Stobart shares slide on profit warning
Network Rail and tax rises will hit earnings
green lorries warned that government spending cuts and tax rises could hit its
profits this year and next.
had “slightly reduced” its full-year profit forecast as its railway engineering
unit suffers from a dramatic fall in spending by the government-owned Network
in VAT [from 17.5% to 20% in January] and the government spending review”. It
added that rising unemployment would put further pressure on its bottom line.
of Britain’s motorway system, is a barometer of domestic trade.
buy; if people don’t buy, that will hit the business. Network Rail is not spending
any money and, since the construction industry has been on its knees, everyone
is fighting for any business that does come up.”
by reducing stockpiles. They were increasingly ordering items at the last minute,
leaving the group less time to plan deliveries, which increased costs by reducing
its “vehicle utilisation” rate. However, Stobart was able to increase revenues
by 11.7% to £243m in the first half as it benefited from significant contract
wins from Tesco and AG Barr, maker of Irn Brew, together worth about £48m a year.
in the first half.
expenditure by Network Rail and other major clients with cost savings and budget
constraints imposed by the Office of the Rail Regulator”.
for the year.