Everything we eat, drink and wear depends on road haulage services. There would be no homes to live in or jobs to go to without trucks or the companies and drivers that operate them.
Its output is estimated at £124bn per year, generated from total assets of £53bn. According to the Road Haulage Association, it employs 2.5m people, making it the fifth largest employer. There are some 600,000 goods vehicle driving licence holders and almost half a million commercial vehicles over 3.5 tonnes are registered in the UK.
Covid and Brexit hit the sector hard, severely disrupting distribution patterns in a number of key customer sectors, such as retail, hospitality and construction.
It has created staffing challenges and added significant bio-security costs. 69% of all haulage businesses furloughed workers during Covid. By the end of September 2020, output was still only at 83% of pre-pandemic levels based on figures from the Office of National Statistics. This is prior to the ending of the Brexit transition period.
Research by the financial health monitoring specialists, Company Watch has identified that the sector had weak financial characteristics even before the pandemic started. Out of almost 29,000 road haulage businesses registered at Companies House, almost 40% (11,331) are in the Company Watch warning area with a health rating (H-Score®) of 25 or less out of a maximum of a hundred, indicating a one in four risk of failing within three years.
The analysis also highlighted worrying levels of borrowings. Gearing is perhaps inevitable in an industry that is so fixed asset dependent, but total debt is £14bn against overall net worth of £14.3bn, so that average net gearing is 98%. This would cause serious financial stress even in good times, but with profitability under such pressure in the crisis, it effectively puts the destiny of many road haulage businesses in the hands of their lenders just when they are reducing their risk appetite ahead of the easing of government financial support measures.
This research is based on company accounts filed for periods that almost exclusively pre-date the pandemic. The availability of government-guaranteed loans since then (which have been taken up by around 36% of all UK businesses) will have made the gearing issue even more critical for road hauliers.
We can assist you in seeking new funding opportunities to support your operations.
We can conduct a financial review of an organisation’s position and any areas of concern.
We can assist you in finding merging partners or exploring potential sales opportunities.
We can advise you on any cash flow issues you may be experiencing and assist with debt management strategies and repayment terms.
We can help you to enact positive, long-term change and improve the financial and operational running of your organisation.
If it is required, we will work with you to wind-down your organisation in a controlled way that supports your services and objectives.
Partners and staff across all the Opus service lines have extensive experience and knowledge of the road haulage sector.
Ways in which we support companies, business owners and their management:
If you would like to hear more about how we can help your business to best manage any current challenges, please contact us at roadhaulage@opusllp.com or call us at our nearest office to you.
A driver shortage in the trucking industry is nothing new. From the very start, the job has been seen as an unattractive option with its long and anti-social hours, primitive working (and living) conditions and poor job satisfaction. The current statistics for road haulage drivers There are just over 400,000 registered HGV vehicles according to the Road Haulage Association (RHA),
The road haulage industry has a significant environmental impact. The transport sector is responsible for more than a fifth of total global CO² emissions, of which road transport accounts for 15% of the total. Around 30% of transport emissions come from road haulage, or around 5% of all global emissions. It bears a heavy responsibility to play a part in
With small trading losses eroding the balance sheet, this road haulage business was under immediate threat from unpaid tax bills. Opus worked with the owners to manage the expectations of HMRC, funders and suppliers whilst using its restructuring and M&A expertise to achieve a better outcome.
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