Investment in London and international expansion see Addison Lee Group revenues grow by almost one-third in last financial year
Addison Lee Group’s* (‘ALG’ or ‘the group’) transformation from a London private hire business to a global premium ground transport provider has fuelled a year of record revenue growth and robust underlying profitability.
The company’s revenue increased by 31% to £345.8m ($484m) in the year ended 31st August 2017, representing a step change in scale as recent acquisitions contributed to the business’ financial performance as well as increased sales in its core London market.
Adjusted EBITDA was up by 3.2% to £57.8 m ($81m), following a year of investment in group technology, customer management and operations capabilities.
After factoring in depreciation, amortisation, and debt servicing, the company recorded a pre-tax loss of £20.8m ($27.9m), in line with budgeted forecasts and reflecting a period of intense long-term investment, acquisition integration and reorganisation, which include £18.6m ($25.6m) of exceptional costs incurred in the year.
Andy Boland, Addison Lee Group’s Chief Executive, said: “For Addison Lee Group, 2017 was the year our London business returned decisively to growth and our focus became investing in and building the world’s leading managed ground transportation business.”
He added: “We’ve made a strong start to the new financial year, with Q1 revenues up 23% and set to top £400 million for the current financial year. At the current rate of growth, we expect to double the size of Addison Lee Group in the next three years.”
Year ended 31st August
Pre-tax (loss)/ profit
Review of the year to 31st August 2017
During the financial year, ALG built a global business across three continents, with a hallmark of quality, reliability, comfort and industry-leading premium service throughout its network. Investment in technology has been central to this expansion.
In its core UK market, ALG has returned to consistent growth in a very competitive market place. The focus on creating and sustaining a differentiated premium service for business passengers and customers has led to revenue growth of 11%.
This growth has been supported by investment in group capabilities in technology, customer service management, data and analytics and the establishment of a new operations centre for our London fleet and driver support services, as well as a new customer services operation in Peterborough.
As part of a strategy of growing and diversifying income streams, the group results include a first full year’s contribution from Tristar, an executive car business operating in the United Kingdom, United States and Hong Kong which was acquired by the group in June 2016. The results also reflect a part-year contribution from Flyte Tyme, a leading United States car service business, acquired in December 2016.
The start of the financial year saw the re-branding of the Addison Lee business in the United Kingdom and, following its recent acquisitions, the group now operates with two brands globally; Tristar, for chauffeur driven, specialist and executive car services, and Addison Lee, for premium car services in major cities, including London and New York.
Quarter ended 30th November 2017
Addison Lee has enjoyed strong start to the new financial year, both in the United Kingdom and internationally. Group revenue rose by 23% to £99.8m in the quarter to 30th November 2017, with double-digit rises in both the United States and United Kingdom, where the Addison Lee consumer business has been particularly strong
Addison Lee Group further built its international offering after the financial year-end by purchasing Tandem Technologies, provider of software for corporate car bookings in New York. Tandem’s software is used by businesses in New York and the acquisition strengthens Addison Lee’s platform for expansion into New York’s $2.2 billion car service market, allowing business customers to book cars through the company’s digital channels.
Since the start of the new financial year, ALG has signed significant new contracts for its managed service proposition in the United States in the airline, investment banking, professional services and marketing services sectors. Provision of digital platform and mobile app booking capability, alongside a dedicated ALG fleet and end-to-end passenger service support, has been key to this success.
Global traveller service
In January, Addison Lee unveiled its new global product, allowing customers to book executive car services in over 100 cities around the world through its app and website, reflecting the international travel patterns of Addison Lee’s customers. This premium service, designed for global business travellers, booked via digital channels and fulfilled through a vetted partner network, is fully supported by the ALG global service delivery team.
New vehicle technology
ALG is leading a consortium in London to evaluate the impact of new vehicle technology, including the introduction of autonomous vehicles, into the Royal Borough of Greenwich, supported by United Kingdom Government funding from Innovate UK. The group is also currently partnering with autonomous vehicle (AV) technology partners to test inclusion of AV into the ALG operating model and connected vehicle technology.
Using its’ international presence, premium managed service and digital technology, ALG is well positioned to demonstrate strong growth in revenue and profitability in a global market that is growing and consolidating. The group is confident of a strong financial performance for the year to 31th August 2018, with annual revenues expected to exceed £400m. Through a combination of organic growth and acquisitions in the UK, the United States, Europe and Asia, the company is set to double in size within the next three financial years.