Eddie Stobart reports good contract progress ahead of Christmas

Eddie Stobart updated the market on its contract progress across all business sectors on Thursday, reporting that in its retail sector it now provides services to “most” of the major supermarkets in the UK.

The company said it secured a new three-year contract with Homebase, starting in January 2018, to supply logistics services to more than 230 stores, adding that it was in discussions with a number of Homebase's suppliers to explore opportunities to support their supply chain requirements.

Within its consumer sector, the company said it re-secured contractual volumes with long-standing customers such as Britvic and Coca-Cola, which the board said reflected its “continuing ability” to provide high quality supply chain solutions.

“We are seeing volumes in line with our expectations for this customer sector in the lead up to Christmas,” the board said in its statement.

“Eddie Stobart's warehousing network is currently operating at optimum utilisation levels and we continue to invest in expanding warehouse capacity.

The company signed a new 10-year warehousing contract with its existing customer Moy Park and other new warehousing contracts with C&D Foods and Novelis, it reported.

Eddie Stobart’s manufacturing, industrial and bulk sector was continuing to grow, the board said, with new contracts secured with Hanson, Argent Energy and Novelis.

It said it could still see “significant opportunities” for growth within the sector, as customers looked to outsource areas of their supply chains.

E-commerce also continued to be a “rapidly growing” customer sector, with the company saying it was providing increased services to “the UK and European leading online retailer” in the lead-up to Black Friday and Christmas.

“We continue to see strong growth from the iForce e-commerce solutions business that we acquired in April, and expect the e-commerce sector to produce material year-on-year growth.”

The company said new five-year contracts were secured with MedicAnimal and Prezzybox, with an anticipated aggregate value of around £20m.

Other successful tenders were expected to result in additional new contracts with average lengths of three years.

Additional warehousing capacity created at an iForce site in Corby following a significant investment programme was utilised immediately by the existing iForce customer base, the board said.

“We are continuing to leverage iForce customer relationships resulting in Eddie Stobart supporting Fortnum & Mason in delivering its hampers and gifts in the lead up to Christmas.”

The company said iForce and Speedy Freight, the business-to-business express freight business acquired in July, continued to offer further cross-selling opportunities to Eddie Stobart's broader transport and warehousing business.

Finally, within its special operations sector, the company said it secured new contracts to provide logistics and technical services to Mercedes Benz and the FIA for the next Formula One season. and continued to provide support to other racing teams.

“We are pleased with our progress in securing new customers as well as retaining and growing business with existing customers, in line with expectations,” said chief executive Alex Laffey.

“We look forward to supporting our customers as we head into our peak trading period.”