Tibbett & Britten – First Half Prelim Statement
LONDON (AFX) – Tibbett & Britten Group PLC, the logistics group, has lost
its contract with Safeway Inc in Tracy, California and announced write-off
provisions of 6.6 mln stg.
It was advised yesterday that Safeway is taking the operation back in-house
from August.
“Safeway has assured us that this decision has not been made on
performance grounds,” Tibbett said in a trading update prior to entering its
close period for the six months to June 28.
The consequent impact in lost contribution in the second half is estimated
at 0.5 mln stg. No termination costs will be incurred.
As a result of the terms of a revised agreement with Safeway in July 2002,
settling an earlier long running dispute, Tibbett will also write off
unamortised contract costs of 3.5 mln stg in the first half period.
Additionally, in the first half the group has recognised a provision of 3.1
mln stg against an outstanding receivable from an unnamed former North American
customer who entered into Chapter 11 bankruptcy proceedings.
“Although we anticipate receiving a considerable portion of the balance
outstanding, we have provided against the full amount.”
Tibbett said the impact of this provision has broadly been offset by the
termination payments to be received in connection with previously announced lost
contracts with Marks & Spencer Group PLC in the UK.
It said with the exception of the Safeway situation the US business remains
“broadly on track”.
Elsewhere in the Americas, the group said it has successfully started up
operations for Procter & Gamble in Mexico and continued the development of its
Mexican business.
Turning to the UK, the group said it is continuing to make “good progress”
and has seen a number of new contract wins, including significant new business
with Boots Group PLC and additional new business with GUS PLC’s Homebase, Tesco
PLC and other major retailers.
It said the impact of this new business will primarily benefit the second
half.
Elsewhere, Canada remains a “buoyant market” with encouraging levels of new
business development.
Tibbett added that it is continuing to build a mainland European business
despite the difficult economic environment, particularly in France and Iberia.
It has won new business with Levi Strauss, Rubbermaid, Tesco and started
operations for Rodier.
Tibbett shares closed Thursday at 517-1/2, capitalising the group at 251.7
mln stg.
