Contrasting fortunes for Exel, TDG
Two leading European contract logistics companies have issued trading updates, revealing contrasting fortunes. Exel confirmed that its contract logistics business was performing well, confounding some analysts’ fears that it would be adversely affected by the problems experienced by many of its consumer goods manufacturing clients. Management highlighted that its logistics division was operating particularly strongly in the Americas region.
The rest of the company has enjoyed mixed success. Exel’s air freight operations in Europe and the Americas have been underperforming, although this has been balanced by the company’s sea freight business and on-going development in the Asia Pacific region. New business wins are up on the same period last year and the company is confident that the rest of the year will see strong progress.
In comparison TDG has continued to find the trading environment difficult. The company is in the process of transforming itself into a European contract logistics player and has disposed of much of its low value warehousing and transportation activities. However margins have continued to fall and in order to counter this it has taken the step of reducing its cost base further in the UK. It is also exiting some low value contracts in Ireland. The combination of these two steps will result in a £1m (€1.4m) charge, although the management claims that it will still meet profit targets for the year. The company confirmed that the result of its strategic review of its French acquisition, Flèche du Nord, is underway and will be released in the next few months. Although the acquisition was made only two years ago, its poor performance has already been a major cause of concern to management.
