Transport firm riding out the recession
May 13 2009 by Iain Laing, The Journal
LOGISTICS group Stobart says its exposure to the food and drink sector means it is riding out the recession in better shape than its rivals.
About two-thirds of the Carlisle-based company’s work involves the transport of food and drink, where business volumes have been protected because consumers are tending to replace premium products with cheaper alternatives.
It admitted its port operations had been affected by a fall in Far East imports, but said overall the downturn in the economy has not affected Stobart in the same way it has for many other firms.
The company said its “pay-as-you-go“ model also provided Stobart and its customers with less commercial risk.
Profits from continuing activities improved to £23.1m in the year to February 28 as Stobart benefited from strong performances in its road transport and rail divisions, as well as steady progress in ports and air.
Four strategic acquisitions in the period bolstered the result, compared with profits of £3.5m for a year earlier.
Chief executive Andrew Tinkler added: “We will grow, but we will also be mindful of risk to ensure the right decisions are made.”
Key deals last year included the acquisition of Innovate Logistics, which gave Stobart a chilled service offering for the first time, while it also developed an air capability with the purchase of Southend airport in December.
It plans a new railway station at the airport which will give a direct 49- minute link to central London. This is expected to be completed by the end of this year and will help develop passenger services along with subsequent developments to the terminal and runway.
Stobart will also pursue an option to acquire a 460-acre site in Carlisle which contains the operations of Carlisle airport and will allow it to move existing operations in the area onto one purpose-built site. The company added: “This will deliver operational savings and provide further opportunity for growth as well as supporting the air operations of the group.”
Analyst John Lawson, of Investec Securities, said: “Stobart is performing very well in challenging markets. We forecast good earnings progress in the coming years as the benefits of planned investments materialise.”
