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Safeway purchase hits Butt's profits
Page 9
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NORTH AMPTON OPERATOR C Butt suffered the consequences of Niorrisons' takeover of Safeway to turn in a pre-tax profit of only 15,500 last year.
MD Clive Hodgkinson reports that the supermarket chain inherited Safeway's RDCs and shifted much of its produce to these southern sites, starving Butt of work for its depots at Middlewich, Cheshire and Wakefield, West Yorks.
The company was forced into a strategic review that resulted in the closure of its general haulage operations at these two sites.
For the financial year ending 30 April 2006 Butt's turnover fell by £1.7m from the previous year and its pre-tax profits dropped £40,000. However, Hodgkinson says it has already won enough contracts to replace its lost northern business; he expects turnover in the next set of accounts to be as high as £35m.
It was a challenging year," he admits. "As [Morrisons] bought out Safeway it inherited RDes in the south of the country. We've actually benefited in the South because of that,but we lost day and night [operations] in Middlewich and Wakefield, Hodgkinson reports that the firm has replaced all its general haulage operations and sees itself now as a logistics business -a move it always intended to make. "For any company in general haulage and spot hire, unless you can work those vehicles on two shif is, six days of the week and pick up the right rates, it's a very rough end to be in," he points out. "III other answer is having large flee. on one-way routes and you have t obtain high percentages of bac loads to make it work."