Stobart consolidates chilled operations to cut cost

Carlisle, UK:  Stobart has restructured its fleet and consolidated some chilled distribution operations at a new site in Lutterworth, Leicestershire, to generate savings of around £2.5m a year.

The company reported revenues for the year to February 25 of £551.9m, up from £500.4m, while pre-tax profits rose by £1m to £30.5m.

Revenues at the transport and distribution division, which includes the Eddie Stobart haulage business, climbed from £475.3m to £519.5m, although underlying profits before tax fell from £34.2m to £27.4m as margins were hit by fuel price hikes and fluctuating customer order volumes.

Other cost saving measure included closing a depot in Leeds and reducing employee numbers by 282. As well as running 2,280 trucks and more than six million square ft of warehouse space, Stobart has operations covering rail, ports, air and biomass.

Stobart has restructured its fleet and consolidated chilled distribution operations at a new site

The group’s air division made an underlying loss before tax of £400,000, down from a £200,000 profit, on revenues of £8.8m, up from £6.8m, as the company completed investment in new facilities at London Southend Airport, which it described as the jewel in its crown. It said the airport was on target to achieve two million passengers annually by 2018, two years earlier than originally forecast.

Stobart, which has operations in the Warrington area employing around 1,000 staff, has proposed a final dividend of 4p, giving a total for the year of 6p, the same as in 2011. Shares gained 4.6p, or 3.87 per cent, to 123.6p as the group, which handles distribution for clients such as Coca-Cola, Mercedes, Unilever, Tesco and Britvic, said its four-year plan to realise value for shareholders announced a year ago was on track.

Group chief executive Andrew Tinkler said: “The transport division was down due to the economic environment we are in, but we are seeing the margins coming back and I believe there are opportunities to take further value.

“I am really happy with the air division, which will see one million passengers in its first year with all revenue streams ahead of target. “Our four-year plan is coming to fruition and we are ahead in a lot areas. “I believe shareholders will get a very good return out of this business.”

He said: “Each of the group’s divisions has good growth potential.” The group’s net debt increased to £166m from £156.1m a year earlier.