The directors of Widdowson Group have taken a 20% hit to their salaries as part of a £2m programme of company cost savings designed to return the company to profitability. In a statement, the Glenfield, Leicester-based company announced that for the year to 31 March 2009, it posted "a loss of half-a-million pounds on a turnover of £24.5m".
As part of the efficiency programme, the firm's four directors are reducing their pay by 20% for an indefinite period, with a 10% cut for managers and a 5% drop for other employees. The company says everybody has been "involved and informed of the changes" and plans to eventually reinstate the salary levels of the 350 staff. In the meantime, Widdowson has converted the reductions to a bonus scheme.
For the current financial year to 31 March 2010, the business is forecasting turnover of £22.4m, with a net profit of £100,000, and has a three-year plan in place to achieve 
a £30m turnover with a 3% net profit margin.
John Hawksworth, commercial director at Widdowson, says although the company's traditional core transport and warehousing operations "continue to support the growth of the business", the margins in both are being squeezed by increased competition and oversupply in the market.
"Our strategy is to diversify into other areas of logistics, principally contract packing and added-value services where we can develop a niche operation with improved results," he explains.
In line with this, Widdowson has invested heavily in converting 50,000ft2 of warehousing at Glenfield to become a dedicated contract packing facility. "To improve our visibility in this market, we have also joined the British Contract and Manufacturers Packing Association," adds Hawksworth.
Last year, Widdowson made 50 staff redundant, but the firm says there are no plans for further job cuts this year. MD Peter Stevenson adds: "The shareholders 
have invested in the business, the bank is fully behind us and we are now recruiting people who will add value to our business."