Eddie Stobart profits accelerate as new contracts bump up sales
Eddie Stobart Logistics saw sales and profits jump last year as the road haulier was boosted by new contract wins.
The firm posted a 35% rise in full-year revenue to £843.1 million in the 12 months to November 30, ahead of market expectations, while pre-tax profit more than doubled from £9.9 million to £23.6 million.
Chief executive Alex Laffey said: “We were pleased with our strong performance in 2018, during which we made significant progress in delivering our strategy of becoming a full-service logistics and supply chain organisation.
“Whilst we remain mindful of the current political and economic uncertainty, we are confident that our unique operating model provides us with the flexibility to respond rapidly to changing market conditions.”
The haulier signed new contracts with the likes of PepsiCo Walkers, Britvic, Cemex and Tarmac, and renewed deals with Johnson & Johnson, Unilever and Coca-Cola.
In total, Eddie Stobart gleaned £162 million from new contracts across all its sectors.
Excluding contributions from subsidiaries – iForce, Speedy Freight and The Pallet Network (TPN) – like-for-like sales were up 18%.
Underlying earnings, the group’s preferred measure, were broadly in line with market expectations, rising 14% to £55.3 million.
Net debt as at period end was £159.7 million, up from £109.5 million, reflecting working capital investment.
The increased investment is needed to support the significant levels of sales increase and the additional debt associated with the acquisition of TPN, the company said.
Eddie Stobart Logistics added that profit margins improved in the second half of the year, following costs incurred in the first half in implementing major new customer contracts.
Last year the firm said bosses are reviewing whether or not to keep the renowned British brand.
On this front, the company said: “We remain committed to evaluating all of our options around our name and leading brand. We have engaged with a brand specialist and talked to customers, shareholders and employees regarding our brand and their perceptions of the value it brings.
“The board remains confident that, whatever the outcome, value will be created and retained in the long term for all key stakeholders.”
Eddie Stobart Logistics, which was spun out of Stobart Group in 2014, has to pay royalties to its former owner for using the name until the current licensing deal ends in 2020.