Owens Road Services is conducting a ‘radical change’ in its policy towards buying and maintaining vehicles in a bid to reduce its running costs and maintain its margins.
The policy change, which sees Owens plan to replace a third of its existing fleet with contract hire vehicles, is revealed in the Welsh firm’s annual report.
For the year ending 30 June 2011, Owens saw turnover rise 8.2% to £32.8m (£30.3m in 2010) but its pre-tax loss narrowed significantly from £163,017 a year ago to £12,559 in 2011. However Owens gross profit margin was 15%, its lowest level for four years.
As a result, the directors statement outlines a series of cost saving measures to return the company to “a satisfactory level of profit”.
It says that a combination of refreshing the fleet with new vehicles obtained through contract hire; a driver training programme designed to improve fuel efficiency by 3% and the outsourcing of its vehicle maintenance will “improve the financial performance of the business at the same time as freeing up more working capital”.