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Eddie Stobart, the UK logistics group, announced strong revenue growth, but earnings growth and lower margins in 2018, partly due to the cost of new business.
The company, recognizable by its green and red trucks, has increased its annual turnover by 35% to 840 million pounds sterling. But earnings before interest and taxes fell below expectations, to 57 million pounds, up 14% to 55.3 million pounds sterling. The underlying ebit margin fell from 7.8% to 6.6% due to the cost of integrating new customers into their network.
New contracts awarded this year, including PepsiCo and Cemex, led the company to "suffer indigestion," according to badysts at Cenkos Securities, the company's broker.
"I am delighted with the strong performance of our sales in this difficult and difficult period of the market," said Alex Laffey, General Manager.
The company started as a farming business in 1940 and later became Stobart Limited in 1970, with the logistics arm separated at the same time. A conflict over the continued use of the name Stobart, which has recently been awarded £ 50 million for exclusive rights, could lead to a new brand image.
Net debt exceeded consensus expectations from £ 109.5 to £ 159.7m in 2018. The logistics group acquired several brands during the year, including The Pallet Network, a rival transport company. and iForce, a supply chain management company.
Pre-tax earnings were slightly below expectations at £ 49m instead of £ 50m.
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