Eddie Stobart Logistics

LN: ESL

£286.4m market cap

75.5p last close

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.

Investment summary

We prudently cut our FY19 and FY20 EBIT forecasts for Eddie Stobart Logistics (ESL) by 5% and 6% respectively post the H1 trading update highlighting solid revenue growth, but EBIT at the low end of management expectations and a 4% downward revision to the last reported adjusted EBIT. Despite this, our forecast FY19 EBIT margin remains at the top end of logistics peers and, even on our revised numbers, the stock is trading at a significant discount to peers, offering an attractive c 9% dividend yield.

Y/E Nov
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2017A 623.9 55.3 37.8 9.8 7.7 8.2
2018A 843.1 62.9 49.2 11.3 6.7 34.6
2019E 969.9 71.5 57.5 12.3 6.1 4.9
2020E 1034.9 77.4 63.6 13.6 5.6 4.2
Last updated on 25/07/2019
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). Furthermore the shift to e-commerce and the high UK logistics market fragmentation offer medium-term growth opportunities for ESL.

Last updated on 25/07/2019
Sector
Industrials
Share price graph
Balance sheet
Forecast net debt (£m) 154
Forecast gearing ratio (%) 64
Price performance
%
1m
3m
12m
Actual 0.7 (24.1) (45.9)
Relative* (0.5) (24.5) (44.4)
52-week high/low 137.0p/67.5p
*% relative to local index
Key management
Alex Laffey CEO
Anoop Kang CFO