Brand Acquisition and Trading Update

RNS Number : 5471N

Eddie Stobart Logistics PLC

21 May 2020

 

21 May 2020

Eddie Stobart Logistics plc

(the "Company")

Eddie Stobart Group - brand acquisition and trading update

Eddie Stobart Logistics plc (ESL:AIM), the AIM-quoted cash shell which holds a 49% equity interest in the trading entities of Eddie Stobart ("Eddie Stobart Group"), a leading UK end-to-end supply chain, transport and logistics group, has been notified that Eddie Stobart Group has acquired the "Eddie Stobart" and "Stobart" brands from a subsidiary of Stobart Group Limited (STOB:LSE), the main market listed aviation and energy group

The Company has been notified that as part of this transaction:

· a total cash consideration of £10 million is payable by the Eddie Stobart Group trading entity, Eddie Stobart Limited, of which £4 million is deferred (with £2.5 million payable in December 2020 and the remaining £1.5 million within 36 months), and will be funded from existing cash; and

· Stobart Group Limited is required to change its name by 28 February 2021.

Prior to acquiring the Eddie Stobart brand, the Eddie Stobart Group used the brand under a 2014 licence agreement and an annual fee of £3 million had become payable from 1 March 2020.  This licence arrangement has now been terminated resulting in a cost saving for the Eddie Stobart Group of £3 million per annum.  The acquisition of the brand will help stakeholders more easily to differentiate between the Eddie Stobart Group's logistics business and the Stobart Group's aviation and energy businesses, as the Stobart Group will transition to a different name.

Eddie Stobart Group trading update

The Company has also been notified by the Eddie Stobart Group of the following trading update for the period since end November 2019.  

"Following the acquisition by funds managed by DBAY Advisors ("DBAY") of a 51% equity interest in the Eddie Stobart Group, the management team led by Executive Chairman William Stobart has implemented measures to reorganise and streamline the operations and increase utilisation in the property portfolio, which are expected to positively impact the full year results to November 2020.

The team continues to closely monitor the impact of Coronavirus (COVID-19) on trading. While there have been some volume reductions in parts of the business, the Eddie Stobart Group has benefited from its traditional strong exposure to fast-moving consumer and grocery goods, as well as its e-commerce related activities and volumes in these areas remain strong.

Following the injection of funding by DBAY in December 2019, the Eddie Stobart Group management team believes the group continues to be well funded in this period of uncertainty. "

In the Eddie Stobart Group update, William Stobart, Executive Chairman of Eddie Stobart Group commented:

"The safety and wellbeing of our employees is paramount to us.  The majority of our employees are front-line key workers delivering essential goods and providing a critical service across the UK.  We are all extremely proud of the professionalism and continued dedication of our workforce, delivering a strong performance for both existing and new customers throughout this challenging period.

The Eddie Stobart brand is an iconic name, linked to our core values, that should be part of the business. The acquisition will also deliver significant future cost savings and it will allow us to continue to grow brand awareness throughout the UK and Europe."

Further enquiries:

Eddie Stobart Logistics plc	via FTI Consulting
FTI Consulting	(0)20 3727 1340
Nick Hasell / Alex Le May / Matthew O'Keeffe
Cenkos Securities Plc (Nomad & Broker)	(0)20 7397 8900
Nicholas Wells / Giles Balleny / Harry Hargreaves

 

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