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Christian Salvesen finds Spain a tough environment

12 April 2007

Christian Salvesen appears to be following in the footsteps of its rival Wincanton by encountering tough trading conditions in Spain, where volumes have been lower than expected.

The high-profile European logistics provider is also turning the spotlight on its UK transport operations. It admits that forthcoming results for its domestic operations will reflect an increasingly challenging market.

In a pre-close trading statement Christian Salvesen says its year-end results are expected  to be in line with market expectations and revenue growth will be around 10% in the second half of the company's financial year.

It adds that it has performed strongly in its UK food and consumer sector, but converting revenue growth into profits within transport operations remains an elusive goal.

A statement from the company explains: "The programme of restructuring to improve efficiency across the group is continuing, with particular focus on our UK and Spanish transport businesses and the European food and consumer business.

"This will result in restructuring costs of around £4.5m in the second half of the year just ended."

In a statement at the end of March Wincanton reported that it had closed down its loss-making Spanish operations and was selling off related properties.

Transport Intelligence analyst John Manners-Bell says: "The UK transport market continues to be cut-throat [and it seems] nothing fundamental is going to change  which will have a positive effect on the companies working within that market.

"Christian Salvesen has had a problem with the Spanish market for a number of years," he adds. "It looked like it had turned it around, but it's certainly a lot more fragmented than the UK market and just as cut-throat."

Christian Salvesen chief executive Stewart Oades was unavailable for comment as Commercial Motor went to press.





Chris Tindall
Email at news@roadtransport.com
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