25 April 2017

Q:      Why have you decided to become a public company, and why now?

A:      Given our growth in the past two or three years, we think the timing is right to become a public company.  It also allows us to pay down debt and provides a much stronger financial platform for us to grow the business, whether that's organically or through selective acquisitions.

Q:      Does Brexit, and its potential impact on UK business and European distribution, give you any cause for concern?

A:      To date, with all of the discussions around Brexit, we've seen no impact.  Clearly, we don't know what's going to come out of Brexit yet because no-one does. What I am confident in is that we will be allowed to move across borders.  Our European business is an important part of the network.  It's something we plan to leverage.  Yes, there might be some restrictions moving back and forwards across the channel, but we've had them before and this business has worked through them.  I'm confident that, whatever is put in place, it will still facilitate free movement back and forwards.

         The UK market has had its ups and downs over recent years.  Our model is designed to enable us to flex up and down by circa 20 per cent for trucks and drivers, so we've got some inbuilt flexibility, should we see a downturn, to be able to react to that to protect margins.

Q:      How much of DBAY and Stobart Group's holdings have been offered for sale?  What does the ownership structure look like now?

A:      Both of our existing investors - DBAY and Stobart Group - are selling down.  Post IPO, Stobart Group will own 12.6 per cent, DBAY will holding 14.9 per cent and the rest of our investment base will be made up of institutional investors.

Q:      What, if any, will the relationship with the Stobart Group be after listing?

A:      The relationship with Stobart after listing - they'll be an investor and one of many investors we have.  They will have no involvement in running the company.  In fact, if you look, for the last two years it's been a very hands-off relationship.  Yes, they've had two seats on the Board and they've been involved in signing off the strategy and the plans, but going forward it's about Eddie Stobart, it's not about Stobart Group.

Q:      You've introduced an employee share scheme.  How does it work and who is eligible?

A:      All existing Eddie Stobart employees will be eligible to participate in the share incentive programme.  The staff is what this business is about.  I joined the business back in 2015 and I was immediately impressed by the staff and their passion for the business.  It's them that has put us in the position to list the business.  It was absolutely important to me and the Board that they realise part of the success through the SIP, the share incentive programme, that we're implementing.

Q:      Will this mean any change in strategy?  What are your plans for the funds raised by the listing and your newly-arranged debt facility?

A:      The strategy that we've briefed out into the market is the strategy that we will pursue.  That strategy sees us focusing into the four sectors – Manufacturing and Industrial, E-commerce, Retail and Consumer.  Clearly, I believe that our model is unique in terms of the pay-as-you-go nature of our transport operations and the dedicated multi-user warehouse operations we run.  We will continue to invest in these.  We will continue investing in customer service.  Both of them will drive both organic growth within the existing customer base, and allow us to add new customers.  In addition, as part of the IPO, we are also acquiring the iForce business, which is complementary and accretive in terms of value to the business.  I would hope to follow that up with additional acquisitions, should the opportunity arise.

Q:      You've said you're going to pay dividends.

A:      Yes.  As the Board, we've committed to pay a progressive dividend policy, with a 55 per cent pay-out ratio for full-year 2017.

Q:      Your market can be affected by a lack of suitable drivers.  Given your growth plans, might this be an issue?

A:      There was an impact in our markets back in 2014, when new legislation came in involving drivers.  That's since corrected itself.  Within Eddie Stobart we pride ourselves in our training induction for our driver population.  We've had no issues with drivers to date.  We've got various different schemes to attract drivers into the business.  We train out warehousemen to become drivers, so we put them through a full licence acquisition programme.  We also train people from the standard car licence to a large goods vehicle licence through our training academy.

Q:      You lease the Eddie Stobart brand.  Is this not a significant cost and risk for the business going forward?

A:      There's no cost of the brand to the business until 2020.  Thereafter, we have a number of options.  Option one would be we rent the brand on an annual basis for £3 million.  Option two is that we buy a perpetual licence for £15 million.  Option three is we rebrand.  We'll consider all our options as we move forward and whatever we do will be in the best interest of the business and investors going forward.

Q:      What does the new Board look like?

A:      Before I focus on the new Board, I think it's important to emphasise that the people running Eddie Stobart today will be the people running Eddie Stobart as we move forward.  The same for the iForce business that we'll acquire.  We've got some real skill and expertise in these two organisations which it's important to me we retain.  In addition to that, the Board will be headed up by Philip Swatman, ex Rothschild's, our new Chairman, and supported by two other non-executives, and myself and Damien Harte, our Finance Director.

Q:      How do you think the company and the haulage market will look in, say, five years' time?

A:      If we look at the market today, the market in the UK and Europe is a £70 billion market.  It's still growing.  Eddie Stobart now is active in additional sectors of that market.  Historical sectors of Consumer and Retail have been added to by Manufacturing and Industrial and E-commerce, so I would fully expect us to grow, and grow not just within transport, grow right across the supply chain in terms of the customers we serve today, and adding new customers, and also looking at acquisitions.

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