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Eddie Stobart Group
Page 6
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The purchase of Eddie Slohatt Group by WA Developments (International) is widely recognised as a good move for Edward Stobart, due to the haulage firm's poor trading results over the past few years.
"It hasn't been doing well." says Plimsoll Publishing's senor analyst David Pattison. it's got itself into a pickle with debt. In 1999 its debts were £50m. It is now £25m, but it's paying £2rn a year in interest payments." He adds that the situation is very similar to the recent Chelsea takeover: "If Eddie Stobart got £60m it would be a very glamorous figure, but he owes millions of that to the banks! And WA Developments will have to find another £25-30m to finance the thing. Interest payments are completely eroding any profit [but] taking the business forward, it could be worth double that."
Independent analyst John Manners Bell says: "It's obviously going to need a lot more capital to invest in it. I think the role for any medium-sized company is limited without developing more of the integrated logistics that some of the bigger rivals already have.
"The marketing side of the company is the only side that is making money," he adds, "but not enough to make it sustainable."