Stobart rescue for chilled food group

Jul 2 2008 by Alistair Houghton, Liverpool Daily Post

TRANSPORT group Stobart has rescued 1,300 jobs by buying a chilled foods distributor out of administration.

The Warrington-based group says its deal for Nottingham-based Innovate Logistics’ chilled distribution business gives it a “low risk” way of expanding in the chilled food market.

Stobart bought the business from administrator BDO Stoy Hayward for an undisclosed sum.

The enlarged group will now have more than 1,800 trucks and will employ 5,300 people across the UK and Europe.

The bulk of the jobs expected to be saved under the deal are based in Innovate’s Nottingham headquarters.

Innovate, which was owned by Icelandic shipping company Eimskip, went into administration on Monday.

Its former parent group put Innovate’s assets up for sale in mid-June, after writing-off £58.4m of losses.

Stobart said that the acquired operation had “minimal” book value, but is expected to generate around £100m a year in turnover and boost group earnings within the first full year.

Stobart will take on 280 tractor units, 350 trailers and associated warehousing from the Innovate business under an initial six-month contract with BDO.

Group chief executive Andrew Tinkler said: “This is a low risk way of increasing our presence in the chilled market, giving our customers more choice and flexibility. It is entirely in line with our strategy of building the group.

“Our management team has a great track record of getting logistics operations to work efficiently and profitably. As we have done very successfully in the past, we will apply our operating model to these contracts and integrate the operations fully into the Stobart Group.

“We are committed to safe-guarding the jobs of 1,300 people who may otherwise have been unemployed and we look forward to welcoming them to the group.”

Stobart listed on the Stock Exchange last year after its reverse takeover of Westbury Property Fund and its takeover of Widnes firm O’Connor Group. It employs around 500 people at its administrative centres in and around Warrington.

Stobart was advised on the Innovate Logistics deal by Liverpool law firm Halliwells.

alistairhoughton