Exel loses out on sale of German business

Exel, a logistics company, yesterday warned it would reap a loss of £15.5m this year from the sale of its loss-making German unit and a wider restructuring of the business.

Exel, a logistics company, yesterday warned it would reap a loss of £15.5m this year from the sale of its loss-making German unit and a wider restructuring of the business.

Shares in Exel fell 31p to 769p yesterday.

The company said the net cash cost of the sale of its deep-frozen food business and restructuring other operations would be £6.3m with a further loss on disposal of the German operation of £9.2m. Exel will also write off goodwill of £17.7m.

Exel has been forced to to restructure its other German chilled operations after the fast food giant Burger King, a major customer, gave notice that it would terminate its contract with Exel in September, earlier than expected.

Two weeks ago, Exel said it should meet full-year estimates despite weakness in automotive freight management volumes and no recovery in demand for technology products.

"This (German unit sale and restructuring) has no impact on our view of estimates this year," said John Dawson, Exel's corporate affairs director.

Analysts have forecast that Exel's pre-tax profit before exceptionals will come in at £174m in the year to 31 December.

Exel said the German unit has been "consistently loss-making in recent years" and in 2000 had revenues of £104m and an operating loss of some £1m.