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NFC's 'hard slog'
Page 34
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to a £1.2m profit in 1972
Record year for Contracts company, a good result by BRS Parcels but NCL loss exceeds budget and Freightliners slide back into loss
by CM reporter • IF the National Freight Corporation had shareholders they would have received a 7 per cent dividend for the year ended December 31 1972, leaving £1.2m profit retained in the company. That is the essence of the results contained in the annual report published on Wednesday.
The Corporation made a consolidated profit of £5m and had to pay £7.5m to the Treasury as interest on capital; but there was a £3.9m revenue from "extraordinary items" — mainly property sales. After other adjustments the final figure came out at a £1.2m profit, which was a £2.8m improvement on the comparable figure for 1971, and the first net profit declared by the NFC in its four years' existence.
It was a "gruelling" year, says the report, and while NFC is "increasingly contemptuous" of the practice of blaming outside influences, these played a big part in the 1972 results. While NFC had minimal labour troubles in the year, external labour disruptions are estimated to have cost £3m to £4m in lost profits. But in a difficult year, the generation of funds exceeded cash requirements, and it was possible to repay the outstanding £7.4m loan from the staff pension funds.
The Corporation's report also includes an outspoken attack on the denigrators of road transport, " . . a crescendo of shrill, and mainly ill-conceived if understandable, criticism of the road haulage industry . ." The NFC rejects the suggestion that the lorry's shortcomings will kill it and cause a switch to alternative transport. The report devotes considerable space to demonstrating the overwhelming importance of road transport.
Mixed results The best results among the operating companies came from BRS Parcels Ltd, with a £3.10m profit, and from BRS (Contracts) Ltd; the haulage companies had a mixed year, there was some recovery in the bulk liquids and removals fields but NCL was disappointing and Freightliners went from a 19'71 profit of £100,C00 to a £490,000 loss.
In brief, this is how the operating groups fared in l972
BRS Ltd and subsidiaries: Still trading as a group in 1972, with 9300 vehicles and 11,300 staff, earnings were down from £55.9m to £.55.2m and profits from £2.3m to £2.0m. BRS (Contracts) Ltd had its best-ever year but its good surplus (unspecified) was offset by roar results in general haulage where price levels were depressed. Results confirmed the NFC view that general haulage is unrewarding and that "contracted service and the package deal" are the answer. (Between 50 and 60 per cent of BRS companies' traffic is still general haulage.) Freightliners Ltd: Receipts were up by £4m but the result was a £0.49m loss, of which the NFC's 51 per cent share was £0.25m. The company increased its market share and improved the balance of traffic but margins were squeezed (especially on c. and d. work) and BR reduced its discounts on train haul, which cost Freightliners an extra £400,000.
Future prospects are "reasonable". A swop-body container has been designed as part of a "cautious re-entry" into the direct distribution of goods to retailers. Other haulage and container companies: Gross receipts down by 6 per cent and profits by £370.000 to £150,000, reflecting sluggish economic conditions for the Tayforth Group and Containerway to work in. Lawther and Harvey did well despite working from temporary premises (its own were destroyed by fire) in Belfast.
Star Bodies (BRS) Ltd made 407 freight bodies.
BRS Parcels Ltd and subsidiaries: Elimination of some depots, reduction of transhipment, more aggressive pricing and more skilful marketing-are named as contributors to good results by BRS Parcels, which made £3.1.0m surplus on £31.0m turnover.
National Carriers Ltd: A first-ever trading profit in October and a £2.4m lower trading loss than in 1971. but railway, dock and power disputes hit traffic hard; so that the £3.7m grant agreed in advance for 1972 proved inadequate and the result, after grant, was some £2.8m below target.
Staff was cut from 21,300 to 19,300 in 1972. 31 depots were closed and 600 vehicles and 2300 trailers were disposed of. Between 1968 and 1972 the annual turnover per employee rose from £1560 to £2750.
Other companies in the general parcels grouping made a £560,000 profit on a £7.5m turnover. Tartan Arrow — pow brought into the parcels grouping — had a poor year and recovery is expected to be slow.
Removals and heavy haulage: The heavy haulage, removals and travel companies made just over £.4-m profit on an increased (£12.8m) gross receipt. Pickfords Removals Ltd had a better year, the warehousing is profitable. Pickfords Heavy Haulage Ltd shut five depots but increased its margins.
Bulk liquids: Profits up from £0.41m to £0.67m, due mainly to "a sustained and impressive recovery" by Harold Wood and Sons Ltd.
The other subsidiaries, concerned with special traffics (including Pickfords International, Cartransport BRS, Airlink and Freight Computer Services) made a small loss.
Pickfords International is the company through which NFC is making its entry into Continental operations, and for which it has extensive plans. Centres have already been established at Antwerp, Courtrai, Dusseldorf, Hamburg, Rotterdam and Zeebrugge. This year will see developments in France and Italy, says the report. Plans involve links with other freight operators in a variety of joint ventures. (CM last week.)
Northern Ireland Carriers Ltd, in which NFC has a half share, improved its profits in 1972.
Other points from the report:—
• NFC companies trained over 3500 drivers in 1972.
• Heavy vehicles are now being depreciated over six and seven years instead of seven and eight as previously. Trailer book-lives are down from 12 years to 10. Freightliner heavies are down from 10 years to eight.
• There is a need for research into improved handling and transfer techniques for freight in cities.
• Urban roads need improving to permit efficient freight flow — and reduce pollution effects.
• The outlook for 1973 is good, with "most of the companies in fighting trim."