Eddie Stobart drives logistics group GWSA back to profitability
The holding group behind logistics firm Eddie Stobart today said it had swung back to profitability in the first half of the year as it cashed in on higher demand for transport services during the Covid-19 crisis.
Green White Start Acquisitions (GWSA), which also controls iForce, The Pallet Network and The Logistics People, reported revenue of £416.5m in the six months to the end of May, down 1.1 per cent on last year.
However, the holding group posted earnings before interest, tax, depreciation and amortisation (Ebitda) of £16.6m, up from a loss of £6.3m in 2019.
GWSA said the figures highlighted its strong performance against the backdrop of the coronavirus crisis amid increased demand for high quality logistics and transport services.
The group said its return to profitability also reflected progress on its turnaround plan after Eddie Stobart was rocked by an accounting scandal.
The famous haulage firm almost fell into administration last year after an accounting investigation found its profits for 2018 had been overstated by £2m.
But the company agreed a £55m rescue deal last year that saw shareholder Dbay take a 51 per cent stake. The private equity firm also installed William Stobart – son of founder Eddie – as executive chairman to oversee a turnaround plan.
“These results show we have put past challenges firmly behind us,” boss Stobart said in a statement.
“The past six months have shown the strength of our differentiated business model which has allowed us to grow existing customer relationships, win new business, return the GWSA Group to profitability and overcome challenges presented by Covid-19.”
GWSA reported net debt of £242.7m at the end of May, up from £236.9m at the time of the Dbay rescue deal, largely due to a high-interest payment in kind (PIK) note loan used as part of the refinancing.
The group said it would offer Eddie Stobart shareholders the chance to refinance the loan “as soon as is practicable”.
GWSA said it expected underlying earnings of more than £33m for the full year, as well as a reduction in net debt.