The group yesterday disclosed that it had held operating profits at pounds 5.3m in 1992, despite a downturn in parcels and shipping because of the recession. At the pre-tax level, profits fell from pounds 11.1m to pounds 5.9m but the 1991 figure included a pounds 5.5m profit on the sale of its logistics division, which spanned road haulage, warehousing and an international trailer business.
The disposal means the group has cleared the debt taken on with the pounds 55m buyout and is considering plans for expansion. One possibility is a flotation, which would allow Phildrew Ventures - which backed the buyout and has 35 per cent of the shares - to realise its investment. Bunzl, the packaging company that paid pounds 95m for United Parcels in 1985, retains an 8 per cent stake and management and employees own 55 per cent.
In the year before the buyout, United Carriers made operating profits of just pounds 400,000 and its national parcels service was loss-making. That part has now been turned round 'making it smaller and more profitable' said Allan Binks, chairman.
The logistics business, which was profitable, 'was savaged by the recession. Financially we did not want to support it and it was not making adequate money,' he added. It contributed pounds 44,000 to profit on pounds 23.9m of sales before it was sold in 1991.
Lower parcel volumes in 1992 meant the division's profits fell, despite an increase in higher-priced next-day and 48-hour services.Reuse content