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Universal has salvaged its profits

UNIVERSAL Salvage has cut its operating losses by almost £3m, made a pre-tax profit of £1.5m and is “firmly back on the road to recovery”.

In a preliminary results statement for the year to April 30, 2005, chairman Alexander Foster says the company has made significant progress in implementing its business turnaround plan, and enters the new period financially and operationally stronger. The focus is now on business development.

“We’ve delivered on all of our key financial objectives this year ahead of budget,” says Foster. “We’re now proceeding with the second stage, which is to rebuild volumes, contain costs and return the business to profit.”

He adds that new managing director Avril Palmer-Baunack is building a strong team and driving the business forward with “determination and vision”. Rationalization of the branch network is complete and cost saving measures implemented.

Palmer-Baunack adds: “While operating costs have been reduced, the business remains capable of handling significantly higher vehicle volumes than we currently process.”

She admits Universal Salvage needs to “restore our credibility” and attract new business. In June, she signed a 12-month contract with Admiral Insurance, which is worth an estimated 6,000 units, and she has formulated a ‘target list’ of motor insurers with which she wants to build relationships.

This month its board created a new post of chief operating officer and appointed Matthew Briggs, who has substantial insurance and accident management experience.

Palmer-Baunack believes there are good opportunities for Universal Salvage in disposing of low-value trade-ins for dealer groups and end-of-life vehicles for manufacturers. She also wants to provide services to a broader range of customers, including self-insured fleets operated by major corporations, car rental companies and accident management companies. Universal Salvage estimates this to be a source of 400,000 salvage vehicles annually.

  • Key points of Universal Salvage results: turnover £49.7m (2004: £48.4m); gross margin up from 18% to 20%; operating loss before exceptional items cut to £1.1m (£2004: £4.0m); exceptional charges £1.0m (2004: £5.1m); profits on fixed asset disposals £4.5m (2004: nil); profit before tax £1.5m (2004: loss before tax £9.6m).
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