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Eddie Stobart Logistics (ESL)

Business description

Eddie Stobart Logistics is a market leader in end-to-end, multi-modal transport and logistics. Operations are primarily focused in the UK with some activities in mainland Europe. Key customer segments include retail, consumer, industrials and increasingly, e-commerce.

Y/E Nov Revenue (£m) EBITDA (£m) PBT (£m) EPS (p) P/E (x) P/CF (x)
2016A 570.0 47.4 24.0 7.9 13.3 9.7
2017A 624.0 55.3 37.8 9.8 10.7 11.4
2018E 818.0 66.3 50.1 11.5 9.1 9.4
2019E 911.0 77.3 61.1 13.4 7.8 6.8

Last updated on 27/01/2019

Investment summary

In January 2019 Eddie Stobart Logistics issued a trading statement for the financial year ended 30 November 2018. Group revenues were 3% above market expectations as the company experienced a steep acceleration in organic growth in H2 (+18% for FY18 vs +10%/+6% in H118/FY17). Recent acquisitions were also performing strongly. EBIT was in line with market expectations despite the revenue beat, which we believe reflects the task of integrating the acquired companies while at the same time experiencing very strong organic growth; margins remain well above the industry average. The stock continues to trade at a discount to UK and European competitors, despite higher profit margins.

Last updated on 01/02/2019

Industry outlook

The trend for customers deciding to outsource logistics to achieve savings continues to provide a tailwind for growth, especially in the consumer and retail sectors where there are revenue and cost pressures. In our view, the outsourcing opportunity is large, with 45–80% of logistics and supply chain services in the UK and Europe still performed in house (according to EU Commission estimates).

Last updated on 01/02/2019

Key management

Alex Laffey, CEO

Company address

Stretton Green Distribution Park
Langford Way, Appleton
Warrington
WA4 4TQ
United Kingdom
01925 605400
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