As the company announces its annual results, ambitious logistics operator, Europa Worldwide Group, says it has seen a return to profitability in 2016 and expects strong growth in 2017 after a challenging but robust performance in the last financial year.
Europa’s Managing Director, Andrew Baxter, who acquired the company in August 2013, said the significant restructuring of the business has put some ‘bumps in the road’ but that the new structure had created a platform for significant improvement in efficiencies, profitability and growth in the coming years. Restructuring costs in 2015 were £1.6 million, and the total cost of the company’s restructuring programme in 2014 and 2015 was £2.5 million.
“Overall, the financial picture is a healthy one but, at times, it has been painful. We have not shied away from implementing some major restructuring projects, the last of which was changing our operational IT systems this summer. All of this change has a short term negative impact on the bottom line, but it’s a game changer for the business and has created an environment for growth. Added to that, for the first time in Europa’s 50-year history, turnover will break through the £100 million mark in the final quarter of 2016 which is a great milestone for us.”
Creating the UK’s largest European groupage hub in 2015, the company made its biggest single investment – the £30 million construction of its new 26,368 square metre logistics facility in Dartford. As part of this investment, rationalisations such as moving its entire Erith operation into the new 1hub and closing its Birmingham hub (the Minworth branch remains fully operational) helped improve efficiencies and cut costs.
1hub has vastly improved Europa’s capacity for European Road Freight and greatly increases the efficiency of its operating model. 1hub’s ability to process higher volumes has seen a 20% percent year-on-year increase in the number of consignments being handled. £3 million has also been invested over the last two years in its road fleet; the company currently has 36 road routes servicing Europe, 20 of which operate as daily services.
Europa Worldwide Group has reported a 14 percent year-on-year increase in turnover in 2015 to £96.5 million with operating losses of £0.9 million. Andrew Baxter puts this down to the recent restructuring programme. He expects a pre-tax profit in the current financial year of around £1.2 million and turnover to rise to approximately £110 million. He is forecasting turnover to reach £130 million in 2017 with net profits of approximately £3 million as the benefits of the restructuring and further investment translate into higher sales and profits.
“The long term benefits brought about by massive operational changes within the business will pay off and boost turnover and profitability. We have plans to enter new markets, create more jobs and increase the network of routes Europa operates into and out of Europe.”
Andrew added: “Now the last of the company’s major restructuring programmes has been completed, Europa is going for growth. These changes are transforming our business, and bringing commercial benefits to us, our customers and suppliers. The most important assets in the business, however, are our people. They have put in a Herculean effort to manage the changes, and have been incredibly loyal and hardworking during some very disruptive times. Thanks to them, we are coming out the other side and are gearing up for greater business success.”