LONDON: Stobart Group, the aviation and energy group, announced that its wholly owned subsidiary Stobart Group Brands LLP has sold the Eddie Stobart and Stobart trademarks and designs to Eddie Stobart Logistics for a total consideration of £10 million.

Stobart Group will change its name prior to February 2021. However, there are a number of Stobart divisions that will continue to use the brand for up to 36 months after completion and this will be licenced on a royalty free basis from Eddie Stobart Logistics.

Stobart Group Brands LLP owns the Eddie Stobart and Stobart Group brands and all associated intellectual rights. In February 2014, Stobart Brands entered into an agreement to licence the Eddie Stobart Brand to Eddie Stobart Logistics in consideration of a £13.7 million premium fee as part of the initial partial sale of the Eddie Stobart business. That 15-year licence agreement provided the first six years to 29 February 2020 royalty free.

Post 1 March 2020, a licence fee of £3 million per annum became payable until February 2029. However, that agreement was terminable by Eddie Stobart Logistics on six months’ written notice. The annual licence fee was also conditional on Eddie Stobart Logistics achieving certain  performance targets. If Eddie Stobart Logistics did not achieve these performance targets  in any given year, the £3 million licence fee was to accrue and only become payable at subsequent dates once these performance targets had been achieved.

The sale of the Eddie Stobart and Stobart brands now will result in an immediate cash receipt. It will also have the effect of helping investors and stakeholders to more easily differentiate between Eddie Stobart’s logistics business and Stobart Group’s aviation and energy businesses through Stobart Group transitioning to a different name.

The value of the gross assets of the Stobart Brands as at 31 August 2019 was £34 million. The profits before tax for Stobart Brands for the year ended 29 February 2019 was £Nil. The cash consideration will be used for general working capital purposes. The fair value of the brand in the consolidated statement of the financial position at 29 February 2020 will be £10 million, reflecting the cash consideration receivable.

Warwick Brady, CEO of Stobart Group, said: “Stobart Group is proud of the brand it has built over many years. It is an iconic and highly recognisable name, associated with great customer service.

“However, the brand is primarily associated with the highly visible Eddie Stobart lorries. This has often created confusion for investors and other stakeholders between the Eddie Stobart Logistics business operations and Stobart Group’s focus on developing a valuable London airport and a high margin energy business.

“By selling the brand now we can realise value for our shareholders and differentiate our businesses, establishing a new name that reflects our future in aviation and energy.”