Boughey Distribution is a leading consolidator of ambient grocery products with significant warehousing and distribution assets.
The business consolidates full loads from its customers, the food producers and importers, and ships across the UK daily to all the major supermarkets, cash and carry and food service customers.
FY18 has been a year of major customer transition, which resulted in operating challenges for the division. Positively the business won contracts which total 20,000 pallet spaces of new business to replace a significant contract which had ended as anticipated. This ensures the future utilisation of space at the Wardle site. The on-take of these new customers was very challenging with multiple new accounts arriving in a short timeframe, with the recruitment and training of an additional 50 members of staff and the reorganisation of warehouse space to accommodate the new customers. The on-take of new customers has been completed, the associated resources are in place and we are now focused on improving operational efficiency.
Food has won contracts that underpin its future development.
Revenue increased 3.6% to £40.4 million (2017: £39.0 million). Storage overall was at an average of 90,000 pallets (2017: 97,000 pallets), reflecting the average pallets stored as customers transitioned during the year. More significantly, total outloads increased by 17% in the second half compared to prior year as the new customers have higher stock turn and therefore a greater distribution requirement. Headline operating profit was £0.7 million (2017: £3.0 million), reflecting the necessary costs of customer on-take, operating with new customers who have differing needs and a significant increase in the workforce who were less efficient in their initial period. The Palletline operation continues to grow and a fledgling e-fulfilment business has commenced with good potential for expansion.
Demand for our customers’ products continues to be stable and the outlook for most product categories handled by the business is resilient. The business operates in a competitive supply chain and needs to continually demonstrate the value and service that it provides to food manufacturers and importers. The business has a leading position in consolidating ambient grocery products in the North West, with high service levels, industry leading systems and a strong operating performance being the key components of its customer proposition.
- Won over 20,000 pallet spaces of new business
- Activity levels higher with new customers
- Palletline continued development
- Fledgling e-fulfilment business established