Tunbridge Wells, UK: Logistics companies have a greater appetite for future mergers and acquisitions than they did last year and foresee more consolidation, according to a new survey from Carter Backer Winter and Logistics UK, in conjunction with logistics research firm Analytiqa.
The mood surroundingmergers and acquisitions is more optimistic than the first UK Logistics Sector M&A Index published in September 2020. Business leaders in the sector return an average optimism score of 6.7 out of 10 – up from 6.3 in 2020.
“Some (companies) are clearly looking to M&A as part of their growth plans as the UK emerges from the worst effects of the pandemic,” says the UK Logistics Sector M&A Index Q1 2021.
The survey shows strong interest in mergers and acquisitions – 35% of respondents say it is likely or very likely they will undertake merger and acquisition activity over the next 12 months, consistent with the responses received last year. In addition, when asked if the trend for sector consolidation will continue over the next 12 months, 92% of logistics leaders say it is likely or very likely, another small increase on last year.
“Our findings reveal that 28% of logistics companies are now more likely to undertake M&A activity than they were 12 months ago, and provide some useful pointers to the factors behind this change in attitude. According to our survey, changes in market and economic conditions, in company performance and in company strategy are the key drivers of logistics leaders’ increased interest in M&A.”
The long-established challenge of recruitment remains a concern, likely to be exacerbated by EU workers leaving the UK post-Brexit. The sector is generally pessimistic about the UK’s new trading relationship with the EU: a significant number – 67% of logistics leaders interviewed – foresee negative outcomes for their companies as a result of Brexit and post-Brexit red tape is seen as a significant obstacle to growth.
The sector is thinking proactively about new business models and strategies in response to Brexit: the findings show that 23% of logistics operators expect to diversify their services and 18% say they will restructure their operations. The sector appears confident about putting these new business approaches into effect, with many respondents forecasting increased turnover and new client wins.
