TDG profit confidence
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• Transport Development Group directors this week cautiously welcomed "buoyant" half-year results which show a £20.4 million pre-tax profit, despite the adverse impact of the seamen's strike.
UK operations made £16.78 million up from £14.55 million in the same period last year. A small drop for its overseas divisions is blamed on a decline in cold-storage business and the effect of the Channel strike in Europe. Its main US company, Willig, found "conditions hard", but Australian operations doubled their profits to 21.04 million.
Fortunes are mixed in the UK. Transport performed well, upping profit from £5.47 million to £6.2 million. Other services, like plant-hire, doubled profit to £4.75 million, but storage slumped from £6.66 million to £5.83 million, partly due to diminishing EEC intervention stocks.
Managing director James Lockhart says there has been a substantial increase in distribution and contract haulage. Tankers and parcels had "held their own", not showing any significant growth over the half-year. Many of the smaller, regional businesses, however, had performed well.
TDG's two main 1988 acquisitions came too late to affect the results. The Willett group in Chicago was bought in June for $6 million (about £3.5 million), and runs trucking and distribution services in Chicago and between states. In July TDG bought a majority stake in chemical and petroleum tanker haulier Innocenti Freres in Avignon, France.
Lockhart says the group plans to expand its interests in Spain, Portugal, France and Holland and is looking to break into Germany. Tax drawbacks, which had deterred it before, will change, he says. TDG was not seeking to set up a "panEuropean network under the same name", but to develop greater co-ordination between subsidiary companies.
Chairman Sir James Duncan says competition in Europe has heightened, but the results give the group more confidence about facing the Europeans, particularly the Germans.
The group is reticent about predicting its performance in the next six months or saying what acquisitions it might make, but says it is looking at several key areas, like chilled distribution.