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Eddie Stobart Logistics

Growth accelerating in H218

Flash note | Industrial Support Services | 21 Jan 2019

We believe Eddie Stobart Logistics’ (ESL) trading statement shows that the consumer and retail sector trend for companies to outsource their logistics operations to achieve savings continues to support organic growth for the company. FY18 revenues were 3% above market expectations, while EBIT was broadly in line.

Eddie Stobart Logistics

Outsourcing and e-commerce boosting growth

Outlook | Industrial Support Services | 30 Oct 2018

Eddie Stobart Logistics (ESL) saw a strong level of new contract wins in H118, which contributed to its 25% revenue growth, of which 10% was organic. We believe that new opportunities are arising as customers look to outsource their logistics to both save money and cope with the shift to e-commerce. ESL's e-commerce revenues rose from 5% of the total in FP14 (8M14) to 21% in H118. As well as organic growth, the company is seeing a good revenue and profit contribution from acquisitions as it looks to further consolidate a fragmented market. In June, ESL completed its largest acquisition since listing when it bought The Pallet Network (TPN), which adds pallet distribution to its range.

Eddie Stobart Logistics

Strong revenue growth boosted by contract wins

Update | Industrial Support Services | 05 Sep 2018

Eddie Stobart Logistics (ESL) published its H1 results on 30 August, reporting 25% revenue growth, including 10% organic. Organic growth was boosted by a higher than average level of contract wins and a good performance from the e-commerce division. A flip side of the contract wins was that they incurred network reoptimisation costs and this was the main reason that the EBIT margin declined from 5.9% to 5.0%. Management maintained full-year guidance.

Cenkos Securities

Making hay when the sun shines

Update | Financials | 06 Oct 2017

Cenkos Securities’ H117 result was strong with a pre-tax profit increase of over 150% bolstered by the Eddie Stobart IPO, which provided further evidence of the company’s ability to complete larger transactions as well as a flow of smaller deals. The second half has started well and, subject to market conditions, the pipeline is reported to be healthy. Our FY17 earnings estimate has been increased by nearly 11%. Revenue and profit are subject to market fluctuations but the business model of contained fixed costs and high variable compensation mitigates the impact of this. The valuation both in terms of P/E and yield appears cautious.

Eddie Stobart Logistics

Interims show delivery on growth plans

Update | Industrial Support Services | 01 Sep 2017

Eddie Stobart Logistics’ (ESL) H1 numbers, well trailed at the trading update in July, showed high levels of growth (13% revenues and 14% EBIT) consistent with management guidance and market expectations. New contract wins, which totalled GBP 25m in the first half, were bolstered by organic growth in key business units. The iForce acquisition is integrating well, with the post-period acquisitions of Speedy Freight (announced at the trading update) and the remaining 50% of the Logistics People (announced yesterday) set to benefit earnings. Taken together, these growth drivers helped ESL achieve a slight increase in EBIT margin from 5.8% to 5.9%, which is well above other listed logistics firms. Also, H117 witnessed the announcement of the company’s maiden dividend of 1.4p. We increase our earnings and FY17 acquisition charge to reflect post-balance sheet events and nudge up our fair value to 203p.

Eddie Stobart Logistics

Strong H1 reinforces story

Update | Industrial Support Services | 13 Jul 2017

ESL’s pre-close update confirmed the company traded in-line with expectations in the first half and continues to do so going into the second half. H117 sales grew 13% to GBP 287m with a modest expansion in operating margins despite a challenging economic and political backdrop. Integration of the iForce acquisition continues and management highlighted the potential for cost and revenue synergies. In addition, ESL acquired 50% of Speedy Freight, a B2B express freight service provider. CEO Alex Laffey said he remains confident of meeting market expectations for the full year and once again highlighted E-commerce, Manufacturing, Industrial and Bulk as key end-markets for the group.

Eddie Stobart Logistics

Life in the fast lane

Initiation | Industrial Support Services | 19 Jun 2017

Through a mixture of winning new outsourced logistics contracts, exposure to the substantially higher-growth e-commerce subsector and solid underlying market growth, we forecast that Eddie Stobart Logistics (ESL) will grow EBIT at 15.3% CAGR over the next three years. Since being taken private in 2014, ESL has brought in new management and grown earnings significantly. Listing on AIM in April 2017 enabled the company to pay down debt, make a small acquisition and set the business up for the next phase of expansion. Despite its sector-leading operations and outlook, ESL trades at a discount to its global peers. We believe it should trade at least in line and our fundamentals-based valuation per share of 200p offers equity holders upside of 26%.

Stobart Group

Realising value and focusing on growth

Flash note | Industrial Support Services | 06 Mar 2014

Stobart Group has announced a proposed partial realisation of 51% of the group's Transportation & Distribution division to DBay. This values the disposed elements at £281m, exceeding our previously implied valuation of the whole of T&D of £268m, while retaining key elements to support future growth in value. Stobart will become an infrastructure and support service firm, focused primarily on growth divisions in Energy and Air. The proceeds will be used to provide funding of up to £55m for investment in Stobart Green Energy, to fund a share buyback of up to £35m and to repay the group's £100m M&G loan, leaving the group with minimal debt. The deal provides a partial realisation from the mature Eddie Stobart business, while allowing management to fully focus on delivering its growth plans.

Stobart Group

Tidying up acquisitions

Update | - | 10 Mar 2008

We see the announcement of this series of earnings enhancing acquisitions and accompanying share issue as another step in the series of measures management has been taking to clarify the strategy of the group since its formation from the merger of Westbury and Eddie Stobart.

Stobart Group

Logistics superbrand

Outlook | - | 20 Aug 2007

Stobart Group, formed from the merger of Westbury Property Fund and Eddie Stobart Ltd, provides twin attractions: a high growth “superbrand” road haulage business supported by existing new contracts; and a series of rail freight, storage and undeveloped port assets that should steadily turn into a strong complementary earnings stream.