Interim Results for the six months ended 31 August 2010
Stobart Group (Stobart) is one of the UK’s leading providers of multimodal transport and logistics solutions offering road, rail, sea and air transport. The Group also provides warehousing, storage and handling facilities, and supply of biomass products.
Revenue from continuing operations up 11.7% to £243.7m (2009: £218.2m)
Earnings after fleet financing costs (underlying EAFFC*) up 25.9% to £17.0m (2009: £13.5m)
Normalised profit before tax from continuing activities up 24.2% to £15.4m (2009: £12.4m)
Profit before tax up 38.7% to £15.4m (2009: £11.1m)
Earnings per share from continuing operations (normalised before restructuring costs and allowing for a 28% tax charge) up 16.2% to 4.3p (2009: 3.7p)
Interim dividend of 2.0p (2009: 2.0p) per share payable on 10 December 2010
Net cash generated from operations of £13.6m (2009: £19.7m)
Underlying EAFFC comprises the underlying operating profit of £18.9m (2009: £15.8m) less fleet financing costs of £1.4m (2009: £1.9m) and share based payments of £0.5m (2009: £0.4m).
PBT before restructuring costs of £nil (2009: £1.3m).
Eddie Stobart commences several significant new agreements:
new £25m per annum chilled distribution business for Tesco
additional agreement with Britvic increasing business
new £7m per annum contract with A G Barr
new €18m per annum business with Tesco Ballymun, Ireland.
Major contract renewals in Eddie Stobart for Procter & Gamble, Gerber, Knauf and Crown.
£30m investment in a 50% interest in Stobart Biomass Products Limited in March 2010 and further £1m invested to enable that venture to acquire the business of Amenity Horticultural Services Limited in July 2010.
New railway station and control tower at London Southend Airport near completion with advanced discussions ongoing with interested airlines including Aer Arann with whom we have agreed a conditional five year operating agreement with volumes expected to grow to 300,000 passengers per annum.
Securing of £100m 10 year development finance with M&G UK Companies Financing Fund.
Andrew Tinkler, Chief Executive, comments:
"We have again shown strong growth and resilience in the business with underlying profits up 24%. Eddie Stobart has performed particularly well after contract wins with Tesco, A G Barr and others which have added volume and margin and there is further growth to come from these contracts. Changes in the way our customers operate have provided challenges to us which we are addressing. In particular we have faced shorter lead times and volatility in volumes. In the long term we are well placed to take advantage of these changes in the market.
"Exciting developments include the biomass link-up with A. W. Jenkinson Forest Products, the major improvements at London Southend Airport and agreement with Aer Arann. We are talking to other significant potential customers in both of these businesses.
"We have slightly reduced our full year profit expectations as a result of reduced spend by Network Rail and increased overall finance costs. We are also cautious that 2011 may see volumes affected by the increase in VAT rate and the Government spending review. However, in the long term we see this as positive for the economy and our business. Overall, we look forward to further growth in the second half as new contracts fully contribute. Our efficient green fleets and innovative transport solutions continue to impress customers and our improved assets give excellent opportunities for adding value."