WH Malcolm reported a 35% fall in pre-tax profit last year as weaker demand across the logistics and construction markets hit turnover, writes Carol Millett.
The transport and construction business, part of the family-owned Malcolm Group, recorded pre-tax profit of £12.2m for the year ended 31 January 2026, down from £18.8m in the previous financial year.
Turnover fell by 13.6% to £211.3m, compared with £244.5m in 2024/25, reflecting subdued domestic demand and increasingly competitive market conditions across its Logistics and Construction Services & Waste Management divisions.
In its latest annual accounts, the Linwood-based company said lower activity levels across the UK logistics sector had affected performance, while its construction contracting business was also hit by difficult economic conditions.
Despite the reduction in revenue, WH Malcolm improved its gross profit margin from 25.9% to 28.3%. Gross profit stood at £59.8m, compared with £63.4m a year earlier.
The company said challenging market conditions and rising employment costs had placed further pressure on operating profits.
Within Construction Services & Waste Management, reduced activity in contracting was partly offset by increased volumes in waste management. Tight cost control helped improve margins in both areas, with the division’s overall performance finishing slightly ahead of the previous year.
Average employee numbers fell from 1,880 to 1,816 during the year. However, total staff costs increased to approximately £77.1m from £75.7m, reflecting continued pressure on employment-related expenditure.
Looking ahead, the directors reported that activity levels across both divisions in the first six months of the current financial year were slightly ahead of the corresponding period last year.
However, operating profits remained lower in both businesses, with further increases in employment costs, rents and business rates, alongside higher fuel prices, continuing to weigh on performance.
The company said it managed exposure to fuel price volatility through escalator agreements within Logistics customer contracts. In Construction Services, forward fuel prices are monitored and forward contracts used where appropriate. The directors confirmed that speculative transactions were not permitted.
Despite the challenging trading environment, the balance sheet strengthened, with net assets increasing to £82.2m from £75.7m. The company reported a post-tax profit of £8.5m for the year.
The directors said the group remained well positioned to pursue new business opportunities, supported by committed banking facilities extending to August 2029.
