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Firm returns to profit after an ‘ingrained major loss-making period’ Tuffnells reports 16% revenue rise after MBO

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Sheffield-based Tuffnells Parcels Express saw a 16% revenue boost in the first eight months following its management buyout, according to its latest financial results.

The management team bought the company for £15m in May 2020, just six years after Smiths News Group had acquired it for £100m in 2014.

The buyout was prompted by years of poor performance under group stewardship. The management team have since pledged to return the company, which employs over 2,450 staff, to its place as the UK’s number one carrier of mixed freight and items of irregular dimension and weight.

Reporting its latest results for the 16 months to 31 December 2020, the company revealed that following the sale on 2 May 2020, revenue rose to £114.3m in the first eight months, compared with £98.2m for the previous eight months to 31 April 2020.

In the last eight months under the ownership of Smiths News Group, four depots were closed and the customer base rationalised due to the impact of the Covid-19 pandemic “which led to a reduction in volume capacity, service deterioration and reduced revenue”.

The review said that the 16% revenue rise coupled with “strong, but sensible, cost controls” yielded a gross margin of 21.6% for the period May to December 2020, compared with 11.3% for September 2019 to April 2020.

The final six months of 2020 saw an operating profit of £1.05m and the overall pre-tax profit for the 16 months to 31 December 2020 was £6m, compared with a pre-tax loss of £29.3m in the 12 months to August 2019, the review added.

The board said it expects continued volume and revenue growth as a result of service improvements, adding: “Profits are expected to follow the same pattern, but aided further by improved productivity and sustained cost management.”

Commented executive chairman and chief executive Michael Holt: “Within eight months under new ownership, we successfully returned Tuffnells back to profit. In the months since, we have continued to see significant and sustainable improvement, demonstrating a remarkable and rapid turnaround for the business.”

STAR PERFORMERS: Herts-based Forward Trucking Services has ordered 21 Mercedes-Benz Actros 2546 variants, all achieving Direct Vision Standard’s (DVS) four stars. The fleet replacements were supplied by S&B Commercials and are significantly more fuel-efficient than its other trucks. In addition, a demonstrator Actros supplied to the firm was found to consume half as much AdBlue, meaning it expects to save £100,000 in costs for additive. Pete Samuel, Forward Trucking Services MD, said: “A lot of our work takes us into London, so the fact the Actros came out of the box with a four-star DVS rating weighed massively in its favour.” SOURCE FINANCE MAINTAIN RECYCLE ...VANS RENTAL + SALE

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