Stobart profits up but forecast down
The logistics giant reported sales up 11% to £243.7m in the six months to the end of August.
Pretax profit leapt 38.7% to £15.4m for the same period. Earnings per share from continuing operations were up 16.2% to 4.3p (2009: 3.7p)
Andrew Tinkler, chief executive, said: "We have again shown strong growth and resilience in the business with underlying profits up 24%. Eddie Stobart has performed particularly well after contract wins with Tesco, A G Barr and others which have added volume and margin and there is further growth to come from these contracts. Changes in the way our customers operate have provided challenges to us which we are addressing. In particular we have faced shorter lead times and volatility in volumes. In the long term we are well placed to take advantage of these changes in the market.
"Exciting developments include the biomass link-up with AW Jenkinson Forest Products, the major improvements at London Southend Airport and agreement with Aer Arann. We are talking to other significant potential customers in both of these businesses.
"We have slightly reduced our full year profit expectations as a result of reduced spend by Network Rail and increased overall finance costs. We are also cautious that 2011 may see volumes affected by the increase in VAT rate and the Government spending review. However, in the long term we see this as positive for the economy and our business. Overall, we look forward to further growth in the second half as new contracts fully contribute. Our efficient green fleets and innovative transport solutions continue to impress customers and our improved assets give excellent opportunities for adding value."
An unchanged interim dividend of 2p a share will be paid on 10 December 2010.