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Exel profits attract bees to the honeypot
Page 18
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Exel, the UK's biggest logistics company, has boosted its first-half profits — but it's playing down rumours of a fresh takeover bid. David Harris reports.
LOGISTICS GIANT Exel boosted its turnover by 45% to £3.6bn in the first half of 2005 compared with the same period last year; profits rose 42% to £81.8m.
One of the main reasons for the increase was the £328m acquisition of Tibbett & Britten — but even taking this out of the equation, Exel managed like-for-like hikes in turnover and profit of 11% and 9% respectively.
Share dividends rose 18% to 10p and its shares continued their climb, rising 17.5p on the day the results were revealed to 944.5p.
The shares have been on the up for some time — they were below 700p a year ago, not least because of persistent takeover rumours. However, these continue to be played down by Exel executives, who say out that if there had been a serious approach they would have issued a statement.
Nevertheless the City continues to respond to possible bids by pushing up the price of the shares. Last week Deutsche Post reiterating its desire to expand abroad; Exel was identified by analysts as a possible target. Swiss logistics firm Kuehne & Nagel has also been linked with takeover rumours.
The rise in Exel's share price has inevitably forced up the price any potential bidder would have to pay for the company — pundits suggest that to be sure of success a bidder would now have to offer more than I per share. Exel chief executive John Allan says he is pleased with the way Tibbett & Britten has been integrated into Exel; this has involved closing seven sites in Europe.
In addition to buying T&B last year Exel bought the US-based firm Power Packaging and Japan's Fujitsu Logistics — and sold Cory Environmental for £200m.
Allan says the Cory sale will "bring to an end the disposal of non-supply chain businesses".