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Blue-chip logistics companies report contract wins and rising profits

10th August 2006, Page 22
10th August 2006
Page 22
Page 22, 10th August 2006 — Blue-chip logistics companies report contract wins and rising profits
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The past month has brought good news from major players suci as Business Post and Wncanton with strong finandal results and new contacts.

Business Post, the UK mail and parcel delivery company, says first-quarter trading was satisfactory and in line with the board's expectations, with parcels services continuing to make progress following the difficulties experienced in 2005.

Progress has also been made in improving the performance of its franchise network: two more loss-making franchises have been brought back into corporate ownership. Meanwhile the company's UK mail division has continued to demonstrate strong growth, handling 70 million mail items in June alone.

Within logistics, TDG was upbeat in its results for the first half of 2006. Although underlying prof its fell 20%, an improvement in performance is expected in the remainder of the year as new contracts begin to feed into the company's top-line.

While sales were flat at £253.7m, the company says its headline profit was affected by retail contract terminations in 2005 and the "phasing of new business implementations". Looking ahead, the company says business development has been encouraging: it predicts net contract wins for the full year will be significantly better than last year.

Indeed, recent UK contract announcements also seem to point to a healthy market environment for logistics companies. Wincanton extended its involvement with Argos by winning a contract to manage inbound container movements from the port of Felixstowe.

The three-year contract is based on the provision of container storage at the new Alconbury terminal. This is the first of its kind for Wincanton in the UK: it will incorporate specialist software which will enable stock to be accurately monitored while helping to control costs.

Christian Salvesen won a five-year contract with Inter Link Foods worth about NOm. The food manufacturer, based in Blackburn, makes a range of cakes for the retail own-label sector. It also produces Screen-branded fruitloaf products and is the UK's largest producer of mince pies, fairy cakes and decorated buns. The contract also involves transporting 1,000 pallets of raw materials directly to some of the Inter Link bakeries.

Coming on the back of a solid set of 2005 results, the reports over the past month have shown that companies in the logistics sector are continuing to remain positive over both the outlook for the industry and their own financial results.

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Locations: Blackburn

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