TDG profits continue to fall during year of restructuring

PROFITS and turnover fell in a year of continuing restructuring at Transport Development Group, but the haulage and distribution company said disposals would leave it with enough cash for acquisitions.

Pre-tax profits fell 20 per cent to pounds 26.9m in 1993. Exceptional costs of pounds 10m from closures and disposals stemmed mainly from shutting its French long-distance trucking subsidiary in June.

Profits also fell at the operating level, by 3.5 per cent to pounds 39.1m. Although margins shrank, UK profits were up 10 per cent in 1993. Martin Llowarch, TDG's chairman, said plant hire for the installation of cable TV networks was growing very successfully.

Operating profits on the Continent fell by more than 50 per cent. In the Netherlands and Germany turnover was hit by recession. TDG also used to have customs clearance work, which has been eliminated by Single Market agreements.

The group has restructured its French businesses, which lost pounds 3.7m in 1993. Mr Llowarch said: 'France is littered with small hauliers. It is not a game to be in unless you have dedicated customers.' Apart from closing Translittoral, its haulage arm, TDG merged its tanker and chilled-transport businesses down to two subsidiaries to cut costs. Mr Llowarch said he could not firmly predict that losses would be eliminated in 1994, but the results in France would be close to break-even.

With the announcement last month of the pounds 21.5m sale of its Australian business, TDG's operations are entirely European. At the end of 1993 gearing was 8 per cent. The Australian proceeds and three other planned disposals will leave the company with about pounds 20m in cash. Mr Llowarch said TDG would also borrow up to pounds 50m, and look for 'wise' acquisitions.

The dividend for 1993 was unchanged, while earnings per share fell from 12.05p to 9.63p. The shares fell 25p to 284p.