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Making the money

Jack Richards' last set of accounts revealed what most people working within haulage can tell you for nothing: life isn't easy. Turnover rose £600,000 for the year ending May 31, 2005, but pre-tax profit fell 11%. Perhaps as a result, the highest paid director took something of a hefty cut in their remuneration package, receiving little over £115,000, compared with £318,000 during 2004.

At the time Richards put this down to refurbishment costs at  the company's depots. Now, almost 18 months on, Brown cites taxation as another reason why its profit took a hit. By all accounts, things are still tough.

"It's looking steady," he says, cautiously. "We are making progress in terms of improving our financial performance and continuing to tighten up what we do. We are still working in a tough market and we have seen some long-established hauliers going out of business. There are issues over rates and we are still seeing pressure on drivers and drivers' wages."

Brown adds: "That means life isn't easy. However, we as a business are definitely making progress and moving forward. We are not comfortable yet and we are not satisfied yet, but the business is making progress." As founder, Jack Richards holds 75% of the company's shares, along with his son. Brown is reticent when discussing his share options, saying only: "I don't hold shares. Part of my package is that the company will be selling to me some of the equity of the business, over an extended period."

Consortiums for the future

Peter Brown is confident that one area that Jack Richards & Son can compete with the large 3pls successfully is through consortiums. The firm has been a member of the Wisbech Roadways consortium, with Knowles Transport and Garn Transport, since 1998 when it won the contract to distribute palletised food for HL Foods (now part of Premier Foods). And for the past few years it has also been part of the Pentagon consortium, which provides distribution for Lever. Brown says advancements in IT systems have allowed firms of Jack Richards' size to compete with much bigger companies.

"Working with haulage consortiums, particularly Pentagon, shows a way forward to work against 3pls and 4pls," he says. "Pentagon offers a service which gives a single point of contact, management information and IT, which would match what the 3pl would give them. To me that's a very interesting development in the market."

Brown says larger companies will subcontract a lot of its work and are getting "some very nice, risk-free margins". But consortiums are now offering much the same service without having to rely on subbies: "So, fundamentally we can offer a better service, probably at a better price, because we don't need as much margin on top of our rates as a 3pl perhaps does. It's a great opportunity for hauliers like ourselves.

"It's certainly a way forward for our business and one I want to drive through."