Salford Van Hire in the red after tough year

HIGHER costs, tough trading and the fall in the resale value of used vehicles pushed Salford Van Hire into the red last year.

Newly-filed accounts for the family-owned Manchester company show that the firm generated record sales of £52.8m during 2009, but made a loss of £791,012.
In 2008 the company, founded in 1965, made a profit of £1.8m.

Losses on the sale of cars and vans no longer in use were £2.4m, compared with a profit of more than £600,000 in 208.

Salford rents cars, vans and trailers to the public, businesses and haulage companies. Its fleet is made up of more than 6,000 vehicles. It operates from two sites in Manchester and one in Leeds and also has a sister company in Florence, Italy.

The Italian business, Program Di Autonoleggio, launched in 1984 and run by founder Raffaello Bacci’s daughter Patrizia, grew 38% last year, from £6.7m to £9.3m.

Sales in the UK fell 5% from £45.8m to £43.4m, in what the company described as ‘very difficult trading conditions’.

Interest payments on borrowings of more than £70m fell from £4.1m to £3.1m as the Base Rate fell during the year.

In their report to the accounts the directors say they are expecting further growth in the Italian business.

Commenting on the performance they added: “The group achieved another record year for sales, however increases in costs in an increasingly competitive business environment and losses on the disposal of vehicles due to a fall in the values of second hand vehicles, have eroded the margins resulting in a loss.

“Finance charges have decreased during the year reflecting both the reduction in additions to motor vehicles and reduction of interest rates due to the fall in the bank rate.

“The directors are confident that turnover will continue to grow at a steady rate in the future and current year sales figures are encouraging.”