British express parcels carrier City Link continued to improve its financial performance in thefirst quarter of 2010 and has announced a new soccer sponsorship deal.
City Link reduced its Q1 adjusted operating loss by 27.9% to £4.4 million (€5.2 million) mostlythanks to continued cost savings, parent group Rentokil Initial announced in its first quarterresults.
The company’s Q1 revenue dropped 1.8% to £83.5 million (€98 million) even though volumesimproved by 2.2%. Revenue per consignment fell 4% due to continuing “severe price cutting acrossthe industry” in the first three months of the year. City Link expects higher revenues this yearbut no profit forecast has been issued for the parcels operator.
City Link’s customer base was broadly stable throughout the first quarter of the year with mostmajor customers uptrading modestly. Service remained consistently above the 99% target apart fromduring periods of heavy snow, Rentokil Initial commented.
As part of its depot rationalisation programme City Link closed four depots during Q1,streamlining the network to 80 locations, and is on track to migrate from two hubs to one by theend of the first half-year. Vehicle fleet numbers fell by 3.5% compared to end-2009 and totalemployee numbers were reduced by 7. 6% to 5,300 compared to December 2009. However, the company wasnegatively impacted by high sub-contractor costs during the first three months and is now reviewingthe balance between employee drivers and sub-contractors as a result.
Meanwhile, City Link is sponsoring soccer club Coventry City, which plays in the English seconddivision (the ‘Coca-Cola Championship’) in a three-year club and shirt sponsorship agreement. Thecompany became the ‘Sky Blues’ official sponsor after the club’s final home game of the season onMay 2.
“This is a fantastic opportunity for City Link as it will enable us to promote and build ourbrand presence not only in the Coventry area, but nationally. The opportunities through ourassociation, television and press coverage will help support our aims of pushing our brand furtherinto the market,” declared delighted City Link managing director Stuart Godman. “This is afantastic milestone for both City Link and Coventry City FC and we look forward to working inpartnership to build success on and off the pitch!”
Separately, City Link has strengthened its relationship with Coventry-based customer EllisonsHair and Beauty Supplies with the presentation of a joint liveried trailer. The eye catchingvehicle will be used up and down the UK to deliver Ellisons products to customers all over thecountry. The investment comes 12 months after City Link began its initial three-year deal withEllison’s.
Matt Logan, Operations and Logistics Manager at Ellisons, said: “Here at Ellisons our missionstatement is to be the hair and beauty provider of choice to the profession through deliveringinnovative products, training and exceptional service. It is for this reason it was important wemade the right decision in selecting the right carrier to deliver to our customers up and down theUK.
“We are delighted to say the first year with City Link has passed exceptionally well and we arelooking forward to our partnership continuing at least for the next two years,” he added.
Stuart Godman, Managing Director of City Link, said: “We have an excellent relationship withEllisons. As part of our contract we deliver to hairdressing salons, colleges, universities andprivate customers all over the country. As with all our customers we aim to provide the very bestin service.”
