Transport@WCT  052

UK logistics is pretty much a private, and foreign, affair. The operators sitting at the top of the MT Top 100 are German, Swiss, Dutch , French and American. Looking at UK-based firms, very few sit on the London Stock Exchange (LSE).

The number of UK logistics firms turning to the City as a means of investment has dwindled, ever since the Malcolm Group withdrew its listing in 2005. Last month Autologic was struck of the list after fellow publicly-listed enterprise Stobart Group snapped it up.

Wincanton flies the flag as the largest, by turnover, operator in the UK but it has had contrasting fortunes. In the past 12 months its share price has fallen from 108p to 48p, rallying recently from a low of 32p at the end of July. Its largest shareholder, with an 11% stake, is Ameriprise Financial, a US investment firm based in Minneapolis, Minnesota. However, the next five largest stakeholders are all British, accounting for 44% of the total share value of the company.

Stobart Group retains a significant proportion of managerial ownership, with chief executive Andrew Tinkler, chief operating officer William Stobart and chief executive of Stobart Biomass Alan Jenkinson accounting for a 17.6% stake in the group. It’s largest shareholder is Invesco, an investment firm from Atlanta, with its HQ in Bermuda and shares listed in London. It owns 36.69% of Stobart Group.

UK Mail Group, despite its public listing, is still mainly a family concern. Business Post founder John Kane (and family) account for 56.56% of all shares in UK Mail. M&G Investment Management, part of the Prudential Group, account for 10%.

Norbert Dentressangle truck1

CityLink is a unique beast, being part of Rentokil Initial – which by the nature of its diverse business lines (pest control to school meals) attracts investors for different reasons. However, Rentokil’s largest shareholder, with 20%, is the same as Stobart’s: Invesco.

A quarter of the shares in NWF Group, parent to Boughey Distribution, are held by AO fjarfestingarfelag, a subsidiary of Icelandic bank Landsvaki.

Why so few listed companies?

There are, perhaps, two reasons why there are so few publicly-listed operators in the UK. One is the high level of consolidation that has taken place over the years; the second is the low margins operators run on.

Mark O'Bornick, research director at Analytiqa, says that the consolidation has also led to the decline in quoted UK companies. Exel was bought by DP DHL in 2005, which took one of the largest operators in the UK off the stock market. Norbert Dentressangle’s deal with Christian Salvesen in 2007 took yet another historic name of UK transport off the LSE and the Stobart/Autologic deal is the latest example.

However the lack of public scrutiny has also led to private giants like TDG being acquired. "In a fragmented and consolidating industry such as the logistics and transport sector, it can be preferable for senior management to acquire businesses from a privately held perspective, certainly with regards to the less onerous reporting side of things," added O'Bornick.

The other major issue that deters operators from seeking a public listing is the lack of margin in the industry. NWF Group, for example, is one of the 25 companies on the UK market with the lowest price to sales ratio (PSR). A low PSR means that investors do not rate the share value of a company’s sales very highly, because it is not proficient at converting them into profit.

For the foreseeable future then, listed UK-owned transport companies look set to remain something of a rarity.