Stobart says it is focusing on restructuring and improving its chilled and warehousing operations which are performing below the last year.
“The restructuring will result in a more efficient operation to take advantage of future market opportunities.”
In a trading update it said the recently implemented new divisional structure was working well. The ambient transport operations had largely been restructured and improved and had progressed well in the second half of the year.
Action had focused on better fleet utilisation and greater operating efficiencies resulting in a significant improvement in margins.
“These operations are in a strong position for the new financial year.”
Rail freight was performing well with the Valencia service recommencing, while the new rail operation at Tesco Grocery in Daventry for up to eight trains a day was fully operational, it said.
Overall, it said the group was trading in line with current expectations for the full year to 29th February with some divisions performing ahead and some slightly below expectations.
The group has also announced plans to acquire the “Moneypenny” portfolio of 18 properties from a company controlled by Stobart’s chief executive Andrew Tinkler, and chief operating officer William Stobart in a deal worth £12.35m.
It is paying £5.15m in cash for WADI Properties, which owns the properties, with the remaining £7.2m in new Stobart shares.
The total enterprise value for the Acquisition is £101.2m, excluding the banking facility fee of £2.8m. WADI Properties has net debt of £88.85m.
The vendor is a company controlled by Stobart’s CEO and main board director, Andrew Tinkler, and COO, William Stobart. Andrew Tinkler is also a substantial shareholder in Stobart. Ben Whawell, Stobart’s Finance Director and main board director, and Richard Butcher, Deputy CEO and CEO of Stobart Estates, are also directors of the vendor and WADI Properties. Ben Whawell, along with Andrew Tinkler, did not participate in the board decision to proceed with the proposed transaction.
Rodney Baker-Bates, non-executive chairman of Stobart, said: “ This portfolio will both diversify and strengthen our existing property portfolio. We have the management capability within the group to improve both the income and capital performance. It will provide positive cash flow, gives a return above our current cost of capital, and offers substantial capital upside potential.”
