Profits fall at Felxistowe logistics company Damco UK after ‘challenging’ year
- Credit: Archant
Logistics company Damco UK has reported a fall in annual revenue and profit after a “challenging” year.
But the Felixstowe-based firm, a member of the EADT/EDP Top 100 listing of the largest companies in Suffolk and Norfolk, said operating margins had improved during the year to December 31, which saw the completion of a two-year restructuring programme.
Turnover for 2015 totalled £92.45m, down from £121.99m the previous year, with revenue affected by conditions in the freight and shipping markets and the level of demand in the wider economy.
Gross profit fell by more than 20%, from £18.71m to £14.86m, although a reduction in administrative and finance expenses saw the fall in pre-tax profit limited to around 15%, from £514,000 to £437,000.
In accounts newly filed with Companies House, Damco UK said: “The company has faced a challenging year, during which it completed a significant operational restructuring programme, which commenced towards the end of 2013.
“Improving long-term performance by optimising operational processes, together with offshoring administrative tasks, continue to be central to the company’s growth ambitions.”
It added: “Despite the challenges presented by a continuing global economic downturn, gross margins have improved slightly at 16.1% in 2015 (from 15.3% in 2014).
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“Customer retention continues to perform strongly, which to some extent has compensated for the impact of negative market conditions.
“Ongoing performance improvements are expected to come from an improved trading environment and maintaining tight control of administrative expenses.”
Looking ahead, Damco UK, whose ultimate parent company is the Danish conglomorate AP Moller-Maersk, said the broad range of service it provided, to customers in a variety of industries, meant it was “well placed to meet a challenging trading environment”.
Damco UK, which is based in Parker Avenue, close to the Port of Felixstowe, is part of the Damco freight forwarding and supply chain management company which has its global and European headquarters in The Hague, in the Netherlands.
The name of the company is derived from CWH van Dam & Co which in 1988 became part of the Dutch Royal Nedlloyd Group.
In 1996 Nedlloyd merged with the P&O Containers business to form P&O Nedlloyd, which was then acquired by the Møller-Maersk group in 2005.