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Stobart Group expects to deliver increased pre-tax profits for first half

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Transport logistics firm Stobart Group (LON:STOB) said it had “progressed well” during the first six months of the year, and that it expects to deliver pre-tax profits for the period that will be ahead of those made in H1 2010.

The group, which released a trading update today, has reorganised into five key operating divisions and it has set out on a three-year plan designed to deliver “significant value” to shareholders.  Stobart said that these divisions have “experienced different challenges during the six-month period against the background of difficult markets”.

As far as the group’s Transport & Distribution division was concerned, over the past 12 month the transport market “witnessed significant change, predominantly led by consumer buying patterns”, said Stobart. The result was a shorter lead times and significant fluctuations in volume caused in part by “increasingly inaccurate customer forecasting”.

During this difficult period, said the firm, the performance of the business was adversely affected. However, August trading has “improved materially” and Stobart expects a stronger second half to the year.

The group’s Estates division has finalised the planning and begun marketing of Stobart’s multi-modal site in Widnes. Other commercial and industrial property opportunities are being considered, said the firm, and further value has been generated in existing investment properties.

The firm’s Infrastructure and Civil Engineering division has seen progress in internal developments, while “external work remains slow”. Stobart’s London Southend Airport project remains on target to meet development milestones that are required for launch of the new runway in 2012.

Stobart’s Air division saw easyJet announce a number of further routes from the Southend airport and there is significant interest from other operators. Meanwhile, the airport railway station – operated by Stobart Rail – opened in July, creating another revenue stream for the group.

Finally, the group’s Biomass division has traded more than 200,000 tonnes of the product during the last six months, with significant export volume into Scandinavia. Volumes here are expected to double in the second half, delivering strong profit growth, said Stobart.


Quick facts: Stobart Group Ltd

Price: 30.25 GBX

LSE:STOB
Market: LSE
Market Cap: £189.04 m
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