TDG profits hit by problems in France
TDG saw 4% a decrease in its headline profits at £22.6m (€33.1m) last year despite a 7% increase in turnover to £567m (€831m).
Chief executive David Garman described this as a “creditable performance”, but warned: “We do not see a significant improvement in the economic climate in 2003.” This uncertainty was slowing down customers’ decision making and putting pressure on margins, but Garman still predicted a modest profit improvement this year.
TDG has changed its model for European expansion in light of its experiences in France, where inflexible labour agreements and volume-dependent contracts have hit margins.
The language barrier has also been a problem and Garman promised: “We will be reshaping our French business.” The company is eliminating unprofitable contracts there and is looking for alliance partners which have existing business and local knowledge.
Garman said the company would also seek “collaborative arrangements” in markets such as Spain, Germany and Poland, complementing its directly owned businesses in the UK, Ireland and the Netherlands.
Like many of its competitors, TDG is putting its focus on contract logistics and has completed its exit from general haulage in the UK and the Netherlands, as well as closing a number of cold stores.
In each of its two principal sectors of consumer goods and chemicals, the group has grown its business by 15% a year for the last two years.
Posted: 03/03/2003
