Fowler Welch – turnover rises but pre-tax profit nudges down

Spalding, UK: Fowler Welch’s pre-tax profit fell by £100,000 to £4.3m while turnover jumped 6% to £178.7m in the financial year to the end of March 2019, according to parent company Dart group.

The reason for the increase in revenue was that “two significant contracts” began mid-way through the financial year, supplemented by organic growth.

On Fowler Welch’s overall performance, Dart says: “Operationally, the business performed well, though varying chilled volume profiles at certain depots led to some operational inefficiency as customer service levels were maintained. As a result, profit before taxation fell slightly.”

The company’s Spalding depot is one of the largest chilled food consolidation warehouses in the UK and is the largest chilled site in the Fowler Welch network. Following investment in the previous financial year revenue in the last financial year grew by 2.4% as new long-term contracts were secured.

This operation now distributes over 60,000 pallets each week. Dart says that the benefit of the new contracts will be greater in the current financial year due to the full-year volume effect and the non-recurrence of start-up costs.

Revenue growth of 2.7% from the company’s Kent distribution facilities at Teynham and Paddock Wood was driven by incremental volume from existing customers.

The performance of Integrated Service Solutions (ISS), Fowler Welch’s joint venture operation at Teynham, which ripens, grades and packs a variety of stone fruit, berries and exotic fruits, was “particularly pleasing”, says Dart.

The business delivered a significant year-on-year revenue increase underpinned by a growth in berry categories which led to improved profitability. Further product packing opportunities place ISS in a strong position for the future.

The Hilsea depot achieved a revenue increase of 10% as it benefited from growth across several suppliers, demonstrating the importance of this region in providing salads, herbs and vegetables to UK retailers and underlining the strength of the range of warehousing, consolidation and distribution services offered.

The regional distribution centres at Washington in Tyne and Wear and Newton Abbot, near Exeter in Devon continued to provide direct store delivery services to over 100 supermarkets and both sites achieved improved profit performance year on year.

A strong revenue pipeline at the operation at Nuneaton saw several new customers added towards the end of the financial year, with others implemented at the start of the current financial year.

The 500,000 square foot ambient (non-temperature controlled) shared- user distribution site at Heywood near Bury, Greater Manchester made “good progress” in the year. Positive momentum “is expected to continue into the current financial year”, Dart says.

“With its strong and committed team, and the expertise and flexibility to operate effectively in both the temperature-controlled (chilled and produce) and ambient arenas, we remain confident in the future growth prospects for Fowler Welch,” Dart says.

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