Rates knock Exel results
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by Lee Kimber • Falling haulage rates lopped Elm off Exel Logistic's £45.2m operating profit last year although turnover rose by 7% to £675.4m. But parcels subsidiary Lynx edged into profit for the first time in two years.
Parent firm NFC blames start-up costs of new contracts and lack of volume for Exel's poor performance but says margin pressure also returned last year. "We can't split out to what extent margins affected it," says NFC's investor relations manager Katie Frankel. NFC's management hopes that Exel's figures will turn round—it points to a one-off ,E1.8m reorganisation cost in one contract which was a significant factor in its losses in the 40 weeks to 8 July. It also won more business than it lost and NFC says its vehicle management services outperformed the previous year.
Better customer service, managing director David Rose says, brought express parcels carrier Lynx a 9% rise in sales to £66m. Lynx moved back into the black in April this year with a £100,000 profit in the third quarter against a Elm loss in the same period last year.
NFC refuses to speculate on whether Lynx will make a profit over the whole year—it does have two quarters of losses to make up—but Frankel says Lynx is committed to easing out unprofitable contracts in favour of those with a better return.