PalletForce GBP1m pre-tax profit
Shareholder-owned pallet network is snapping at the heels of two of the ‘top three’ after a terrific year and confident predictions of an even better 12 months to come.
PalletForce is set to announce a (pounds sterling)1m pre-tax profit for the year ended August 31, an increase of two-thirds over the (pounds sterling)600,000 in 2002/3. Year-on-year, volumes rose by 57%. And chief executive Mick Scarlett is predicting sharply improved profitability and more strong growth this year. Profit will rise 150% on a 50% growth in volume, up from 5,000 pallets a night now to 7,500 in a year’s time, he says. Those figures will put the company hot on the heels of rivals Pall-Ex and Palletline according to Scarlett. He says Palletways is out in front as clear market leader by volume. Scarlett says: “It wasn’t our plan to catch up with the big three. We set out to focus on quality, but as a result we have developed a very good name within the sector.” Growth is coming from the recruitment of new member depots, through the success of its central sales team and further migration of transport firms to the efficient hub and spoke system rather than making deliveries on their own trucks, he says. But Scarlett says there are signs that the market is beginning to mature as hauliers have to cope with increasing operational costs. “Firms belonging to networks with higher volumes, with lower delivery cost per pallet will thrive,” he says. Eventually, the larger networks will begin trying to recruit membership of the smaller networks, as the number of new entrants to the market falls. “We are attracting members from the larger networks because of our shareholder ownership model. We’re not driven by hub profit and would put members before profit if necessary,” he says. Scarlett believes it is up to the networks to keep hub costs down. This year PalletForce raised its hub fees by 5p per pallet, to (pounds sterling)4.10 a pallet, compared to a 16p rise the previous year. Network members will receive a dividend this year, and the profit will be partly reinvested. An IT system upgrade is being discussed, as is relocation to a bigger hub.
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