Eddie Stobart Logistics saw its turnover and profit grow in its first full trading year under the majority ownership of private equity firm DouglasBay Capital, despite what it described as difficult trading conditions in its core markets.
Filings made by Eddie Stobart Logistics show that for the year-ending 30 November 2015 the business posted a turnover of £496.5m, up 1.6% compared with £488.5m in the previous year – incorporating not just its UK activities, but those in Ireland and continental Europe.
The turnover growth came despite, the company said, margins and volumes in retail and consumer markets coming under pressure from discounters, and product volumes being impacted by a relatively wet summer compared to 2014.
A spokesman for the company told Motortransport.co.uk that the company had won new business in the e-commerce and industrial sectors during the trading year, the benefits of which would be seen it in its 2016 trading.
Underlying EBITDA was up 5.8% from £42m to £44.5m on a like-for-like basis, which the company said, was a result of rationalisation of its central cost-base – including the closure of its Runcorn training site and centralisation of its training and fleet department in its Appleton, Warrington, facility.
A year of investment
The spokesman said that the year had seen Stobart put “a lot of investment back into the business” including a roll-out of aerodynamic kits for its fleet developed in partnership with Wirth Research – the aerodynamics company founded by former Benetton Formula 1 chief designer Nick Wirth.
It said the significant decrease in the cost of fuel in the time-period – which had lowered its cost of sales by £12m – had no bearing on its EBITDA, as under a matched contract pricing mechanism it passes the reduction in cost on to its customers.
Underlying EBITDA at the company does not include the £7.5m profit it made on the £16m cash disposal of its UK automotive logistics business on 25 August 2015 to BCA Marketplace.
The filing said that the division required significant further work to be fully integrated into the existing business model of ‘flexible asset utilisation’ and removed a low-margin business, which it considered to be non-core. Turnover in the discontinued business stood at £54.6m and it made an operating loss of £39,000 before taking into account the profitability of the sale.
Stobart has retained its automotive operations in continental Europe after the sale which it said was “valuable in providing services to existing customers and facilitating expansion as new customers are acquired”.
Division restructure
The company has also finalised a restructure of its business units. Previously it split operations into four: ambient; chilled; soft drinks and high volume. It now runs its operations in six different business units: retail; consumer; e-commerce and fulfilment; manufacturing, industrial and bulk tankers; automotive Europe and special customer operations.
DouglasBay Capital acquired a 51% stake in the operator on 10 April 2014. The remaining 49% is held by Stobart Group.
