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City Link's Q3 operating profit stays static due to increased use of subbies
CITY LINK HAS blamed an over-reliance on subcontractors and tough market conditions for a fiat operating profit of £1.3m during the third quarter.
The firm is in the process of restructuring its hub and trun king operations to reduce operating costs, but said the benefits from the intended savings have been delayed by the increased use of subcontractors.
Parent firm Rentokil Initial's 03 trading update says: "As a result, the business is expected to perform no better than break-even for the full year, with volumes in October remaining below the prior year."
Operating loss for the year-to-date showed a 27.7% improvement from £8.3rn in 2009 to £6m in 2010, on revenue that fell from £85.1m to 280.8m in the third quarter.
As part of its network restructuring, City Link closed and sold its Wednesbury, West Mids hub, but opened facilities in Warrington and Peterborough. It also completed the conversion of its trunking fleet from hard-sided to curtainsided vehicles, and its partially wheeled cage operation was converted to pallet cages.