Share buyback hits Deben profit rm just a 'typical
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roger. brown ra rbi.co.uk
DEBEN TRANSPORT says its decision to buy back company shares from former part-owner CEL, combined with the recession, has contributed to a fall in profit.
Pre-tax profit at the Felixstowe,Suffolk-based container haulier for the period from 1 September 2008 to 31 December 2009 fell to £84,070, compared with £542,785 in the 12 months to August 2008. However, turnover rose 19.2% to £24.8m, from £2t18m the previous period. In its financial report, the directors say they are "comfortable with the trading results for the period" given the change in ownership structure and economic environment.
In November 2008, when Wincanton acquired the bulk of the CEL Group, Deben bought its shares back from the Woodbridge, Suffolk-based container specialist.
The Deben directors' report says:"While this will have long-term benefits for the company, in the short term it has depleted both the cash resources and retained reserves. However, the company continues to have a strong cash availability, which will stand it in good stead."
Debut] is expecting "higher profit for 2010", but adds the industry has experienced "the worst recession in modern times, which has had a massive impact on world shipping and, haulage".
The firm says: "This has resulted in lower volumes and rates, and significant pressure on margins. To counter this, the company has been able to attract new business during the period and therefore maintain turnover, but not margin."