The Widdowson Group has set out aggressive expansion plans with a target of a ten-fold profit increase in three years.
Managing director Peter Stevenson (above) said: “In November 2008 the management team embarked on a process to develop a strategy that would see the company thrive in a very tough market place. We knew we had to take costs out of the business and become more efficient.”
For the year to 31st March 2010 the business has targeted sales of £22.4m with a net profit of £100,000. The three year plan will see the company grow to £30m with a three per cent bottom line £1m net profit.
The company, which is based in Glenfield near Leicester, has brought in a new finance director, Arnaud Arhainx, from Norbert Dentressangle.
Arhainx said: “It is a big challenge for me. For the year ending 31st March 2009 Widdowson has reported a loss of half a million pounds on a turnover of £24.5m. My first priority was to look at every aspect of the business to see where we could make immediate improvements. The goal was to get the cost base down without impacting the high levels of service for which the business is renowned.
“The global economic downturn has forced almost every company to examine the way they do business and it is refreshing to come into a company that is so willing to change and move forward. For this financial year, we have taken a realistic approach and budgeted a fall in turnover of eight and a half per cent, in line with the downturn in the market. Despite this, the £2m cost savings we have made give us a more flexible cost base and enable us to confidently forecast a net profit of £100,000 for 2009/10.”
The strategy includes a reduction in the Widdowson fleet and better utilisation of vehicles. To achieve this, the company has made a significant investment in satellite tracking systems technology, enabling more efficient control of its fleet.
Further savings have been made by renegotiating supplier contracts right through the company. At the same time, there has been a management restructure, a reduction of the headcount and salary cuts throughout the business.
Commmercial director John Hawksworth said: “Traditionally, the Widdowson Group has developed through its core brands of transport and warehousing. And, while these divisions continue to support the growth of the business, the margins in both are being squeezed by increased competition and over supply in the market.
“As a consequence, our strategy is to diversify into other areas of logistics, principally contract packing and added value services where we can develop a niche operation with improved results. This will give us the ability to offer a totally integrated solution to our existing and prospective customers, while allowing us to further develop our core activities to support the added value operations.
“We have invested heavily in converting 50,000 sq ft of warehousing on site in Glenfield to become a dedicated contract packing facility. To improve our visibility in this market we have joined the British Contract and Manufacturers Packing Association (BCMPA). In addition, we are currently undergoing assessment to the BRC (British Retail Consortium) standard to give us the ability to offer food based customers a quality service in this area too.”