LOGISTICS group Stobart will concentrate on improving margins through cost cuts and efficiencies at its transport and distribution arm rather than driving revenues, it said today.

The Warrington-based business said changes in customer patterns due to the volatile economic conditions disrupted operations in the six months to August 31.

However, the introduction of better information systems have enabled the firm to adapt and return to expected profit rates.

Stobart unveiled interim results today that showed revenues had risen 15.3% to £281.1m, but pre-tax profits had fallen from £15.4m to £14.7m.

The transport division is the biggest contributor, accounting for £13.7m of pre-tax profits this period.

Chief executive Andrew Tinkler said today that, having restored profit rates to expected levels, the emphasis will now be to improve margins through controlling costs.

However, its growing biomass business is expected to drive new growth for the transport arm and its international division has benefited from niche contracts transporting Formula 1 and rally teams for European events, boosted by a deal to transport F1 tyres for manufacturer Pirelli.

He also revealed that the port operation at the Widnes multi-modal hub is now handling around 100,000 containers a year.

The biomass arm came under the full control of the group in May with the acquisition of the remaining 50% stake and realised a pre-tax profit of £400,000 in the six month period.

It is now exporting from six ports, in Liverpool, Avonmouth, Shoreham, Plymouth, Hull and Cardiff and has shipped 34,000 tonnes of wood to Scandinavia, compared with 2,000 in the previous year. This is expected to rise to 250,000 tonnes in a five year deal.

The new estates division is making progress and achieved a £4.5m pre-tax profit compared with £1.8m, while the infrastructure and civil engineering arm saw pre-tax profits improve slightly from £1.1m to £1.2m.

Stobart’s air division comprises London Southend Airport and Carlisle Lake District Airport and doubled pre-tax profits to £200,000.

Easyjet will offer 70 flights a week from Southend from April next year and the airport is expected to benefit from Olympic Games traffic next summer.

Mr Tinkler said today: “We have delivered a robust performance across the group despite a tough market for transport.

“Our new strategy is being implemented and we are well positioned to deliver strong results in the medium term.”