Gist continues to outperform
UK contract logistics company, Gist, formerly known as BOC Distribution, has reported strong growth in its fiscal first half of 2003. Revenues were up 14% to £149.6m (€210m) compared with the same period in 2002. Profits rose by 3% to £12.2m (€17.1m) in the half, with the second quarter showing an even bigger rise by 4%.
Gist is highly exposed to the UK consumer market and in particular to grocery and clothing retailer, Marks & Spencer. According to management higher volumes at M&S were largely responsible for Gist’s increase in revenues and profits. The company has taken over nearly all of the retailer’s food logistics although following a strategic review it will cease to be involved in the distribution of its general merchandise. Compensation payments over the next two years are expected to reduce the impact of the loss of this business.
The results indicate that strong retail sales in the UK are continuing to support the associated logistics industry. Whereas many logistics providers in mainland Europe are struggling due to weak economies, the UK market has experienced continued growth (see UK Logistics Leaders 2003). However Gist has been one of the few companies to report rising profit margins over the last few years as it has a created a mix of higher margin, low asset solutions and more traditional distribution business.
