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Analytiqa: Logistics Bulletin: Friday 08th December

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Analytiqa: Logistics Bulletin: Friday 08th December

Written by Mark O'Bornick

Wednesday, 13 December 2006

Friday 08th December 2006 – This week's Logistics Bulletin reports on financial results from Christian Salvesen and UTi Worldwide. Christian Salvesen has reported a dip in profits in its first six months of 2006, with UK Transport operations continuing to lose money; restoring this business to profit is now Christian Salvesen's top priority. Meanwhile in the US, UTi Worldwide has increased revenues by 25.0% in Q3 of fiscal 2007.

Elsewhere, TNT has reported on the status of its 'Focus on Networks' strategy, where it has been making 'good progress' and Schneider Logistics has reported a 20.0% increase in the market for freight audit and payment services in Europe.

Among contract wins reported this week are GEFCO UK working for Ficosa, whilst BAX Global has been awarded a contract in Shenzhen, China by Trust International. Distribution centre news includes DHL and IBM developing an IT logistics platform for Karstadt Warenhaus, NYK Logistics has opened a cross-dock facility in Belgium, GEFCO is to establish a logistics platform in Russia and Continental has opened a warehouse in Canada. Other news includes TNT using zero emission electric vehicles in London and OH Logistics has appointed Bob Spieth as President, Contract Logistics.

Christian Salvesen reports dip in profits for first six months of 2006
05 December 2006 - Christian Salvesen has released its results for the six month period that ended September 30th, 2006. Revenue at the Company increased by 7.5%, to reach £433.0 million, from £402.0 million that was recorded in the same period in 2005. Profit before tax and exceptional items was £7.1 million, a decline of 12.3%, from the first six months of 2005 when the result was £8.1 million and after-tax profit rose £27.3 million to £33.0 million, largely as a result of a gain from the sale and leaseback of part of the Company’s UK property portfolio.
The Company’s first half performance was broadly in-line with expectations, as revenue increased but profit growth was held back by a number of factors. All of the Company’s businesses delivered revenue growth during the period, with the Food & Consumer sector increasing by 7.6% and the Transport sector increasing by 7.4%. Despite the overall revenue improvement being encouraging, it is taking the Company longer to deliver growth in profitability. In the Food & Consumer sector, operating profit growth before exceptional items was 6.2%, reflecting a strong UK performance and margin pressure in mainland Europe. However, the Transport sector reported weaker underlying profit performance and the UK Transport operation has continued to lose money; restoring this business to profit is now Christian Salvesen’s top priority.
In the Transport sector, French operations have managed to increase market share in a difficult market, but suffered weaker margins as it added capacity to meet unexpected high demand during the first half. In Spain, costs were impacted by a continuing under-supply of subcontractors; however this is believed to be a cyclical factor and conditions are expected to improve over time.
The UK Transport turnaround programme is progressing more slowly than the Company would like. Focus is being put on both revenue quality and operational efficiency supported by investment in IT but in the longer term, more substantial changes may be needed. This year, losses have been exacerbated by the start-up costs of Christian Salvesen’s national tyre distribution partnership with Goodyear Dunlop, which has involved creating the UK's largest shared-user tyre distribution facility.
The Company is to focus on its core logistics activities, to make the most of its strengths in shared-user platforms and advanced IT systems. Christian Salvesen is also aiming to put greater emphasis on winning large-scale contracts involving value-adding services.
Elsewhere this week:
UTi Worldwide increases net revenues by 25.0% in third quarter
http://www.analytiqa.com/newsitem.aspx?articleid=2076
TNT makes 'good progress' on its 'Focus on Networks' strategy
http://www.analytiqa.com/newsitem.aspx?articleid=2070
Schneider Logistics boosts freight audit and payment services
http://www.analytiqa.com/newsitem.aspx?articleid=2079
GEFCO wins business in the automotive sector
http://www.analytiqa.com/newsitem.aspx?articleid=2068
BAX Global wins new business in Shenzhen, China
http://www.analytiqa.com/newsitem.aspx?articleid=2071
DHL and IBM develop IT logistics platform for Karstadt Warenhaus
http://www.analytiqa.com/newsitem.aspx?articleid=2075
NYK Logistics opens cross dock facility in Belgium
http://www.analytiqa.com/newsitem.aspx?articleid=2069
GEFCO to open its first logistics platform in Russia
http://www.analytiqa.com/newsitem.aspx?articleid=2074
ProLogis enters new port market in China
http://www.analytiqa.com/newsitem.aspx?articleid=2080
Continental opens Canadian distribution centre
http://www.analytiqa.com/newsitem.aspx?articleid=2077
TNT to use zero emission electric vehicles in London
http://www.analytiqa.com/newsitem.aspx?articleid=2073
Ozburn-Hessey Logistics Names Bob Spieth President, Contract Logistics
http://www.analytiqa.com/newsitem.aspx?articleid=2078
Click www.analytiqa.com/news.aspx for additional developments added daily.
Mid-Tier 3PLs struggle to maintain margins
Winners and Losers amongst European 3PLs... Click www.analytiqa.com/pdf/free/WhosWhoinEuropeanLogistics2006.pdf for more details.
Which companies are growing revenues faster than their competitors? But how are their margins changing?
Who's Who in European Logistics 2006 is a statistical analysis, based on unique primary research exclusive to Analytiqa, of the leading logistics service providers in Europe.
Who is striving, thriving or simply just surviving? To see the content available in this report, click

www.analytiqa.com/pdf/free/WhosWhoinEuropeanLogistics2006TOC.pdf

Analytiqa
Gate House, Fretherne Road,
Welwyn Garden City, UK, AL8 6NS
Tel: +44 (0)1707 37 22 11
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