EV Cargo rumours abound

US media reports private equity owner EmergeVest considering sell-off of firm or $1bn flotation

EV Cargo sale rumoured

Hong Kong-based private equity firm EmergeVest is working with a financial advisor to look at the possibility of selling its UK subsidiary EV Cargo, following a surge in investor demand in the logistics sector, according to sources.

The review could lead to a sale or an initial public offering (IPO) of the business, which could be valued at over £1.11bn, the sources told US news channel Bloomberg recently.

EmergeVest is also considering potential listing venues for EV Cargo, including London and New York, according to the report. However, the sources also said that the owner could decide to retain the business for longer.

A spokesman for EmergeVest declined to comment.

EV Cargo is on a major drive for growth as part of a wider strategy by EmergeVest to boost global revenue from $1.4bn (£1bn) to more than $3bn by 2025, through organic growth as well as mergers and acquisitions.

The group has also recently seen major changes at executive level. In July last year Palletforce chief executive Michael Conroy was promoted to EV Cargo UK chief executive, but left the business for “personal reasons” just two months later.

Industry veteran Adam Leonard, who was appointed to take the place of Conroy as Palletforce’s new chief executive in September, then left the company in December.

In addition, EV Downton saw the departure of its managing director Zac Brown and financial director Ben James in November. All three departures follow the appointment of Paul Coutts in September as EV Cargo chief operating officer.

EV Downton blames ‘difficult’ times for £3.7m loss

EV Downton, formerly known as CM Downton, saw its annual loss deepen to £3.7m in 2020 as the company battled with the impact of Covid-19 pandemic lockdowns, according to its latest results.

The Gloucestershire-based haulier, which is part of EV Cargo, employs 1,345 staff and has operating licences for a fleet of 744 trucks and 1,451 trailers.

The company’s results to 31 December 2020 reveal that it delivered £105.4m in revenue over the period, compared with a turnover of £56.4m in the previous six months to 31 December 2019, representing an annualised fall of 6.6%.

It made a pre-tax loss of £3.7m over the year, compared with a loss of £1.9m over the previous six months. Net assets also fell by 10.6%, on an annualised basis, from £28.3m to £25.3m.

The figures sit in stark contrast to EV Downton’s previous full set of annual results for the year ending 30 June 2019, in which the haulier, which was bought by EV Cargo owner EmergeVest in 2018, made a pre-tax profit of £2.17m.

Following the acquisition, the company, then known as CM Downton, became part of EV Cargo group, which included Palletforce, Adjuno, Allport Cargo Services, Jigsaw and NFT.

The strategic report to the firm’s latest annual results said the pandemic created a “difficult” second quarter in 2020 and saw the company breach its EBITDA covenant contained within the senior bank facility.

Double disqualification as Midlands builders’ merchants fall foul of TC

Two builders’ merchant companies have been disqualified from holding HGV licences by the West Midlands traffic commissioner and had their licences revoked.

M K Builders’ Merchants, which held a restricted operator’s licence for two trucks, came before traffic commissioner Nick Denton after concerns were raised about its maintenance record following an investigation by DVSA in 2019, which found that the company had a very poor maintenance record and almost no understanding of the rules.

The investigation found that the company had three roadworthiness prohibitions out of four encounters, for an inoperative direction indicator and a leaking brake valve, as well as multiple MOT failures.

At the time, the company had given assurances that it would improve compliance.

The traffic commissioner found that these assurances had not been followed up by the company in any effective way. He revoked the company’s licence, and disqualified the company and its director Mohinder Singh from holding a licence for 12 months.

The second case involved HRA Builders’ Merchants, which the traffic commissioner found had already started to operate goods vehicles before its application for a standard national licence had been granted in September 2021.

The public inquiry heard that the company failed to respond to requests for an explanation and failed to appear at the public inquiry. Denton revoked its licence and disqualified the company and its directors Ansar Ali and Saika Bibi indefinitely

SHARES SUSPENDED: Trading of DX Group’s shares on AIM has been “temporarily suspended” pending publication of the company’s annual audited accounts. The share suspension follows an announcement by DX in November last year that its audit and risk committee had raised a corporate governance inquiry relating to an internal investigation, which started during the 2021 financial year. Under AIM rules, the firm was required to publish its audited report by 2 January, but it was not in a position to do so. However, day-to-day business is continuing at the company, which has announced the opening of another two depots. The new depots will serve the group’s DX Freight division, which specialises in the delivery of irregular dimension and weight items. One is at Bodmin Business Park and will support distribution across Cornwall. The other is at the Severn Stars Industrial Estate in Coventry.