Turnover up but profit down at Eddie Stobart

Eddie Stobart, the transport and distribution division of Stobart Group, has revealed an 8.6% drop in pre-tax profit in the first six months of its financial year, despite a 15.4% increase in turnover.

For the six months ending 31 August, Stobart Group’s transport operations reported £265.9m of turnover with £13.7m pre-tax profit, compared to turnover of £230.4m and pre-tax profit of £15m a year ago.

The Carlisle-based transport giant blames the profit hit on fluctuating volumes caused by retail promotions, which created issues in load planning efficiency - an issue it warned Commercial Motor about in May.

It says it will look to improve margins through cost reductions and efficiencies in the future, rather than “substantial growth in top line revenue” – although it revealed it had extended contracts in the six month period with the Mercedes Formula 1 team, and signed a new contract to distribute Pirelli tyres for this F1 season.

Business with Coca Cola, P&G and Tesco has also been renewed. Other highlights in the first half include raising £114m via an open offer share placing earlier this year, and the acquisition of the remaining 50% share in its Stobart Biomass Products joint venture with AW Jenkinson.

Stobart predicts significant growth in Biomass volumes in the second half of its financial year, after £2.6m of turnover and £500,000 profit was achieved in the first half.
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Overall, Stobart Group posted a turnover of £281.1m, up from £243.7m a year ago, with pre-tax profit down slightly at £14.7m compared with £15.4m a year ago.

Roadtransport.com will be speaking to Stobart Group chief executive Andrew Tinkler later today for more details on the company's performance.