City Link recovery plan on track

City Link, the express parcels carrier, has a five-year recovery plan after experiencing heavy losses in 2008. In 2009, the firm managed to reduce its operating loss, and was able to return to profitability in the last quarter. The fourth quarter (Q4) of 2009 had a profit of £2.7m, compared to a loss of £4m in 2008’s fourth quarter.

City Link’s turnover for the whole year fell from £381.9m to £353.1m (7.5%), but the revenue in Q4 was £100.9m, up 3.8% on 2008 Q4’s £97.2m.

City Link blame “difficult economic conditions, pricing competition and the full-year effect of poor service in 2008” for their decline in turnover.

City Link’s five year recovery plan is based on the fact that they do not want to lower their rates to a level that is unsustainable, saying that other UK parcel companies are cutting their rates to suicidal levels.

In December 2009, City Link’s MD, Stuart Godman, said that the company was “a year to 18 months” ahead of the five-year recovery plan, so these new figures will have hopefully bumped that up a little more.

HGV / LGV driving businesses have been hard hit by the economic crisis, but City Link’s long term plan is surely a step in the right direction, ensuring that their short term success is not followed by longer term disaster.