Tough market hits Salvesen

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Christian Salvesen pushed up sales 7.5 per cent to £433m in the first half but tough conditions in the transport market meant that profit before tax and exceptionals was down from £8.1m to £7.1m.

UK Food and Consumer business performed strongly, but, said chief executive Stewart Oades: “Effective asset utilisation remains the principal challenge for our UK Transport business, where we have been disappointed with the growth in our transport volumes. Revenue growth during the first half is almost exclusively attributable to the start-up at the Tyrefort national tyre distribution centre, which we took over in July. Profitability suffered as a result of the start-up costs, but we expect it to be operating in line with our expectations by the end of the financial year.

“Our marketing activity is focusing more closely on the non-food retail consumer goods and high tech sectors, where we see greater growth potential. We have strengthened management and are introducing technology to increase service and transparency to customers. In addition, we have reduced our fleet by some 100 trailers to improve asset utilisation and are evaluating alternative infrastructure plans to provide more flexibility and a lower fixed cost model.”

Sales in the sector grew by 7.4 per cent to £212.5m but margins weakened to reduce operating profit from £2.1m to £2.0m.

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