Cramlington phone company is relaunched

Posted by The Journal on Nov 13, 09 10:43 AM in News

Ian Gillespie of Fone Logistics The region's biggest mobile phone firm has been reformed as a new entity with founder Ian Gillespie back at the helm, in a move which it says will increase profits, despite leading to a plunge in turnover.

Cramlington-based Fone Logistics, which three years ago generated £100m-a-year in revenue, said its relaunch would ensure it made more profit on a reduced annual turnover of around £50m.

The transfer of the company's assets to the new trading company called Fone Logistics Limited has been described as "corporate housekeeping".

Three years ago company founder Ian Gillespie sold two-thirds of his share of the 13-year-old business but he is now back in charge and taking a more hands on role.

Finance director Michael Fitzpatrick said the firm had now shifted its focus from individual customers to the SME market which, although generating less transactions and therefore less revenue for the business, would deliver more profit.

He said: "We did a bit of housekeeping. We haven't hurt anyone and we haven't not paid anyone. We have started a new company and that company has acquired the trading assets of the existing company."

Managing director Ian Gillespie, who built Fone Logistics into one of the fastest growing firms in the North East after setting it up in 1996, said: "It is not a secret that, for some years, the corporate structure of Fone Logistics has been out of kilter with where the business is at in its performance, and with our future aspirations for it.

"The structure that has been in place has held us back to some degree but this transaction resolves this and will allow us to kick on and do the things we want to do.

"The plan three years ago was for me to take more of a back seat in the day-to-day running of the business but since then, with my reacquisition of the share capital and the economic climate the way it is, things have changed.

"So, for the future well-being of the company and its employees we have performed this transaction to improve our position and create greater stability."

Two years ago Fone Logistics saw its turnover plummet from £100m to £79m in a year in which it lost a major contract with Vodafone and sold 14 shops.

The company is now hopeful of landing new contracts in the coming months after being named by O2 as its best distributor in the third quarter of the year.

In 2007 Mr Gillespie was a runner up in the North East Business Executive of the Year award run by The Journal and its sister paper, Middlesbrough's Evening Gazette.

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