INTERVIEW Stobart 'unlikely' to get involved in TDG bid battle

Δημοσιεύθηκε: 12 Μαΐου 2008 - 09:51

LONDON (Thomson Financial) - Stobart Group Plc., the owner of the iconic 'Eddie Stobart' trucks which ply the UK's motorways, said Monday that it was 'unlikely' to get involved in the bid battle for rival haulier TDG Plc., but added that it was still interested in taking part in the ongoing consolidation of the industry.

Stobart, which came to the market last year after it reversed itself into property company Westbury in a 138 million pound deal, has itself been active on the acquisitions front and recently snapped up rival road haulier Irlam Group in March and transport infrastructure group WA Developments for a total of 69.9 million pounds. It also reached an option agreement to buy Carlisle Airport.

'We're still looking for suitable acquisitions, especially around our integrated multi-model transport and logistic services business,' group finance director Ben Whawell told Thomson Financial News in a telephone interview this morning.

However, he said the group was unlikely to get involved in the 236 million pound battle being fought out between Wincanton Plc. and Laxey Partners, the offshore investment group, for TDG. Last Friday, Wincanton made an indicative 290 pence a share cash offer for TDG, trumping a rival 275 pence offer from Laxey.

'We're monitoring the situation, but I can't see us getting involved. We've been very active ourselves on the acquisitions front and we've a busy year ahead of us to integrate and bed these deals down,' said Whawell. He added that the group would continue to invest in its road, rail and port operations to create a 'fully inter-modal' logistic services group.

At present, the group operates over 1,500 trucks and 2,900 trailers, as well as port and rail freight services. It also has over 4 million square feet of state-of-the-art storage facilities. Stobart has a blue-chip client list that includes Tesco Plc., Coca Cola, Proctor & Gamble, Homebase and Britvic Plc.

Whawell said that despite rising fuel costs - especially for diesel - the group's contracts included a 'fuel escalator' component that allowed for rising fuel costs to be passed on to the client.

'The group is unique in this respect. We have a strong relationship with our customers who realise that there is very little we can do about rising fuel costs. We've seen several independent hauliers go into administration recently as a result of rising fuel costs and the last thing customers need is a haulier to go bust and to leave the shelves empty,' Whawell said.

Rising diesel prices now means it costs close on 200 pounds to fill up a typical articulated lorry.

'Our model allows customers to share in the risks and rewards of running a more efficient road transport business,' said Whawell. 'Our utilisation rate is currently 82 percent - meaning just 18 percent of miles were travelled with a load - while 56 percent of the fleet is Euro 4 compliant on emissions,' he continued.

The first full set of results from the company since it listed on the stock exchange last September, show that the core ongoing operations of the Eddie Stobart trucks business performed well lifting sales by 27 percent and profits by 70 percent after fleet financing costs.

However, the results were distorted by the inclusion of a number of discontinued businesses and, on a consolidated basis, pretax profits for the 14 months to end-February were 3.5 million pounds, compared to a loss of 1.12 million pounds for the prior 12 month period.

On an ongoing basis, earnings after fleet financing costs were 5.4 million pounds on revenues of 108.8 million pounds. A final dividend of 5.3 pence is being proposed to take the total payout to 8.0 pence a share.

In the stock market, the group's shares were holding steady at around 142-1/2 pence at 9:30 a.m.

Whawell said the results were in line with management's expectations and that the current financial had also started well.

'The two core operating businesses of Eddie Stobart trucks and the O'Connor container terminal division are performing well and, together with the benefit of the recent acquisitions, I'm confident of further growth in 2008-09,' he said.

By Malcolm Locke: [email protected]

ml/slm

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