The journey may not be so smooth for Stobart Group

As Stobart Group lowers its expectations for 2010, Graham Spooner, investment advisor at The Share Centre explains why investors may want to consider the group for the longer term.

"Stobart Group, famed for its named lorries, caused concern for investors this morning as it announced it would be lowering its profit expectations for 2010 and is wary of what next year will bring.

"Results for the first half of 2010 were positive as profit increased 39% to £15.4m. The truck division performed well, winning a number of new contracts with the likes of Tesco and soft drinks company, A G Barr.

"Although the logistics group expects their rail division to be the weak link, its strategy to diversify across a number of areas of transport enables it to remain positive. The group hopes other areas of the business will to continue to develop and win new contracts.

"By continuing to diversify and by moving in to other areas such as airports, we feel the group may still have some longer term attractions for investors. However, we do warn investors that with expansion comes increased costs and potential risks"