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Optimism and confidence return among logistics leaders, survey shows


Merger and acquisition (M&A) activity is back on track as signs of optimism within the sector grow, according to a recently published survey jointly commissioned by Logistics UK and Carter Backer Winter (CBW), a top 50 firm of accountants.

After warmly welcoming attendees to the second Annual Logistics M&A Survey Results Webinar earlier this week (28 September 2021), Philip Bird, Partner in Corporate Finance at CBW, introduced David Wells, Chief Executive of Logistics UK.

“Logistics is changing fast,” Wells said, “Technologies like autonomous vehicles, different types of delivery channels and mode shift, and disruptors like COVID, Brexit and decarbonisation keep up that pace of change.

“Logistics UK was keen to be involved in this important business tracker as the leading business group in the sector.”

A PANDEMIC OF TWO HALVES

On the COVID-19 pandemic, Wells said it was fair to say that it had been experienced differently by companies of different sizes. Citing aggregate tachograph data, he said that the sector’s post-pandemic recovery was sluggish, although the CBW and Logistics UK research shows that confidence and optimism is returning, especially within larger businesses. Smaller operators, however, are still struggling financially and have been harder hit by the driver shortage.

“Logistics businesses are constantly evolving, to ensure that they continue to deliver for their customers,” Wells said, “Our expertise and knowledge helps guide them as they change and adapt. Research like this project helps us to ensure that we are fully informed of all the developments within the sector. The results of this study suggest that M&A activity will become much more important in the next few months.”

M&A ACTIVITY SET TO RISE

Philip Bird paid tribute to Logistics UK’s role raising the profile of logistics operators and protecting their interests during the pandemic, before presenting some of the key findings of the second annual M&A survey.

Between May and July this year, Analytiqa, the leading supply chain research consultancy, undertook on behalf of CBW and Logistics UK over 100 interviews with senior executives at logistics companies, ranging from large multinational businesses to smaller domestic operators, representing the sector in its entirety.

The survey is based on survey participants’ desire to undertake historic and future M&A activity and their historic and expected future view on valuations on those M&A transactions. This translates into a number between 0 and 100. The bigger the number is the more consolidation in M&A activity operators expect to undertake.

Bird said: “I’m very pleased to announce that the M&A index number for 2020/21 has come out at 62.8. That’s a whopping 38% increase on the 2020 Index number and I have to say that we were pleasantly surprised by the magnitude of that increase.”

The mood in M&A activity was very much about operators consolidating, diversifying and increasing their service offering, Bird said, possibly in response to supply chain break downs. Operators were undertaking M&A activity, he argued, to mitigate that risk in the future and offer their customers a more complete supply chain solution.

OPTIMISM ON THE RISE

The survey also asked participants how optimistic or pessimistic they were about the sector over the next 12 months on a scale from one to ten. For 2021 it came out at 7.1 out of 10, compared to a rating of 6.3 in 2020.

“It really is surprising given everything that the sector had thrown at it over the last 12 months and indeed continues to have thrown at it,” Bird said. “There’s an in-built resilience and optimism in the sector which will no doubt enable it to rise and supersede the challenges that lie ahead for it.”

Logistics UK members who would like to download the full report should visit the link below.

*https://logistics.org.uk/logistics-ma-survey-results

Published On: 30/09/2021 16:00:41

 



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