Stobart forecasts increased profits

Stobart Group said it has progressed well in the first six months of the year and expects to deliver pre-tax profits ahead of the same period last year.

The provider of multimodal transport logistics, property development and biomass supply has released a trading statement ahead of its interim results on 26 October 2011.

The company reorganised into five divisions in April and said it has set out on a three year plan with an aim at delivering "value to shareholders".

During the first six months of the year, Stobart said the different divisions have delivered a number of successes including:

• Estates – The division finalised the planning and initiated the marketing for Stobart's multimodal site in Widnes. Meanwhile, Stobart said other commercial and industrial property opportunities are being considered and further value was generated in existing investment properties
• Transport and distribution – Stobart said over the past 12 months the transport market has witnessed "significant change, predominantly led by consumer buying patterns". The group added it has resulted in shorter lead time, significant fluctuations in volume caused by promotions and increasingly inaccurate customer forecasting. Stobart's statement said these changes "culminated in a difficult period from the end of May through to the middle of July by which point the business had implemented measures and systems to ensure it could successfully meet these challenges". However, Stobart added that August trading has improved materially and it expects a stronger second half to the financial year
• Infrastructure and civil engineering – Stobart said external work remains slow but internal developments are progressing well, in particular the London Southend Airport project. Stobart said the project remains on target to meet the development milestones required for launch of a new runway in 2012. Stobart said: "The challenges to the extension of the runway have been unsuccessful. This allows full development of the Airport with no further legislative obstacles."
• Air – At London Southend Airport, following the announcement of a 10 year contract in June, Stobart said easyJet has announced a number of further routes and there is interest in the airport from other operators. Stobart said the airport railway station, operated by Stobart Rail, opened in July and is creating another revenue stream for the group. Stobart also remains hopeful that Carlisle Lake District Airport will receive the backing for its investment plans, now a revised planning application is being considered by Carlisle Council
• Biomass – Stobart said the biomass fuel supply division has traded over 200,000 tonnes of product during the last six months with export volume into Scandinavia. Stobarts expect volumes to double in the second half, delivering strong profit growth during the period