Logistics service provider Christian Salvesen has announced mixed interim results for the half year to September 30, 2003.
While total turnover from continuing operations increased by £8 million to £417m, turnover for the group's UK operation dropped by eight per cent to £218m and profit decreased by 24 per cent to £10.3m.
Edward Roderick, chief executive of Christian Salvesen, said: “Our financial results reflect continuing difficult trading conditions in the markets where we operate. We are acting to improve margins through aggressive cost reduction and are also working harder to boost the sales pipeline. Under a strengthened management team the results of these actions are beginning to take effect in the second half of the year.
“Our focus over the past six months has been the restructuring of the two UK divisions into one, which I am pleased to report is now largely complete. The UK now has a more focused operational structure, with a significantly reduced cost base and a strengthened management team,” he said.
“While our focus has been on the UK, we have not lost sight of the importance of our European operations. I am pleased to report that the underlying increase in turnover for our European operations as a whole was five per cent in the first six months of this financial year.
“Our priorities during the second half are clear. We aim to further reduce the cost base, and to exercise tight control of capital expenditure. We will also maintain our focus on improving the service offering and value we provide to our existing customers, and on developing the new business pipeline. We are rigorously enforcing these disciplines across the entire group and are confident that our actions will underpin profitability in the short term and provide the foundations for sustained improvement in the future.
Food and consumer sales were down 13 per cent to £130m in the UK and profits fell by £2.6m to £8.3m. “UK retailers have maintained pressure on their supply chain costs, and we have continued to cut our own costs in response,” said Roderick.
Salvesen is developing a new IT system, BACTRAC, for its expansion into the reverse logistics sector. It has won additional business from M&S for its new concept Lifestore, to be launched next year, and renewed a five-year dedicated contract with Safeway. Other new business wins included Gate Gourmet.
Roderick added: “In the UK food processing business, pricing and volumes were impacted by a good harvest and market overcapacity. Although our key strength ñ product quality ñ lost some of its edge in a price-dominated market, we won new business with Morrisons and gained additional business with Tesco and Safeway.
“Our market-leading COMET IT system is key to the growth of our support services business. [It has] been installed in our Spanish operations to control the movement of trays to and from the fruit growing regions. The push into the European markets continues and a significant pipeline of opportunity has been identified,” he said.
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