|
|
|
| Review of operations – Corporate Services continued |
|
|
| |
| Ontime Automotive |
There are five contributors to our UK-based Ontime business: Ontime Rescue and Recovery, including the Fleet Assistance unit (vehicle roadside assistance), Ontime Parking Solutions (outsourced parking enforcement for local authorities), Specialist Transport Operations (enclosed vehicle transport), Prestige Vehicle Distribution (worldwide distribution of high value vehicles) and Volume Distribution (domestic car distribution).
Ontime achieved the anticipated benefit of last year’s disposal of a loss-making French car transport subsidiary. However, the full-year effect of the loss in 2006 of a major technical services contract had a substantial negative impact on the business.
Performance was further inhibited by a combination of macro and industry factors.
The strong British pound put a brake on vehicle exports to the United States while higher interest rates reduced the local consumer’s appetite for debt, affecting car production volumes. This has further sharpened competition in an over-traded vehicle distribution sector.
Significant losses were experienced in our national car delivery business, necessitating remedial action. A new management team has taken over at the volume distribution business, though the effect of the changeover will not be felt for some months.
Ontime Automotive has taken an industry lead by renegotiating and re-pricing contracts to obtain a fair return for quality service. Some business has been lost, but several important successes have been achieved.
In this challenging environment, Ontime’s turnover remained stable and the business reached break-even by year end, a neutral result that masked some pleasing performances by individual businesses, notably in the Specialist and Prestige distribution divisions. |
|
|
|
| |
|
Across all contributors to the business, management is confident that business-specific constraints to improved performance are being addressed, though industry-specific dynamics may persist for some time. Our pricing model, based on sustainable value, is achieving some success, however, creating a platform for improved performance. |
|
|
