SCOTTISH haulage firm Malcolm Group achieved a hike in pre-tax profits from £2.4 million to £4.4m during its last financial year in spite of a fall in turnover from £179.2m to £170.4m, it revealed yesterday.
Malcolm Group, which was taken off the stock market in May 2005 and back into private ownership by the Malcolm family, attributed the fall in turnover to a deliberate reduction in the scale of its construction services division. This part of the Malcolm Group business provides civil engineering and groundwork services, as well as a waste management offering, to the construction industry.
The decision to scale back this side of the business has been taken as a result of the downturn in the construction sector.
Malcolm Group, which declares on its website that it employs more than 2000 people, said that its net debt had fallen from £20.5m to £17.7m during the year to January 31.
Profit at the operating level, before interest payments, edged up to £7.1m in the year to January 31, from £6.9m in the previous 12 months.
Malcolm Group’s Malcolm Logistics operates throughout the UK and increasingly into Europe. It operates more than five million square feet of warehouse space spread over 10 sites. As well as the road haulage for which it is best known, it also runs a rail freight operation.
Andrew Malcolm, group chief executive, said: “Group turnover during the year ended 31 January 2011 was £170m, compared (with) £179m in the previous year, reflecting the reduction in activity in the construction services division, following our strategic decision to right-size the business in light of the ongoing downturn being experienced within that sector.”
He added: “The group recorded an operating profit of £7.1m, against £6.9m in the previous year, a very creditable performance given the challenging trading conditions experienced during the year.”
And he was relatively upbeat about current trading, while noting that activity in the construction services division continued to be lower than in previous years.
Mr Malcolm said: “Going into 2011, activity levels in the logistics division in (the) first quarter are ahead of the same period in 2010 and we are experiencing an increase in enquiry levels. The construction services division continues at lower activity levels than previous years, reflecting the continuation of our strategic decision to right-size the business.”
Malcolm Group said it “continued to invest in the long-term future of the business by spending £18.3m on capital expenditure” in the year to January 31.
Mr Malcolm highlighted his satisfaction with Malcolm Group’s balance-sheet position. He said: “With net debt at 31 January 2011 at £20.5m compared (with) £17.7m in the prior year, and after significant capital expenditure noted above, and the group’s banking facilities renewed until 2013, the group is well-positioned to take advantage of any opportunities available in the current environment together with any upturn in economic conditions.”