Losses rise at Yodel

The operating loss at Yodel Delivery Network increased to £81.9 million in the year to 30th June 2017 from £49.4m the year before. Revenue was down from £422.7m to £409.8m.

Arrow XL, Yodel’s sister company which focuses on 2-person home delivery, saw operating profit rise from £2.7m to £2.9m for the period. Revenue was marginally down from £82.9m to £82.6m.

EBITDA at Yodel, which does not include exception items but does include the share of results from joint operations, declined from a loss of £14.7m in 2016 to a loss of £26.9m in 2017.

The company said this was down to a volume shortfall caused by client losses that were only partially offset by new business. “This has also resulted in an impairment charge of £20.6m being recognised against goodwill.”

Exceptional items of £39.2m in 2017 included restructuring costs of £18.6m, as well as the £20.6m goodwill impairment. This compares to restructuring costs of £12m and a £2m onerous contract charge in 2016.

In December, Yodel bought the 50 per cent of the CollectPlus business (Drop & Collect Ltd) that it did not already own. This made an operating profit of £2.8m in the 65 weeks to 30th June 2017, while revenue was £69.4m.

Andrew Peeler became chief executive of Yodel in January 2018, taking over from Mike Cooper who moved to Eurostar. Dick Stead, who had been executive chairman of Yodel since 2012 retired from the business in January 2018.

CollectPlus chief executive Neil Ashworth was appointed chief commercial officer of Yodel in November last year, while maintaining his position at CollectPlus.

Looking ahead the company said there had been downward pressure on pricing generally in the industry.

“The directors expect that the Yodel financial result for the year ending will again be challenging, however, the Yodel business is now focused on delivering a number of key financial initiatives that are expected to set the business on a profitable trajectory.”

Arrow XL was affected by a fire at its Worcester hub in April last year. This was its prime delivery operation and handled some 43 per cent of its delivery volume. Up to that point, it said that the business had been outperforming both budget and prior year results.

In the immediate aftermath of the fire it used a warehouse in Chepstow to get deliveries moving again within a week of the fire. Since September, it has been using a medium term replacement site in Droitwich.

It said that its preferred long-term solution is to rebuild the Worcester site to include a high-bay warehouse.