Pre-Close Trading Statement

RNS Number : 3281B

Stobart Group Limited

20 September 2018

 

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

20 September 2018

STOBART GROUP LIMITED

('Stobart Group' or 'the Group')

Pre-Close Trading Statement

Stobart Group Limited, the Aviation, Energy and Rail & Civils business, has today issued the following pre-close trading statement before the announcement of its interim results for the six months to 31 August 2018. This announcement will be made on 24 October 2018.

Highlights

·     Aviation: Passenger numbers at London Southend Airport up by 37%; Ryanair flights starting in Spring 2019 and the easyJet partnership will drive further growth, with an additional aircraft added this summer

·     Energy: Growth of processed tonnages sold up circa 50%

·     £27.5 million net cash realised in sales from non-operating assets

·     Interim dividend of 4.5p per share declared. This will be paid on 5 October 2018 to shareholders on the register as at 14 September 2018

Stobart Group has continued to commercialise its core operating businesses, delivering operational progress in Aviation and Energy. 

At London Southend Airport, the Group has focused on improving awareness through branding and marketing, route development, and airline incentive deals to accelerate its growth. During the financial year, we accelerated the previously announced £30m to £40m investment plan, principally in relation to the franchised airline business, to enhance the value of the airport through an increase in sustainable and profitable passenger numbers. The introduction of Ryanair flights in Spring 2019 is the next step in the growth of our London airport. This significant long-term partnership agreement is expected to result in at least one million additional passengers in the first year and more than five million in the first five years.  A new agreement with The Restaurant Group to introduce six new food and beverage brands to the airport will help maximise the commercial value of these passengers.

The agreement with Ryanair gives us further confidence that we will deliver on our aim to welcome five million passengers a year to the airport by 2022. The investment in the franchised operations from London Southend Airport has contributed successfully to the attraction of other airlines to the airport. The results of the Aviation division for the full year, excluding the investment in the franchise operations, are expected to be broadly in line with expectations.

Stobart Energy has significantly increased underlying EBITDA and tonnes supplied compared to the prior year despite continued delays in the commissioning of third-party energy plants. These delays have put pressure on the supply chain for the second year running and exaggerated the impact of non-underlying costs. Therefore, the results for the Energy division will be slightly below expectations in the short term.  However, the investment in "best in class" infrastructure, including cutting-edge IT systems, means that Stobart Energy is well positioned to deliver strong profitability per tonne when energy plants are operating to target.

Stobart Rail & Civils secured framework contracts with Network Rail, Transport for Greater Manchester, and is an Alliance member for the TransPennine route upgrade. The business also renewed its partnership with the Environment Agency to deliver Emergency Response. Other contract wins include the Newton Heath and Inverness maintenance facilities contracts with Northern and Scot Rail, providing previously untapped revenue streams. The business has reviewed its revenue recognition on long-term contracts and adopted a more prudent approach. This means the results for the year are likely to be lower than expectations.

The Group has moved quickly to action the proposals set out by the Board in July designed to unify the interests of shareholders. It appointed a leading independent search firm Russell Reynolds as part of a thorough and rigorous process to refresh and further strengthen the Board. In August, the Board announced the appointment of Nick Dilworth as Executive Director and Chief Operating Officer, Ginny Pulbrook as Non-Executive Director and Michael Williamson as Interim CFO.

Warwick Brady, CEO, Stobart Group commented:

"We are reviewing all aspects of the Group to ensure we are well placed to deliver the ambitious growth targets set by the Board to double the value of the business. We are confident that we can meet our commitment to shareholders to unify the business and provide the framework for the delivery of the Company's strategy to the benefit of all stakeholders."

The person responsible for arranging the release of this announcement on behalf of Stobart Group is Louise Brace, Company Secretary.

Enquiries:

Stobart Group Limited	c/o Redleaf Communications
Charlie Geller, Head of Group Communications
Redleaf Communications	[phone]
Robin Tozer	[e-mail]
Ian Silvera
Fiona Norman

 

END

 

 

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