Stobart is still restructuring the former Innovate business it acquired out of administration in 2008 – a process that has been “more challenging, costly and further reaching than first planned”.
The admission came as Stobart Group revealed profit rose 10% at its transport and distribution division (Eddie Stobart) to £14.2m in the first six months ended 31 August. This was despite a 5.6% fall in turnover to £251.1m.
“We have improved our margins in [Eddie Stobart] through more effective financial control and cost management. We have also focused on addressing lower margin contracts by improving pricing rates and in some cases rationalising routes,” the directors said in a statement – adding that the fall in consumer spending continued to hurt volumes.
Restructuring the Innovate chilled business cost Stobart £4.2m in the first half of its financial year, and it expects to incur the same costs in the second half.
The second half will include the first contribution from Autologic, which is acquired in August.
During the period DCs at Corby and Alcester were closed and Stobart admitted it had reduced its fleet size.
Over the next six months Stobart said it will continue a “robust restructuring programme” where system processes that already apply to its ambient fleet are implemented in chilled.
Chief executive officer Andrew Tinkler, said: "We have worked hard to improve margins and profitability in our core transport business despite tough trading conditions. We are well underway with delivering the stated plan for the group."
Its Stobart Biomass division continued to perform robustly with revenue up to £6.6m from ££2.6m in the same period a year ago. Pre-tax profit doubled to £800,000. Contracts with energy firm Helius and paperboard manufacturer Iggesund are expected to commence in the last quarter.
- Eddie Stobart is facing a second wave of strike action in Donacaster after redundancy talks with Unite broke down.