Stobart Group has blamed the weakness of the economy for holding back profits growth in the first half – particularly in its Transport and Distribution business.
Underlying EBITDA was up 2.6 per cent to £27.6m while sales rose 15.3 per cent to £281.1m.
Chief executive Andrew Tinkler said: “We have delivered a robust performance across the group despite a tough market for transport. Our new strategy is being implemented and we are well positioned to deliver strong results in the medium term.
“The weak economy, however, has held back our rate of profit growth particularly in Transport and Distribution.
“The road transport operations were affected by fluctuating customer demand during the summer, but we have substantially improved our operational information systems allowing us to manage this volatility much better and achieve cost savings,” he said.
Action has focused on better fleet utilisation and greater operating efficiencies resulting “in a significant improvement in margins and restoration to a profit run rate more broadly in line with our initial expectations, despite the continuing weak economic background” the group said.
“These new information technology systems have also enabled us to further analyse our cost base and compare the operating efficiency of each division in our new structure. This will drive further efficiencies, consolidation and removal of waste moving forward.”
During the first half Stobart put in place a new operating divisional business structure. It also raise £114m through a share placing which will be used for investment –notably in the bio-mass business and property portfolio.
“Estates is on track to deliver future value and has a number of potential property transactions in the pipeline,” said Tinkler. “Our Biomass business is expanding quickly as a result of demand from both the UK and overseas and we expect plenty of new opportunities to arise from the fast-growing renewable energy sector.
“As a result of the actions we have taken in Transport and Distribution we expect to report further progress in the second half. The board’s outlook for the year is broadly unchanged despite the tough environment”.