Stobart cuts full-year profits forecast

Stobart Group blamed the "slight" downward revision on the impact of Network Rail spending cuts at its rail infrastructure maintenance operation.

It also reported shorter lead times and volatility in volumes at its core transport business and said it was concerned that business may be affected by January's VAT increase and the government's spending review.

Shares fell despite the company reporting a better-than-expected 24 per cent rise in half-year profits from continuing operations to 15.4m in the six months to August 31. Revenues were up 11.7 per cent to 243.7m.

It said the Eddie Stobart business – the largest of its divisions with a fleet of 1,850 trucks and 3,000 trailers – performed particularly well after contract wins with Tesco and Tizer drinks firm AG Barr among others.

Revenues for the division jumped to 219m from 188.7m a year earlier.

Stobart, which has operations covering road, rail, ports and air, has weathered the economic storm because a large slice of its workload involves food and drink, where business volumes have been resilient.

The company's rail division, which runs freight services and undertakes work such as bridge and line-side maintenance, saw half-year revenues drop to 26.3m from 30m a year earlier.