Retained profits in the transport and logistics sector decreased by 96.0 per cent compared to the same period a year ago, according to new figures.
In addition, the volume of bad debt owed to the sector reached over £2.8m, up 74.1 per cent compared to last quarter.
In contrast, the rate of company failures in the sector slowed over the last three months, while the number of active companies reached its highest volume for over a year, up 34.3 per cent year-on-year to 128,583, suggesting there’s a mixed picture ahead for the industry.
The report, published by Creditsafe, tracks quarterly economic developments across transport, logistics and 10 other sectors.
Retained profits for the sector dropped to £162m, and the volume of bad debt owed by the transport and logistics sector (suppliers bad debt) also showed a “worrying” upward trend with an increase of 70.8 per cent since last quarter.
In addition, the number of companies owing money to suppliers was up an equally substantial 78.9 per cent. Similarly, the number of County Court Judgments (CCJs), issued when a company fails to pay debts, increased by 37.1 per cent since the last quarter.
Data from Creditsafe in Q4 2017 showed a jump in company failures in the transport sector of 178.7 per cent – a major increase compared to past quarters.
However, there are signs of stabilisation, as the number of failures from the first quarter of year decreased 4.7 per cent, resulting in a total of 574 companies entering liquidation in Q1.
Also suggesting some rebalance in the industry are the numbers of active companies, which increased 34.3 per cent to 128,583 companies compared to the same period a year ago, and employment was also up 2.2 per cent for the quarter and 8.5 per cent for the year.