Contract wins lift Christian Salvesen

Merger target Christian Salvesen today announced new contract wins as the logistics company looks to recover from a 15% dive in annual profits.

The group, which last week announced it was in merger talks with pan-European rival TDG, said its core businesses had performed well in the first half of the new financial year.

Recent new contracts include the logistics activities of Unilever’s ice cream and frozen foods subsidiary in Belgium and a contract from Spar Retail, also in Belgium. In the UK, work has been secured with Woodward Food Service – part of the Big Food Group – and adhesives specialist Bostik Findley.

In June, Salvesen said profits fell to £17.1m (€24.8m) after problems including the accidental defrosting of frozen peas at a warehouse in Peterborough. It has also warned of pricing pressures on contract renewals and announced the departure of chief executive Edward Roderick.

Analysts believe profits for this financial year will show an improvement to more than £18m (€26.1m) with Salvesen saying today that its performance in the six months to September 30 had been in line with its expectations. Further details are due to be released on December 7.

The company also said the benefits from investment were expected to flow through in the second half, but added that its vegetable processing division had been affected by poor weather this summer.

Salvesen employs more than 15,000 people and operates in eight European countries, including the UK, Belgium, Spain and Italy.

It added today that talks over a possible merger with TDG remained at an early stage and that there was no certainty a deal would be forthcoming.

The potential deal comes at a time of consolidation in the logistics sector, with Exel recently increasing its position with a £328m (€475m) takeover of Tibbett & Britten in June. London-based TDG has 8,000 staff at 120 sites.