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The new management team at Woodward Foodservice believes it is on track to move into profit after years of losses. Chief executive Andrew Ramsden said changes he had implemented last autumn would deliver a profit in the year to March 2009.
The company has just reported losses of £32.8m for the year to March 2007, and he said the changes would bring the loss down to less than £10m for the year to March 2008.
Ramsden said he inherited a company that was "fundamentally broken" when he took charge last April. Mounting losses had led to a cashflow crisis in the company, the previous chief executive Ed Hyslop had just left, and it was in the midst of trying to integrate its recent purchase, DBC, into the company.
He said: "The credit squeeze had begun to affect DBC, so my first action was to separate the two companies and appoint DBC's finance director Chris Horne as managing director. His brief was to bring DBC back to where it was before the takeover." A separate business unit, under the control of DBC's Welwyn Garden HQ, is running the £80m a year MoD supply contract that DBC took over 18 months ago.
At Woodward, he ended a number of low margin contracts and implemented cost-cutting measures that included closing four depots, and cutting 750 jobs including taking head office staff from 250 to 100. Turnover for the year to March 2007 was £160m, and Ramsden said the measures would bring that down to around £110m to £120m for the current financial year and probably less than £100m next year.
At the height of the crisis, Ramsden said service levels were in the mid to low eighties, but they had now climbed to 99.5%. Ramsden said that the company was now winning back customers at a rate of about 150 every week and that it was in the process of tendering for a number of larger contracts.
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