News

Nottingham-based Innovate Logistics has been put up for sale by parent company Eimskip. The Icelandic shipping company blamed losses to the tune of €74.1m (£58.9m) at Innovate for the decision, together with tough market conditions in the UK. Eimskip will write off the losses in its second-quarter figures and is now seeking a buyer for Innovate's assets.

In a statement revealing its intentions, Eimskip says that as part of Innovate's strategy it entered into long-term lease agreements for  warehouses and transportation systems, but recent market conditions resulted in lower than expected utilisation. It also says the company's lease and financial costs have significantly increased and the losses in recent months have weakened the company's financial position, which has affected ongoing operations.

In the last set of accounts filed at Companies House, for the year to 26 March 2006, Innovate reported pre-tax losses of £1.49m on turnover of £1.77m. Eimskip board members Stephen Savage and Stephen Dargavel, who were previous owners of Innovate, have stepped down. A spokeswoman for Innovate says it is "business as usual" at the company.

Transport Intelligence chief analyst John Manners-Bell believes the decision to sell Innovate is linked with the increasingly poor economic conditions in Iceland and the resulting pressure on Iceland companies. "I would say this is not a result of an issue specifically related to Innovate, but more to do with the financing of  Icelandic companies."

He expects it will be business as usual at Innovate while it is up for sale. "I think there will be a number of companies interested in buying [Innovate], be they other operators looking to expand or private equity firms. "I don't think this is a reflection on the UK market or Innovate itself."