LOGISTICS firm Malcolm Group has sealed a £50 million deal with a trio of banks to fund its expansion plans, as it targets growth at its haulage, rail and waste management businesses.
Chief executive Andrew Malcolm said that he had signed up Barclays, HSBC and Santander to provide the funding, which will refinance the company’s existing lending and provide working capital for his growth plans.
Malcolm said he “wasn’t scared” of making acquisitions but that he would continue to focus on organic growth, such as recently winning a contract from Nestlé to distribute its confectionery around the UK.
He told The Scotsman: “It’s great to have a five-year funding plan in place so that we can now concentrate on growing the business.”
His comments came as the Renfrewshire-based group posted an 11.7 per cent rise in turnover to £190.3m for the year to 31 January, thanks to growth at its logistics and construction services businesses.
Malcolm said the firm was benefiting from the booming whisky industry by transporting goods for the biggest distillers, including Johnnie Walker-owner Diageo, Glentlivet-maker Pernod Ricard and Glenfiddich-producer William Grant & Sons.
He said that the company had also won a great deal of work by transporting biomass, a new sector for the firm, which has included shifting wood chips and cardboard waste. Malcolm added that the company’s construction services division had won business through its waste management services, taking debris away from sites and recycling it.
Pre-tax profits at the group also rose, by 11 per cent to £4.5m, with net debt cut to £19m from £20.5m a year earlier.
The group, which was founded in the 1920s, pumped £11.4m into capital expenditure last year and Malcolm said some of the bank funding would go on new lorries for his fleet.
The business employs about 2,000 staff and has 450 lorries and 1,000 trailers. The group has three depots in Scotland, along with six south of the Border and three rail terminals. In the current financial year, Malcolm said that the firm was continuing to see increased demand for its rail freight services.
He noted that turnover and profits were ahead of expectations in the current financial year.
Malcolm led the £70m management buy-out of the business alongside his brother, Walter, in 2005, which saw the group taken back into private hands.
The brothers’ father, Donald, had sold the family business to Glasgow-based Grampian Holdings in 1960. Grampian was renamed Malcolm Group in 2002 following the sale of Edinburgh Woollen Mills.
Donald Malcolm was just 14 in the 1940s when he inherited the family business, which consisted of a single truck and a horse and cart.