European logistics provider TDG has become the latest logistics provider to release its 2006 results. Although management stated that they were in line with market expectations, they showed a decline in headline operating profit of £1.6m to £18m. Coupled with a slight increase in revenues of £20.8m to £531.3m, this resulted in a fall in operating margins from 3.8% to 3.4%.

Part of the problem was the drop in the level of contract renewals in 2005, which management said was as a result of a rationalisation in the UK retail sector. However this situation has been reversed with net contract wins of £60.7m in 2006 against £19.8m in 2005. All the same TDG’s management has come to conclusion that the general contract logistics market has become overcrowded with too much pressure on margins. It is therefore focusing growth on what it calls ’specialist logistics’ including Freight Forwarding, Supply Chain Management and Chemicals.

Indeed the driving force behind growth in the company in 2006 was its European Chemicals business. Revenues in this division grew by 25%, contrasting with falls in its UK and Netherlands contract logistics units. This was mostly due to the acquisition of Belgian chemical logistics specialist Mond which has been successfully integrated into the group and is presently exceeding profit expectations. To reinforce this success, TDG also announced the acquisition of Doman SA and its subsidiary Ferrer Logistica SL, a Spanish logistics business which mainly serves the packed and speciality chemicals sector. The business provides national and international transport services, warehousing and freight forwarding. It employs a network of transport subcontractors operating from eight Spanish warehouses. The acquisition will cost TDG a maximum of £21.1m.

Source: TDG

The Glossary of Terms in Logistics & Shipping is the most comprehensive paper-based dictionary and therefore the standard for defining terms used in the area of Logistics and Shipping. Use this powerful tool to expand your professional vocabulary and ensure that everyone on your team is speaking the same language. www.theKnowledgeTransfer.com

paperback student version $ 19,99 hardcover executive version $ 29,99

| Permanent Link | Print This eLog |

(Visited over 19328 times)