NFC retains optimism
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• NFC's £39.5m half-year pretax profits show no improvement from the same period last year. Chairman James Watson says: "There has been no significant increase in business volumes". But he detects a growing feeling of confidence among the company's customers and believes NFC is on target for fullyear profits of £90-100m on an expected worldwide turnover of £1.6-1.8bn.
Last year it achieved £93.7m (GM 3-8 January).
NFC has been cutting costs and looking for economies everywhere throughout the six months to April, according to chief executive Jack Mather.
Some of the cuts have included a continuing reduction in the NFC workforce — down from 34,797 in 1990 to 33,066.
More jobs will go, says Watson, but he believes the worst of the redundancies are over — 3,000 jobs have been shed in three years. Growth in Exel Logistics, leading to new jobs, has tended to disguise the size of cuts in the Transport Division, adds Mather.
The fleet has slimmed to 15,435 from 15,572 last year although this will soon be boosted by a 650-vehicle order for BRS Truck Rental.
The group has continued to "spread the risk" by small acquisitions outside the UK — notably in the US and France — spending £28m in the half year. A new Reckitt & Colman distribution centre has opened in America.
Mather says the emphasis is on overseas growth: "In this half year 35% of operating profit came from overseas, compared with 28% for the whole of last year." A futher American acquisition and "one or two in Europe" are expected.
Exel Logistics performed strongly in the first half with operating profits up 15% to £22.4-m and turnover up 21% on the same period last year, boosted by a i,10m hanging garment contract for BhS.
BRS is closing its town-centre depots at Derby and Burton and merging them into a £6m purpose-built site at Stretton Business Park. The workforce will increase to 160 from 125 to cope with increased business and the old sites will be sold by NFC's property arm, Hyperion.