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Friday, 25 July 2014

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Logistics giant Stobart Group delivers profit warning

Logistics giant Stobart Group has issued a profits warning in response to the “uncertain economic environment”.

An interim management statement, covering the period from September 1, cautions that operating performance for the year will be “slightly below current market expectations”.

Stobart, which began as an offshoot from an agricultural merchant in Hesket Newmarket, owns the iconic Eddie Stobart road-haulage business.

It now has diverse interests including property, civil engineering, air and biomass.

Its proposals to redevelop Carlisle Airport are due to go back before city councillors on Friday when planning officers will recommend that planning consent is confirmed, subject to conditions.

In the interim statement, Stobart says its transport and distribution division “continued to perform” despite the challenging conditions. Its chilled operation will no longer operate as a stand-alone unit, however.

The statement adds: “December trading was comparable to last year within similar economic circumstances.

“In the traditionally quieter months of January and February, the division will be focused on cost control to reduce risk to the final quarter’s trading.”

Growth in biomass has been delayed by the timing of UK Government legislation but, Stobart says, the division performed well against “realigned expectations”.

Stobart Estates continues to work on developing sites and profitable disposals but progress has been “slower than anticipated”. Negotiations are continuing on the disposal of several properties.

The air division, centred on Southend Airport in Essex, incurred higher-than-anticipated costs.

The statement says: “The group invested heavily in training and service delivery to meet the faster than expected initial growth.

“This infrastructure and investment in the employees and their training is now in place to support future growth.

“Passenger movements were very strong at London Southend Airport with the numbers passing through our terminal in the period since launching in April exceeding 600,000, and ahead of our expectations.”

Work has started on extending the passenger terminal.

EasyJet is planning to locate a fourth aircraft at Southend from June and Stobart says that it is in talks with “other European airlines” about new routes.

Stobart has outlined plans for twice-daily scheduled flights between Carlisle and London Southend, if its development proposals for Carlisle go ahead.

That is by no means certain, however, because objectors have threatened to seek a judicial review if Carlisle City Council confirms planning consent.

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