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Tuffnells blames buyout for profits dip
Page 18
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MANAGEMENT AT Tuffnells Parcels Express are linking a 5% fall in pre-tax profits to their second
buyout of the company in 10 years.
The fall to £3.97m in the year to December 2005 occurred despite an increase in turnover from
£75.7m in 2004 to 7 8 . 2 m and an expansion
of the workforce by nearly a quarter.
Tuffnells financial controller Ian Brewer says the completion of the £33m management buyout in May 2005, following eight months of negotiations, provides the main explanation.
"The people involved are focused on the buyout rather than the business so the business tends to dip a bit," says Brewer.
He says a similar fall occurred when the Sheffield-based company was bought out from TDG in 1996. The second buyout was necessary because the venture
capitalists funding the original one were replaced by the Bank of Scotland.
This year's figures are likely to be considerably better than 2005's, says Brewer. "I would certainly hope to beat the 2004 profit — which in itself was a record for the company.
"We believe that the service you provide to customers is the key thing," he adds. "If you provide that, then the customer is more than happy to stay with you — as long as the price is reasonable."