Reuters: Hot Stocks: UPDATE 1-Stobart's operating profit rises on transport, biomass

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UPDATE 1-Stobart's operating profit rises on transport, biomass May 16th 2013, 11:06 Thu May 16, 2013 7:06am EDT * Full-year underlying operating profit rises 12 percent * Full-year revenue rises 16 percent * Shares rise as much as 7 percent (Adds background, details; CFO quote) By Richa Naidu May 16 (Reuters) - British freight company Stobart Group Ltd reported a 12 percent rise in full-year operating profit, helped by cost cutting in its transport and distribution business and strong growth in its fledgling biomass unit. Stobart's shares rose as much as 7 percent on the London Stock Exchange on Thursday. The haulier, whose Eddie Stobart lorries deliver goods to retailers such as Tesco Plc, said underlying operating profit rose to 44.9 million pounds ($68.36 million) in the year ended Feb. 28, from 40.1 million pounds a year earlier. Revenue rose 16 percent to 572.4 million pounds. Underlying operating profit in the transport and distribution business rose 7 percent to 29.7 million pounds. Operating profit more than doubled to 4 million pounds in the relatively new biomass business, which supplies timber and softwood used for electricity generation. The transport and distribution business, which has been hit by a downturn in the British retail sector, underwent severe restructuring over the past year. Stobart sold off the unit's vehicle services business, rebranded the distribution business and shuttered the chilled pallet storage business. "The transport business has weathered the storm over the last few years very well ... if the economy moves the right way we'll see some volume growth," Chief Financial Officer Ben Whawell told Reuters. It has been an uncertain year so far for Stobart, whose non-executive chairman left the company a week after a profit warning in January. The company then said in April full-year results would be ahead of market forecasts. Stobart lost its FTSE-250 index membership earlier this year, following a 27 percent fall in its share price last year. Stobart shares were up about 3 percent at 91.42 pence at 1100 GMT. ($1 = 0.6568 British pounds) (Editing by Don Sebastian and Saumyadeb Chakrabarty) Link this Share this Digg this Email Reprints

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