The director of haulage and warehousing firm Wyvern Cargo says its latest financial results are better than they might have been, thanks to the introduction of fuel escalators into its contracts. John Probert says the first six months' trading of its latest financial year at the Poole, Dorset-based firm produced figures that were below expectations, but stresses it has "reversed the trend" to boost turnover by 10% over the corresponding period last year.
He explains that Wyvern learned
its lesson three years ago when spiralling fuel prices could not be absorbed in the absence of fuel price controls in its contracts with customers. During the financial year ending 31 March 2006 Wyvern Cargo made a pre-tax profit of £114,000 -down £59,000 on the previous year. However, its turnover rose more than 7% to almost £12m. Operating profit fell from £310,000 to £266,000 the director's report blames "a continuing period of high oil costs".
Probert says its warehousing business was not fully utilised either, adding: "You can't specify a reason most of our traffic is short-term storage. We haven't lost a contract it was just a little bit quieter than usual. "As far as fuel prices go, we're a little bit insulated from that with the fuel escalation clauses. Customers understand we work on quite narrow margins and can't absorb raw material costs when they are going up so much. It wasn't the best of years," he concludes, "but we're fighting another day."
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