Case Study #1 – Transport and Logistics client – a turnaround journey

Last year we worked together with a Transport and Logistics company based in the West Midlands, like so many companies in that niche they were facing the “Cauldren of costs” that has so impacted that sector, to give you an idea of the issues that niche faces, there are around 45,000 less UK HGV  driver licence holders than jobs which has led to the sector becoming dependent on Eastern European drivers.

When you then consider how Brexit has played out, and that the exchange rate between many Eastern European counties and the Euro and Sterling has made working in Germany more attractive you start to appreciate the scale of the challenges that niche faces.

Then to add to that there are the recent :-

  • Living wage increases.
  • Auto enrolment % uplifts.
  • Apprentice levy introduction.
  • Business rate increases.
  • Price hikes to Diesel.

Another major factor is the unemployment rate which in the West Midlands is running at less than 4%, transport businesses typically recruit from within a five miles radius of each depot, so the supply of local drivers is very low and due to the need for a HGV licence there are barriers to entry within that employment market.

So not surprisingly our client was facing a real squeeze.  The challenge was to help them model the business to support a fund raising exercise, given the challenge there was also an added urgency in that the cash flow forecast showed a pinch point at the end of the year.

Our team was able to field a very experienced Finance Director who worked with our client 3 days per week producing a model and supporting the in-house Finance team.  We are pleased to report that the project was a success the model allowed funding to be found/released and the business was able to move onwards.

We were also able to share our experience of other players in this competitive niche who have moved to embrace the pallet network concept whereby operators share costs and each others networks, greatly reducing and transforming costs in some instances.  Many loss making transport companies have been able to move back to profit by adapting in this way.

Our client was happy to share this quote with us.

“I can’t thank FD Capital enough for the help and support given, a really high quality flexible and knowledgeable FD was provided with just the skills we needed and at short notice, certain now that using your outfit was the 100% right approach for us to take.  Their knowledge of our sector was a real eye opener to us”

If your business operates in the Transport and Logistics sectors and you need the help of an interim, portfolio or permanent FD then reach out to us, we have an active team of FD’s and a national network to support us.