Oxford: Unipart profits up but warns of Brexit impact on supply chains

Unipart Group, one of Europe’s leading manufacturing, logistics and consulting businesses, has announced its financial results for the year ending December 31, 2018.

Total Group profit before interest and tax and exceptional items increased by 6.6% to £24.3 million (£22.8m in 2017) while revenue (including joint ventures and associates) was on plan at £845.4m, from £889.6m in 2017, as a result of the company exiting a small number of non-core activities.

Commenting on the results, chairman and Group chief executive John Neill said the Group has been awarded a number of large new contracts and continues to make significant investments in training employees to develop and use new digital technologies. He said that uncertainty around Brexit continued to be a concern for the company.

“2018 was a tough year for the UK economy in general with slowing growth rates, and particularly difficult trading conditions in the retail and automotive sector as consumer confidence levels declined against the backdrop of Brexit uncertainty,” he said.

“Brexit continues to be a serious short, medium and long term concern for our UK businesses. Complex, sophisticated and carefully choreographed supply chains have been developed over decades. The risk to these supply chains cannot be understated in the event of any failure to not only maintain, but improve the free flow of products, services and qualified skilled people across our borders.”

New contracts

During 2018, Unipart grew its business significantly with new contract wins and extensions to existing contracts.

The Department of Health and Social Care agreed to a five-year contract with Unipart as part of the new NHS Supply Chain. Unipart has taken on around 2,000 more people and an additional seven regional distribution centres providing transport, inventory management, customer service, inbound logistics and community delivery services. This is one of the largest logistics contracts in the UK.

In addition, Unipart won a substantial new five-year aftermarket logistics contract with Volkswagen Group, the world’s largest automotive company. The operation will service more than 900 retailers and trade partners across the UK for the Volkswagen, Audi, SEAT, SKODA, TPS and Volkswagen Commercial brands.

During the year, Unipart worked with Jaguar Land Rover to transition to JLR’s new purpose-built 1.1 million sq ft facility in Shanghai. Unipart also designed and implemented processes to handle, store and ship batteries for Jaguar’s first ever electric vehicles.

Unipart extended its contract with telecoms and internet services provider Three to provide logistics, distribution and customer services, further cementing a partnership in place since 2003.

In the rail sector, a major contract was renewed with Arriva, one of the UK’s leading train operating companies. There were also significant new wins in rail infrastructure contracts with a number of UK customers.

Unipart doubled its presence in Australia through contract extensions and new business wins, most notably the new supply chain contract in Melbourne with Yarra Trams, operator of the world’s largest tram network.