E-commerce focus a winner for Eddie Stobart

Eddie Stobart issued a trading update for the financial year to 30 November 2017 on Thursday, reporting that group revenues for the year were £618m, representing year-on-year growth of 12%.

The AIM-traded firm said underlying EBIT was in line with expectations, reflecting “strong” organic growth and new contract wins.

Its customer sectors of e-commerce, manufacturing, industrial and bulk, and retail delivered double digit growth in the period and the recent acquisitions of iForce, Speedy Freight and The Logistics People continued to perform strongly for the group.

“E-commerce sales grew strongly to £103m from £49m with eight new contracts won since the acquisition of iForce, including Made.com and Wolseley, and the segment remains on track to achieve the group's target of 25% of group revenues in the 2019 financial year,” the board said in its statement.

Industrial and bulk sales grew more than 37% to £182m in the period, while retail sales grew by 11% to £168m, benefiting from growth with many of the UK supermarket groups as well as supporting new customers during their peak trading periods.

Consumer sector sales of £144.3m reflected the company’s continued focus on strong margin discipline and profitability, the board added, while transport and warehouse operations continued to perform strongly in terms of productivity performance and overall utilisation.

“We have delivered strong and improved operating margins across all sectors and cash conversion for the financial year was ahead of FY16. Net Debt was £109m, in line with our targeted gearing levels, reflecting continued investment in our growing MIB sector,” the board explained.

The group intended to recommend a final dividend for the period in line with expectations of 4.4p per share.

“We are pleased with our performance during the year and to have delivered strong profit growth in line with expectations,” said chief executive Alex Laffey.

“The last quarter of the financial year saw a marked increase in contract wins some of which have now commenced and provide good visibility for the current financial year.”

Laffey said Christmas trading across the group was in line with expectations.

“The new financial year has commenced well with growth ahead of prior year across all sectors and further new customer contracts agreed with Homebase, Cemex and Knauf.

“We look forward to the current year with confidence."

The group's audited results for the 12 months to 30 November would be released on 29 March, with numbers in Thursday’s statement still subject to audit.