Target Express Holdings has made a pre-tax loss of £26m for the second year in a row, but says it is very pleased with progress.
In the latest financial results, chairman David Hoare says the group is "extremely pleased with the progress achieved across all areas of the business".
Group turnover grew by 4% to £146m in the year to April 30, 2006, from £141m in 2005, but pre-tax losses remain unchanged at £25.6m.
The contrast of pre-tax losses and positive reports is explained by chief financial officer Keith Broom, who says Target Express is "aggressively writing down goodwill on its balance sheet at a £25.3m cost to the bottom-line of the company in 2006". This is down to the ownership structure, he says. Target Express is owned by private equity investors 3i and Gresham.
A high interest charge owing to the private equity financing structure cost the business £18.1m in 2006.
Broom is positive about the coming year. "Trading during the first five months of the 2007 financial year has been extremely strong, with an increase in both turnover and operating profit," he says.
Target Express has invested in the network throughout the current financial year, "relocating six depots to new, larger and improved sites," he adds.
Operating profit before the goodwill and exceptional items grew to £17.3m in 2006 from £15.5m in 2005, with operating goodwill generating a final loss of £7.99m in 2006. Gross profit grew to £74.5m in 2006 from £70.2m in 2005.
Consolidated results show net liabilities for the group grew to £129m in 2006 from £103m in 2005. The company balance sheet reports net assets of £29.2m in 2006, a drop from £37.1m in 2005.
Executive remuneration at Target Express Holdings grew by £6,000 in 2006, to £497,000, while total staff costs grew by 2.3% from £34.8m in 2005 to £35.6m in 2006. Average staff numbers including directors, grew to 1,762 in 2006 from 1,739 in 2005. While the company lost ten operations and sales staff, its management and administration employees increased by 33 to 641.
No dividends were paid during the year to April 30, 2006.
