Gist profits from strong UK volumes
UK industrials group BOC has released its third quarter results for its logistics subsidiary Gist, previously known as BOC Distribution. The figures show a significant increase in revenues and profits, although much of this can be put down to exceptional items. Sales jumped by 19% to £77.7m (€113.4m) compared with the same period in 2002 and operating profits by 40% to £11.1m (€16.2m). Sales for the full year 2002 amounted to £264.8m (€387m).
The company benefited from a one off payment of £4.1m (€6m) from UK retailer Marks & Spencer following the re-structuring of its supply chain. This resulted in a general merchandise distribution contract with Gist being terminated, although the logistics provider continues to handle all the chilled and ambient goods distribution for M&S in the UK.
Even after taking into account this benefit the company saw organic growth in operating profits of 4%. Gist has a high exposure to the UK consumer market which has seen it take advantage of buoyant retail sales. In particular the company highlighted the higher volumes which it had experienced in one of its largest contracts with the brewer Carlsberg-Tetley. The company also reported a contract win in the last quarter for its nascent logistics consultancy business. This type of business provides the company with an additional higher margin, lower asset intensity revenue stream to its traditional distribution activities.
