Contracts boost for haulage firm Eddie Stobart

Oct 23 2009 by Iain Laing, The Journal

THE owner of the Eddie Stobart haulage business has said contract wins and cost reductions should help it deliver a strong second half of the year.

Carlisle-based Stobart Group’s pre-tax profits for the first half – covering the six months to August 31 – were flat at £11.1m but rose £1.4m to £12.4m when restructuring costs are stripped out.

Volumes have been boosted by new contracts with Tesco and Nestle and the launch of rail services such as the distribution from Valencia to the UK of temperature-controlled fresh produce.

Stobart, which has operations covering road, rail, ports and air, has weathered the economic storm because two-thirds of its workload involves food and drink, where business volumes have been resilient. Analysts also believe its pay-as-you-go business model has enabled the business to retain existing customers.

The company said its fleet of 1,600 trucks boasted one of the best the utilisation levels in the industry, with the rate in the UK at 83.5%.

As well as contract wins, the company has focused on cost efficiencies following recent acquisitions, such as last year’s addition of Innovate Logistics, which gave Stobart its first chilled service offering.

Stobart has boosted its air capability with the purchase of Southend airport. A railway station at the airport is due to be completed in 2010, resulting in a 49-minute link to London.

Stobart has also acquired a 460-acre site in Carlisle which contains the operations of Carlisle airport, allowing it to move existing operations in the area onto one, purpose-built, site.