Logistics operator, Europa Worldwide Group, has seen a return to profitability in 2016 and expects strong growth in 2017 after undergoing a challenging last financial year.
The company closed down its site in Birmingham as part of a restructuring although it retained a hub at Prologis Park in Minworth, where it employs around 130 people.
Europa’s managing director, Andrew Baxter, who acquired the company in August 2013, said the restructuring of the business had put some ‘bumps in the road’.
However, he said the new-look business now had a platform for significant improvement in efficiencies, profitability and growth over the coming years.
The cost of restructuring saw the company make an initial outlay of £1.6m, with total cost eventually rising to £2.5m.
“Overall, the financial picture is a healthy one but, at times, it has been painful,” said Mr Baxter.
“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.”
He said that for the first time in Europa’s 50-year history, turnover was set to break through the £100m barrier during the final quarter of 2016.
In 2015, in order to create a European logistics hub, the group invested £30m into a 26,368 sqm facility in Dartford, now called 1hub.
However, as part of this investment, rationalisations such as moving its entire Erith operation into the new 1hub and closing its Birmingham hub had to be implemented in order to improve efficiencies and cut costs.
It said 1hub had vastly improved its capacity for European road freight and greatly increased the efficiency of its operating model.
1hub’s ability to process higher volumes has seen a 20% year-on-year increase in the number of consignments being handled.
The last two years has also seen £3m invested in its road fleet; the company currently has 36 road routes servicing Europe, 20 of which operate as daily services.
The group has now reported a 14% year-on-year increase in turnover in 2015 to £96.5m with operating losses of £0.9m.
Mr Baxter said he expected a pre-tax profit in the current financial year of around £1.2m and turnover to rise to approximately £110m.
He is forecasting turnover to reach £130m in 2017 with net profits of approximately £3m 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,” he added.
