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The TDG: has it the magi ingredients for success:

29th March 1980, Page 28
29th March 1980
Page 28
Page 28, 29th March 1980 — The TDG: has it the magi ingredients for success:
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iE TRANSPORT Developant Group last week anunced pre-tax 1979 profits £22.2m on £248m turnover. !spite the haulage strike, th figures are up on those : 1978, and the whole story I be told in April when the 79 annual report is Aished, writes ALAN MLR.

t is a creditable result for multinational group which nages assets on four conants and in ten separate intries, and which carries excess fat at its London idquarters. Chairman ies Duncan points out with le that he is one of only 35 at the Victoria Street nises which once served as tore opulent home for the ;-defunct Prices and Ines Board.

DG operates a policy of KiMUM delegation. It is ded into 12 holding cornies, six of them responsible transport, and local men in command in each case. Les Duncan is convinced this is why operations on nland Europe, in North !rica, and Australia are so :essful.

le Australian company a traumatic beginning to fe, but hard work and delination has changed that, it is now owned 30 per , by Australian shareers.

le delegation policy means , unless you know, you Lot identify a TOG-owned , on a motorway. It has ;ht successful haulage nesses and other cons, and in most cases has barker owners in charge. !se men are often entreeurs," says James Dun"We tell them: 'Keep your ng name and livery. Don't ige your customs and tions'."

rchasing policy is left to rading company. For one TDG doesn't want its igers to come back with told you so" reply when quarters-specified lorries o come up to requires; and, equally important, if business is to be run locally, then everything has to be done to meet local requirements.

But there are some TDG traditions which are injected into subsidiaries. It prides itself in its management techniques, and places strong emphasis on good budgeting and management information. Figures fly back and forth between Victoria Street and the lower tiers of the organisation, but top levels interfere only where a company returns a poor set of results.

Bad results are analysed carefully to see why they happen. It places a high price on good staff morale, and aims to raise this as quickly as possible. Headquarters staff are on hand to provide financial advice and to deal with questions on property, but for other affairs, it believes that the greatest wealth of -knowledge lies With operating companies throughout the group.

Not that TDG is beset by bad figures. James Duncan says the group has started 1980 with great financial strength. "We came out of the 1975 recession with £12m profit. TDG will survive."

And he adds: "Our first chairman said that while you won't make as much money as possible, you should aim to end a recession in a position of greater strength 'than you enter it."

He sees signs that the haulage industry as a whole will have to heed Road Haulage Association national chairman John Silbermann's call (CM, March 15) to cut haulage fleets before increasing their rates. Customers accepted high rates last year when the haulage strike ended, but there has been more resistance this year. This, he says, is a warning for the future.

Fleet cutting worked for TDG in 1975. Its balance sheet was strengthened, and the process was completed by natural wastage and nonreplacement of vehicles. Since then, it has kept pace vi inflation and has stuck rigi4 to a policy of replacing lor1.1 on a regular basis.

This, says James Dunca works better than trying I extend lorries' lives. "That is prelude to financial suicide. only staves off the evil day < spending, say, 40 per cer more on vehicle replacemen Hauliers often lose out b doing this."

He believes that cash flow : more important than pur profits, and points out that 5 per cent of TDG's assets at appreciating ones like depot: warehouses, and cold store And TDG avoids leasing "Small hauliers lose out b: going into leasing. It tend only to drag out a situatior without raising rates." James Duncan looks foil ward to an early decision or increased lorry weights, an speaks with feeling agains environmental groups whict have caused harm to Britain't economy. Many TDG corn• panics could operate at 3E tonnes gvw overnight if Mr Fowler raises the limit.

TDG could replace its present fleets with maximum weight vehicles over a fourto five-year period, but there is no question of over exploitin an increased limit. "No on can afford a race. But th sooner heavier vehicles are in troduced, the better. Cash wil put restraints on everyone and market forces will gover their use."

But wider issues apart, TD is still in the market for well run profitable haulage an warehousing businesses at home and abroad. It is aiming for considerable growth over the next few years, and is convinced that changes in United Kingdom taxation will act to its advantage. : Care, though, is needed before taking a decision on buying a company. Too often TDG finds that the profits of a business for sale are overstated. Careful scrutiny of profit and loss accounts help reveal a true statement, and indicate whether a company is living with inflation.


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