Addison Lee has trimmed its losses as demand for taxis in London picks up after a turbulent two years.
The cab company returned to an underlying profit of £7.9 million in the 12 months to August 2021, recovering from a £9.4 million underlying loss in 2020.
On a pre-tax basis, losses reduced from £39.8 million in 2020 to £23.1 million last year. Turnover rose from £52 million to £164 million.
The taxi firm was hit badly by the impact of lockdowns in London, which resulted in a dramatic drop in demand.
But Addison Lee said business was beginning to recover as London gets back to normal.
More recently, passenger revenue has increased 47% and the group turned an underlying profit of £5 million in the first three months of the year.
Addison Lee’s CEO, Liam Griffin, said: “With travel now returning to levels seen in 2019, we are confident that this is the start of a return to significant growth for the business.”
In October, the company announced a recruitment drive to sign up 1,000 new drivers, saying it would guarantee them £5,000 in earnings in their first month.
Faced with a potential driver shortage as it tries to ramp up its operations again, Addison Lee added extra benefits such as sick pay, maternity cover and financial support if drivers are involved in an accident to its existing pay offer.
The improving financial performance comes two years after Addison Lee, which is London’s biggest private car hire operator, was bought by a consortium of investors led by former director Griffin, son of Addison Lee’s founder John Griffin, and Cheyne Capital.
The deal went through weeks before the UK was plunged into the first coronavirus lockdown.
Since then, the leadership team has had to make “numerous tough decisions for the long-term success of the business”, the company said.
It ditched its loss-making international businesses, instead choosing to focus on the London market.
In July, it bought ComCab London, bringing the number of cars it has on the road to around 6,500. It has announced plans to move its core London fleet to electric vehicles by the end of next year.
Rival Uber has reported similar signs of improvement: earlier this year it posted an operating profit in its second quarter as demand for its ride-hailing service approached pre-pandemic levels.