Bosses return to ‘coal face’

Business Post Group chief executive Guy Buswell says changes since he took over six weeks ago have already led to improved service levels.
Buswell faces an important period with major customers: Walsh Western, for which it delivers Dell computers and which had high volumes in January; and Federal Express, whose contract is up for renewal this spring.
There will be competition for the Fedex contract- it is ‘a fantastic opportunity for any parcels operator’, he says; but Fedex will be ‘very happy with our January performance on their account’.
Internal changes have strengthened the service for these two customers, he tells MT, but stresses also that the group wants to ensure high standards for all customers.
‘Service levels in January are absolutely excellent and a good starting point for our new management,’ he says.
Buswell has been with the business since 1989 and replaced Paul Carvell in early December. He has stripped out a layer of seven divisional managing directors, which will take out £500,000 in costs from next year’s accounts; more importantly, the ten-strong team now running the company are much closer to the coal face and more focused on margins. Staff at branch level now have more say and feel more motivated. Under the previous ‘silo management’ approach the group had become fragmented and top heavy, he says.
UK mail is ‘going like a train’ and the courier and pallet business are satisfactory. ‘The core [parcels] business is where it is going wrong. We’re out of kilter. What has got to happen is quite straight-forward; we have to reduce costs, improve selling margins and sell more.’ Doing it is the challenge, he says.
Buswell has had to issue a new trading statement, warning of a further reduction in expected profits this year. Pre-tax profit before exceptional items is now forecast at £9m for the year ending March 31, down from £20.5m in 2004/5. Exceptionals are expected to total £4.2m, £1m of which is for the management changes.
Expectations of margin improvements in parcels, resulting from improved selling prices and lower costs, have not been achieved, the statement says.
A review of the franchise network has identified that further one-off investment of £1.5m is required to ‘secure its long-term future.’
The group will buy all the freeholds of franchise operations, Buswell tells MT.