Rygor Group Services (RGS), the distribution arm of the Rygor Group, increased sales by 8.5% during the year ending 30 April 2008, from £12.2m to £13.3m, but saw pre-tax profit drop from £86,985 to £51,271.
The Wiltshire-based firm says the main reason for the fall in profit was increased administration costs "that have now been controlled". These consisted of extra management costs as a result of the group's MBO by Tim Stacey, Paul Reed and Graham Drake, from the Rygor family last July.
Graham Drake, finance director of the Rygor Group, which also consists of Mercedes-Benz dealership Rygor Commercials, tells MT: "During the course of the year and subsequent to the year end, the distribution business has withdrawn from sectors that were not generating sufficient contribution."
According to Drake, the withdrawals were largely in the construction sector and have resulted in a reduction of the fleet by more than 25% - from 105 to 75 trucks - by the end of February 2009. He adds: "This has enabled the management to focus on delivering service to its customers and efficiently managing the fleetso that it is well placed to deal with the current economic situation."
However, RGS has won two new contracts to replace the construction work: one with timber products firm Timbmet and one with bubble-wrap manufacturer Samsetsu.
Overall, 2008 pre-tax profit for the whole group increased 58% to £549,201. Drake says despite the recession, financial performance for the group for the current year shows an improvement on 2008. "Volumes are down, but it's a matter of making sure your costs go down as well," he adds.
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