Inter Link in red over distribution switch

Inter Link Foods boss Chris Thompson has admitted that the firm's failure to bring in external expertise to help manage its recent transition to a centralised distribution system was a fundamental mistake. He warned that the distribution switch would push it into the red for the year.

Thompson said: "I put my hands up. We probably under-resourced the whole thing and we didn't have sufficient experience in-house to handle it properly. It was a very complex process and we probably should have brought in external experts as we didn't have the management time or skills within the business to do it properly."

Inter Link has been transferring customers to a new national distribution centre in Warrington managed by Christian Salvesen for several months. However, the process had taken longer than originally anticipated, resulting in cost duplication, poor vehicle utilisation, poor service levels and lost sales, said Thompson.

"It was a massive move for us, not least because we had some major systems issues in integrating our systems and Christian Salvesen's. Having said that, there is no question that it was the right thing to do."

He added: "Our service levels are now consistently high. It's just taken us longer to get there than we originally anticipated. The new business will come in, but later than we expected."

After exceptional costs, Inter Link posted a £1.6M loss on sales down 6.8% to £62.6M in the six months to November 4, 2006, and would not now meet current market forecasts for the financial year ending May 5, said Thompson.