Exel Profits Up; No Comment on Possible Acquisition

Exel’s acquisition of Tibbett & Britten has proceeded quickly and has contributed to higher profits in the year just ended. The rapid integration of Tibbet & Britten avoided excessive costs and allowed Exel to achieve significant gains in synergies and business growth. Overall, revenues rose 25% to £6.344 billion ($12.137 billion) and operating profits rose at a comparable rate to £181.2 million ($346.8 million).

Contract logistics revenues rose 8.9%, but margins eroded from 3.3% to 2.5%. Europe, Middle East and Africa led the contract logistics revenues at £2.475 billion ($4.734 billion), followed by the Americas at £1.060 billion ($2.027 billion) and Asia, which posted a 143.6% increase over the previous year, to reach £246 million ($470.5 million).

Freight management saw air volumes increase 18% and sea volumes rise 26%. This contributed to a 16.1% increase in revenues and a 21.6% rise in profits.

Downsizing U.S. domestic expedited freight operations and refusing to renew low-margin business helped improve U.S. operations results.

“Exel’s management again stated that it had received no advance from any company interested in acquiring it,” said Transport Intelligence. This despite speculation that in addition to UPS, Deutsche Post World Network and FedEx were interested. That said, Exel has no major acquisition plans itself in the coming year.

In an earlier report, Logistics Today said one impediment to Exel being acquired by UPS was that both organizations were digesting significant acquisitions themselves. Exel appears to have dealt with the Tibbett & Britten acquisition and other factors that could have continued to affect its operations and profits. The Freight Management group, itself the result of an earlier Exel acquisition, has been integrated into Exel’s global operations and appears to be a major contributor, £2.433 billion ($4.655 billion) or 38% of the company’s £6.344 billion ($12.137 billion) turnover in 2004.

Of the prospective suitors, only UPS has reported its full-year results for 2004. Its consolidated revenues were $36.6 billion, and net income was $3.3 billion.

FedEx operates on a fiscal year when ends on May 31st. It’s 2004 fiscal-year results yielded $24.7 billion in revenue and $838 million in net income. Kinko’s, which the company acquired early in the calendar year, provided $621 million in revenue. FedEx’s first quarter revenues were $6.98 billion, up 23% and second quarter revenues (taking the financial reporting period to December 31st) were $7.33 billion, up 24% over the same period a year ago.

Deutsche Post World Network reported revenues of Euro 31.714 billion ($41.826 billion) for the first nine months. Deutsche Post is scheduled to release its annual results later in March.

For additional coverage of Exel, see:

Another Acquisition for Big Brown?
Can Global Logistics Services Measure Up?

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