Carlisle, UK: New chilled distribution contracts continued to drive sales at distribution firm Eddie Stobart last year but higher costs and the impact of bad winter weather hit overall group profits.
Eddie Stobart reported a 30% rise in underlying pre-tax profit to £33.6m in the year to February 28. The growth was mainly due to securing contracts with retail giant Tesco, AG Barr and Robinsons’ company Britvic.
However, the wider group saw profits fall by just over 11% to £29.5m in the period as other divisions, including Stobart Rail and Stobart Ports, did not perform so well.
Stobart group chief executive Andrew Tinkler described the result as “solid” and in line with expectations”. And chairman Rodney Baker-Bates said: “Changing trends in consumer demand and the retailers’ response to that, coupled with heavy snow forcing extensive road and rail closures, presented tough challenges to the whole logistics industry”.
Baker-Bates said the company had warned about the likely detrimental effect of government austerity measures such as spending cuts and the rise in VAT to 20 per cent. The company claims that it has been largely unaffected by increases in fuel because of price escalators “in over 90 per cent of our work”. However it admitted facing pressures from rising costs and Tinkler said the firm would remain focused on efficiency.
“One benefit of the recession has been that it has prevented us from becoming complacent and forced us to concentrate on where to reduce costs,” said Tinkler.
