Palletline’s financial performance for the period from June 2021 to December 2022 has allowed the UK logistics leader to lay strong foundations for future growth.
In the 18-month period, total turnover increased by 67.9% to £301.2m. The component of turnover, relating to network services increased by £81.8m to £231.1m – a like-for-like increase of 3.4%. Revenues generated by the Logistics subsidiaries increased by £40.1m to £70.1m.
The extended accounting period follows a review of Palletline’s internal processes in 2022 when the board and members took the decision to change its accounting period to run from January to December instead of July to June in order to fall in line with all other reporting mechanisms in the business.
It has however been a volatile period, with the pallet network market having experienced a large increase in volume throughout the Covid period which continued throughout the first 12 months of Palletline’s financial reporting period. During the financial year a number of economic factors have influenced the business. The energy crisis, Ukraine, an increase in interest rates and talk of a recession has resulted in a change in consumer spending, which for the last six months of the period has resulted in a slight decrease in volume. Palletline is however in a strong position and is forecasting growth in 2023.
Established in 1992, Palletline is a co-operative of independent hauliers which work together to deliver palletised freight across the UK. It is now the only network which remains fully-owned and controlled by its member companies allowing them to influence how the group is managed and be involved in the long-term strategy of the business.
Over the past two years Palletline has made significant investments in providing full national coverage for its members. This has resulted in the incorporation of Palletline Northeast, Ningbo London, Ningbo Wrexham and Palletline Whitehead. Whilst the setup and acquisition costs for these businesses have been considerable, resulting in some losses for the first year of operation, strong improvement plans and training programmes are in place for each of these businesses over the next three years.
To further reinforce Palletline’s position in the marketplace, its Business Information team consistently utilises data analysis to forecast market trends, map its future and respond to fluctuating volumes. It is a discipline which has paid significant dividends and is indeed the only network to have such a function.
Service too continues to be a prime focus within the business with service levels consistently achieving a rate of two per cent higher than the APN average.
Looking forward Palletline is investing in a plan that will provide sufficient capacity for future growth including the expansion of its current buildings and infrastructure at its main hub in Birmingham.
Graham Leitch, Group Managing Director of Palletline, said: “We have invested millions in our network to achieve full coverage and fortify ourselves for the future, and have still broken even over the last 18 months. This is a fantastic achievement considering the current economic landscape in the UK.
“We have now fully eliminated our caretaker costs – a unique feat in the industry and we are the only network with 100% national member coverage.
“Turnover remains strong and we are feeling positive and excited about growing the business over the coming months and years.
“We are already ahead of forecast this year and on track for record profitability into 2024 and beyond thanks to our strong commitment to forward planning.”
Palletline operates a multi-hub model, through which members collect pallets from local customers and exchange them at one of its regional hubs across the UK which continues to play huge dividends providing the business with flexibility to manage volumes as they continue to grow.
The adaptable nature of this model allowed the company to suspend and restart regional operations in response to demand – vital when operating in a market in a state of flux.
Graham added: “Looking ahead gives us multiple potential solutions to any challenges that may arise. It is this commitment to predicting what lies ahead that has allowed us to plant roots for an exciting period of growth.”