March 5, 2018 / 12:03 AM / 3 months ago

Car service Addison Lee sees profit ahead as expansion continues

LONDON, March 5 (Reuters) - Addison Lee said it would post a pre-tax profit this financial year after ploughing millions into a global expansion plan which has pushed up revenues as the firm grows in the United States.

The company, which catered mainly for business customers in London just a few years ago, has sought to widen its reach and began operating cars under its own name in New York last year.

Its 21 million pound ($29 million) pre-tax loss in the 12 months to the end of August, dragged down by investment, reorganisation and brand integration, compares with a 10.5 million pound profit in the same period in 2015/16.

But revenues rose 31 percent to 346 million pounds in the period with the company expecting to surpass 400 million in 2017-18 due to particularly strong anticipated performance in the United States.

“We are expecting that to come back into reported profit overall,” Chief Executive Andy Boland told Reuters.

The firm is London’s second-biggest private hire operator behind Uber with just over 5,000 drivers.

The city’s transport regulator is looking at plans to force private hire cars to pay the same weekday daily levy of 11.50 pounds - known as the congestion charge - for entering the city centre as do most other motorists, and may consult this year.

Boland opposes the move, telling Reuters that some rivals already subsidise fares to gain market share and that they may just absorb the additional cost, putting Addison Lee and others at a disadvantage.

“It would have an effect on Addison Lee drivers, it would particularly have a substantial effect on the thousands of local operators,” he said. (Reporting by Costas Pitas; Editing by Stephen Addison)

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