STOB.L Regulatory News (STOB)

1 Jul 2008 07:00



01 July 2008

STOBART GROUP LIMITED

('Stobart' or 'the Group')

STOBART GROUP ACQUIRES CHILLED GOODS OPERATIONS

Stobart Group, one of the UK's leading providers of multimodal transport and logistics services, announces today that it has acquired the chilled and ambient goods operations of Innovate Logistics Limited (the 'Innovate Operations') from its administrators BDO Stoy Hayward. 

This transaction significantly broadens Stobart's chilled distribution operations in the UK. It will further enhance its specialist fleet capabilities and extend the range of services it offers customers. Under the terms of the acquisition, the Group will take on a number of Innovate Logistics contracts, including a warehousing operation with Nestle, an existing Stobart customer. It is expected that around 1,300 existing employees of Innovate Logistics Limited will transfer to Stobart. The Group will license 280 tractor units, 350 trailers and the associated warehousing from the administrators for an initial six month period in order to service the contracts with the option of assuming the leases thereafter.

The enlarged Group will now have more than 1,800 trucks, 3,200 trailers and will employ over 5,300 people in 40 locations across the UK, Ireland and Europe. 

The Innovate Operations have minimal accounting book value, and any working capital funding requirements for this transaction will be met from existing resources and new bank facilities. The Innovate Operations are expected to generate turnover of around £100 million per annum and the acquisition is expected to enhance earnings in the first full year.

Andrew Tinkler, Chief Executive of Stobart Group, said:

"The Board is pleased to announce the acquisition of Innovate Logistics' chilled distribution operations. This is a low risk way of increasing our presence in the chilled market, giving our customers more choice and flexibility. It is entirely in-line with our strategy of building the Group." 

"Our management team has a great track record of getting logistics operations to work efficiently and profitably. As we have done very successfully in the past, we will apply our operating model to these contracts and integrate the operations fully into the Stobart Group."

"We are committed to safe-guarding the jobs of 1,300 people who may otherwise have been unemployed and we look forward to welcoming them to the Group."

-Ends-

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