Stobart Group has shaken off a tough start to the year by revealing a 7.2% improvement in the profitability of its transport operations, and a 13% leap in turnover driven by the addition of Autologic.
For the 12 months ending 28 February 2013 turnover at Eddie Stobart rose to £517.1m, compared to £459.2m in the previous year. Operating profit in Stobart Group’s transport and distribution division increased from £27.7m to £29.7m.
In January Stobart revealed it would close its chilled business; sell Autologic’s vehicle services business and restructure its board of directors in a move that saw former Autologic MD Avril Palmer-Baunack become chairwoman.
She would only stay in the job for three months until a boardroom shake-up saw her step down.
Chief executive officer Andrew Tinkler, said: "Despite a turbulent year and a tough economic environment, our continuing operating businesses have produced a profit from continuing operations 10% up on last year and have again given us a good return on investment.”
He added: “Our management team is now focused on realising value from the investments made over the last few years."
In his statement to shareholders Tinkler revealed that after acquiring Autologic for £12.4m in August 2012 it sold its vehicle services business to Paragon Group for £11m.
He also outlined the reasons for disposing of its chilled business – which became part of the group in 2008 when Stobart acquired the assets of Innovate Logistics out of administration.
“We envisaged the closure of two depots and a total restructuring charge in the accounts of some £8m. As we began to implement the proposed restructuring following our detailed and on-going analysis, it became apparent that this small load, multiple pick and drop business, which was principally undertaken for producers rather than retailers, was too unpredictable for a large scale operation," he said.
He added that Stobart had “carefully considered” whether there was a way in which it could “re-engineer the business processes to reduce the imbalance in part-loaded running and the incidence of small drops”.
According to Tinkler the analysis showed that Stobart could not make this business profitable at “the rates that our customers were prepared to pay”.
Its chilled pallet consolidation business closed posting a loss for the year of £13.4m.
