Eddie Stobart turnover down, but Stobart Group sales up

Stobart Group benefited from the £61m disposal and leaseback of its 528,000ft2 distribution centre in Widnes in March on its way to posting turnover of £447.7m in the most recent financial year.

The parent firm of road transport giant Eddie Stobart saw profit rise by 59% to £36.8m, while turnover increased by 3.9% to £447.7m, for the 12 months ending 28 February 2010.

However, Eddie Stobart's contribution to overall turnover was down £5.8m on 2009, from £387.3m in the previous year to £381.5m. But it still accounts for approximately 85% of revenue. The division increased its underlying operating profit (EAFFC - Earnings After Fleet Financing Costs) to £26.4m, from £24.5m in 2009.

The company says the bad weather in January cost Stobart some £500,000.

Chief executive Andrew Tinkler says: "We are happy with the results we have delivered during one of the biggest economic downturns in history.

"Our strategy has always been to give a service offering that covers all forms of transport, and yes, we have done quite a lot of acquisitions, so getting them all bedded in and getting the efficiencies on the bottom line have been helpful. And we have assets on our balance sheet that are under-valued at this time. We are not just a transport company."

Tinkler says Stobart benefited from the sale and leaseback of the new northern distribution centre for Tesco's fresh operations - to Legal & General Assurance (Pensions Management) for £61m.

"Our asset was in what we feel was the right location. We have sold it and taken it back on a long lease. The strategy is to really understand our customers' business. We give them what they want for their needs," he adds.

"We had an £8.2m gain on the asset sale and I am not saying that is a one-off. We have other assets that can be delivered. It might not be every year, it might [be every] two years."

He singled out Stobart's recent contract with Tesco - which saw it win the transport operation from the supermarket's Middleton, Manchester, site from incumbent provider Wincanton from 21 March - as well as a three-year, £60m ambient transport contract for the majority of Unilever's manufacturing and distribution activities in the UK as constant revenue stream sources for 2009 and beyond.

He also pointed to future efficiency gains in Stobart's fleet. It is currently running at 83.7% capacity utilisation, which has not grown from the previous year. Tinkler blames this on the recession and integrating new business that was "not up to our efficiency standard".

He adds that capacity utilisation could not get above 90% because there would always be empty miles.