Trend Is Set as Most of UK's Largest Logistics Firms Now Foreign Owned; MOST BELIEVE M&A ACTIVITY IN THE SECTOR WILL INCREASE

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Byline: SION BARRY

THE majority of the UK's largest logistics companies are now overseas owned and account for the greatest share of turnover with further industry consolidation predicted, according to research from Barclays Corporate and Grant Thornton.

Overseas ownership of the top 50 UK logistics companies has grown to 52% over the past five years, with their turnover now equating to 69% of the top 50's total turnover, a jump of more than 40% over five years.

Barclays Corporate and Grant Thornton carried out research looking at the changing composition of the top 50 UK logistics companies, surveying key decision-makers from UK logistics businesses on their views of the industry.

The research shows that 58% of respondents believe M&A activity in the sector will increase over the next 12 months, with more than a third of those companies surveyed actively planning acquisitions.

Philip Bird, corporate finance director at Grant Thornton said: "Many mediumsized logistics firms need to consider mergers or acquisitions to avoid being squeezed out by major operators offering economies of scale or niche players offering tailor-made solutions.

"UK logistics firms need to be more successful in expanding overseas if they want to remain independent. After all, more than two-thirds of the UK's top 50 total turnover is generated by firms based outside the UK." Cost inflation is seen as the biggest issue facing the sector over the coming 12 months, which could see businesses reassess their commercial relationship with customers. Supply chain disruption ranks low, with 66% of those surveyed stating they are not reassessing their business plans in light of recent geopolitical and natural disasters.

Over three-quarters of respondents will be investing in vehicles over the next 12 months, which can be seen as a result of rising fuel costs. Some 83% of businesses are concentrating on improved vehicle efficiency as a measure to counter rising costs. …