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TDG reports mixed year
Page 17
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• The Transport Development Group increased its profits by 8.3% to £47.1 million in 1988, but profits for the group's UK transport operation fell from £13.5 million in 1987 to £12.7 million in 1988.
These results, which were about £3 million below City expectations, caused the group's shares to fall by 4p to 248p on Monday.
TDG chairman Sir James Duncan says the fall in UK transport profits was partly due to the decline of parcels carrier Independent Express, which was sold to Tuffnells Parcel Express last November. He also blamed fierce competition in some sectors, which resulted in lower margins and less work for some TDG firms.
The road transport industry was showing signs of slowing down and the situation was worsened by interest rates, which had dampened consumer demand, and the mild winter which had affected the heating oil transport sector, says Sir James.
During 1988 TDG sold its steel reinforcement companies for .£59 million and now plans to acquire more transport companies. But Sir James stresses that no purchases will go ahead until borrowing ratios and company takeover prices drop.
Spain and Portugal are prime areas for acquisitions, and there is the possiblity of more mergers between UK TDG firms in 1989.
Cold store operations continued to decline during 1989 but plant hire firms prospered. The group now owns 4,000 vehicles in the UK and 2,250 overseas. More than 40% of turnover and 32% of profits came from companies in Holland, France, America and Australia.