Consortium's first annual report appears there will be some indication of how Roadline and National Carriers are getting along. There is no sign of their current financial progress in the latest financial statement of the NFC, which must surely give a fillip to the staff of that organisation.
The Consortium has announced a fourth interim dividend of 2.5p net per share on the company's £1 A and B ordinary shares; a welcome early Christmas present for the staff who are shareholders. Generally results (unaudited) of the Consortium for the 48 weeks of trading to September 3 show a trading profit of £14m, a profit of £19.3m before interest and £8.5m after interest and tax on a total turnover of £520m.
Once again property profits figure prominently amounting to £9.9m "resulting from the disposal of surplus operational properties thrown up by rationalisation."
"However," the Consortium adds — and this is an interesting point to note — "property investment continues at a high level and is planned to exceed property sales over this year and next." Profit from trading contributed £14m.
The fact that the Consortium has shed a lot of staff in its 48 weeks is revealed, however, in the redundancy costs and exceptional items which amounted to £4.6m. That left a cumulative profit of £19.3m for the 48 weeks before interest, which was a hefty £10.1m, leaving profit after interest and advance corporation tax of £8.5m.
So what will the results be for the full year to October 1? The NFC says that September is traditionally a good trading month and "the directors are confident that there will be satisfactory outcome for the year." Let's hope it is as good as they hope — certainly it is deserved.