Warehousing and logistics giant Unipart has suffered a major slide in its fortunes, new figures have revealed.

But chief executive John Neill said he was optimistic about the future and paid tribute to the workforce for overseeing massive changes in the last two years.

The Oxford-based company has lost lucrative deals with car makers Rover and Land Rover, but replaced them with a wide range of retail and hi-tech contracts.

Stripping out banking and reorganisation costs, the firm reported an operating profit of £14.4m for the 12 months to the end of June 2003. This compared with a profit of £41.3m for the previous 18 months.

Management said the equivalent like-for-like figure for the previous year would have been about £25m, but had been measured over 18 months to accommodate the loss of the Rover and Land Rover contracts.

Mr Neill said: "We have taken a business in fundamental decline -- where almost all the profits were derived from Rover -- and transformed it into one that has significant growth potential.

"Those on the shop floor have won the business that has secured the future of Cowley. The prospects are good for job growth, with more contracts expected."

The Rover parts distribution and warehousing contract comes to an end in April and all 150 workers involved have been offered contracts for retail distribution work, or the option of taking redundancy packages.

The new deals will mean more pay but also an increase in working hours and five-day shifts, which will see Saturdays and bank holidays classed as normal working days with no overtime.

Although the exact number transferring has not been calculated yet, Mr Neill believes the "vast majority" will stay with the company, which employs 1,100 people at Cowley, making it the area's biggest British-based employer.

In recent years Unipart has become a warehousing distributor for major retail chains such as Boots, Homebase and Halfords, as well as mobile telephone firms such as Vodafone and Hutchison 3G.

It has also retained a contract with Jaguar Cars and recently secured a deal with Network Rail to supply and deliver materials for the West Coast Route modernisation programme to upgrade the main line from London to the West Midlands, North West and Scotland.

Mr Neill added: "We expected all along that 2003 would be difficult and 2004 would be challenging. By 2005 we expect to show more respectable profits."

The share price of the unquoted company, which employs 8,500 people worldwide, is 36p -- down 1p from last year.