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The author of that piece is wrong, SEN did not re-brand as London Southend Airport in 2012, but rather at the end of 1993, when the company was founded by Regional Airports Ltd, after having been taken over from Council municipal operation.
The CAA has counted Southend as a London airport since the 1950's.
TF Re London, It's not just a 'PR consultancy' opinion. Britains Civil Aviation Authority lists Southend as a London airport, and so do IATA.
The distance and train journey time is not too different to Stansted airport.
Also it is accepted fairly generally that the centre of London, if you like the economic locu, has and continues to shift eastwards.
Grain of truth in your other points.
Don't buy Orph it's too risky imho...
TF - Yep TOSCA topped up in June - but they also picked up a major holding at the beginning of the year before the pandemic hit the sector.
You may have a point regarding regional airports - Fortunately Southend is one of the London 6 Hub airports, if it's not maybe it won the 2019 award under false pretences ! - Copied the Which award details below for you and it deffo says "Best London Airport"
https://southendairport.com/news/ranked-best-airport-2019
Guess we'll have to wait to find out what Southend is worth, time will tell.
In the meantime STOB needs to maintain a weather eye on cashflow, uplift the Energy Division revenues, lose Stobart Air, and sit out the virus, like all other airports.
Do you not agree it's worth looking at the position at the other London Airports, for some comparison. Wouldn't want to be living within the Luton Borough Council, area, which has now lent Luton Airport over £400m and has lost the income, it normally receives from Luton Airport to balance it's spending requirements , also more Council loans to come there I believe. Bet they wish it had an Energy Division to fall back on - emmmm :
https://www.lutontoday.co.uk/news/politics/councils-ps60m-loan-luton-airport-company-approved-private-executive-committee-2974406
Did the council not say when it lent the last tranch of £60M that without this additional funding, LLAL could become insolvent and cease trading, council could then lose control of the airport, and the benefit of the income it generates altogether. Good grief !
So with the June placing STOB has cleared all Bank debt for the time being and reduced it's overdraft interest coss for the time being, in addition "M=medium to long term" Bond £50m funding interest costs are factored into cash flow projections.
Will happily present the position at other airports for comparison if required. My point is that the financial holes created by the virus issues in competitor London Airports, will have to be resolved and recovered, over coming years - in my view this will filter down to ultimately to customers.
G
Hi Moni - ( agreed - never use a sentence when a paragraph will do lol ).
Sorry mate - the STOB sp will likely move around a bit but i doubt anyone who has read your posts on this bb will ever believe you'll own STOB shares, we know / you know it'll never happen. Other may take opportunities when offered up - think I sit in that group.
What's the "crack" over on ORPH today - who are those "pesky" de rampers that you wish to starve of oxygen !
They are prob traders who having made a turn on the recent tick up, are looking to talk it down again, to get a re entry point, having sold out recently when it approached 30p.
I was going to pop over and lend you a hand with some thoughts and wisdom - not sure I'd be very helpful though lol.
Did you retain all your HVO shares on the t/o back in January ? Think you said you bought in at 24p again this month. So short term will we see 30p or 20p over there ?
G
Gerry... I'm glad you said that you "rambled on........" why say something in 20 words when you can use 200 instead ...lol
Now all I want to know is when I'm getting my sub 10p entry price?
TF - ah ah - I rambled on for so long I ran out of space.
To finish off for the present what I was saying was it's pointless to take a bet with you as you outline the BODs reported ongoing strategy.
Rails and Civils moved on - tick
Stobart Air next on the list - hopefully
Non core assets as and when
Energy Division in the medium term probably after a minimum of at least one full year of post virus related revenue delivery.
We will continue to chat meantime I'll consider and look for trading opportunities, to collect more "free shares". You never know if news comes on Stobart Air I may be tempted to take a longer term trade - maybe with a three - six month outlook, in addition to the ones I've collected over the years.
Still think 75p a share post Stobart Air could be a very attractive t/o position. Say £470m in total, to prise away Tosca's shareholding, picking up north of £200m for the Energy Division within say 18 - 24 months. Limited bank debt atm. Non core assets say bet. £30 - £40m - less your worrying bond £50m - that's roughly net £260 -£270m for the airport. Pre covid the 25% low ball offer inducted a valuation of circa £800m
Note you didn't put forward a different view. No doubt you will lol. Btw only speculation on my part, anything could happen here. Just a bit of fun !
So is the STOB sp in the teens a punt, a value trap or an opportunity. Who knows. Considering the limited no of posts here you may say - who cares ? Lol.
Off for a very wet walk.
Gla
G
TF - I rarely look in over the weekend but it's wet and windy out there I'm likely to get slightly damp on my morning walk.
Strangely we agree on so many areas but come at things slightly differently.
Agree bonds have annual interest costs for STOB these have been included in cash flow calculations. The bond matures in May 2924, the BOD know this as did it's bankers when they increased the two RCF's to £120m so did Tosca when it added to it's holding during the June placing. As you say it's a non - current liability. I know you understand that bonds are a very useful way for Co's to raise funds, for cap ex which is exactly what STOB have done, like pretty much the majority of listed Co's.
The reason I asked you to look at other airport owners financials and debt positions was for some degree of comparison, and balance. As I've mentioned before STOB are very fortunate to have the revenues from its Energy Division, I don't believe this is the case for other airport owners. Have you seen the position at Luton - the latest £60 council loan takes the amount Luton Airport now owes the local authority to £400m. The other airports are suffering similar losses as has been reported.
These losses will need to be recovered over coming years. Short haul will recover very quickly in my view, once effective airport fast testing systems are introduced and approved. There will be pent up demand for short haul holiday breaks in the Spring after a further 5 months of lock downs. I've re booked 2 holidays this year. I aim for 3/4 a year. I'll certainly be catching up when I deem it safe. Will be looking at 5/6 holidays next year if possible.
Southend may seem to be out on a limb to you from your prospective , up north lol. However it is part of the London hub and has massive potential. I have not used the airport as I live closer to Heathrow and Gatwick but I have used Luton and Stanstead both once any only once, sorry but they were not for me.
Southend is low cost to carriers, and I suspect it will prove attractive once again once the sector can resolve present issues. All London Airports will have to assess how they are going to recoup and repair the financial costs of the virus over coming years, would you not agree it's likely that this will ultimately filter down to the future passenger's ? I'd suggest to you that comparatively speaking ( size of losses / passenger no's / financial costs / loss per passenger no's) STOB and Southend may weather this far better than other London Airports particularly as it has an additional source of revenue.
It's only a personal view, and one which you are welcome to disagree with, but I think Southend will find itself well positioned as planes start to fly again. There is no doubt it wins awards year on year for its passenger experience, it has railway station with swift access from London.
Don't understand what you are saying re Cyrus - sorry.
It would be pointless taking a bet with you w
lol TF - yep you did - intangibles now halved.
Bank debt repaid from placing funds ( soon to be utilised again )
Carlisle - a side show, as we've debated time and time again.
Dividends were paid from the sale of non core asset sales, I should know I received most of them lol Don't forget if STOB had held onto it's ESL holding rather than selling it down over the years divs would not have been paid and its value in the books would have needed a major write down. Very fortunate for STOB you could almost suggest they saw it coming lol.
Agree - the present team have tackled many of the "Tinkler" legacy issues. The sale of Stobart Air if it comes to pass will substantially de - risk the balance sheet, it will be a real positive for STOB and its ongoing cashflow, and additionally make well make it super attractive for a t/o bid - only my speculation.
Turing to corporate bonds - did you have a figure as to how many will come up to maturity for Co's across the FTSE 100 / FTSE 250 / Small cap between now and STOB's does in May 2024 ?
What was your view on my question regarding weather the owners of Heathrow / Gatwick / Luton / Stanstead have bonds outstanding ? How do you think their trading figures will look for 2020 ?
The decision by Cyrus to take FLYBE out of administration is interesting, I suspect there will be consolidation within the sector.
Make sure you tune into the Second Investor Presentation.
gla
G
Ah Ah Ah Moni - just a little pure speculation from me and why not lol.
Do you think you might read the interims RNS or listen in to the 2nd investor presentation. Emmm.
Sorry for the latest bunch of typos from me - stubby fingers and rushing to get to the gym
Keep up the good work knocking back those unbelievers over on AVCT and ORPH.
G
Gerry...what's it like in Never Never Land? I assume Peter Pan is still flying around fighting pirates. Unfortunately this fairytale is going to end up as a horror story, despite all the Fairy Dust that you're sprinkling around on here...Having said that the market never reacts rationally, so even if the results are dire, the SP will probably bounce..
Interims out 4th Nov. Interesting that the BOD is to hold a further " investor presentation" so close after the previous one.
With limited passenger flight income from Southend in the period March to August, hopefully we will be able to see the income generated from the logistics operations. Some management info on Energy performance for Sept / Oct will be helpful.
Perhaps an update on the sale of Stobart Air.
The Aviation Sector is likely to see considerable restructuring over the next 18 months. Some carriers may go to the wall, but the planes will still be there.
Look at Cyrus looking to take FLYBE out if administration, we don't have the figures yet if the deal goes through they will make interesting reading.
If Cyrus wants a carrier perhaps it might want an Airport ( only speculation Moni & TF lol ). It would probably have to pay 75p a share to prise away Tosca's holding. So say somewhere around £450 - £480 m for the whole Co. Which may become all the more attractive if Stobart Air is sold. A further plus for any potential buyer is that STOB presently has next to no debt. If you believe the RNS info rather than Moni.
Emm say £450m with the potential of a £200m windfall from the sake of the Energy Division within the next 18 - 24 months, add in the non core assets sales at £30 - £40m then knock off £50m for the bond TF
Net s out at somewhere around £260 - 270m plus for an airport worth £800m basis on the 25% stake offer prior to the pandemic. Deffo bargain territory to me lol ( but just speculation lol ).
Feel waiting for news of the disposal of Stobart And is a bit like playing chicken here. Is a buy sub 20p a punt a value trap, or an opportunity to good to miss.
Discuss lol
G
TF - will leave you to continue to fret about the bond maturing in may 2024.
Your initial concerns last year proved unfounded as I explained to you, which you kindly later acknowledged.
I guess if originally STOB had offered say 20% of the Energy Division as underlying security ( with agreement from those providing RCF s ) then it's very likely this would ever have hit your radar.
As I've suggested the majority of bonds are replaced by new bonds on maturity. If STOB actually wished to remove such a line of credit it could use the monies from the proposed sake of non. Core assets, or a small proportion of the monetized sale of the Energy Division,as at least two further options.
Atm we have Moni unable to accept that STOB has its funding in place with the business trading in line with cashflow forecasts and you with you long term focus on the bond. Both of you suggested 20p as your buy in price recently, but neither took up that option, hey ho. Lol.
Btw how many of those Co's in the FTSE100 / FTSE250 / Small Cap do you estimate have corporate bonds in place ?
How many of these mature before May 2024. Indeed how many mature before the year end ?
Whilst considering the challenges to the Aviation Sector, have you any details of bonds due to mature from the owners of London's other major airports. How do you think 2020 has hit the trading figures for the likes of Heathrow Gatwick Luton and Stanstead.
Fortunately STOB it's Energy Division as a back up. It remains my personal view that with vaccine / testing solutions short haul holiday demand will pop. Its purely my own speculation - but speculation remains the main source of comment on this bb.
Gla
G
TF - I recall your concerns around the Bond some 12 months ago when we must have posted dozens of times to each other over it following the challenges incurred by ESL. You will recall your concerns at that time proved unfounded, as I said they would prove to be. This was confirmed by RNS.
Yes May 2024 will eventually come to pass, at that time the bond may well be restructured, that's often what comes to pass - is it not ?
The majority of this future debt / liability is covered by non core assets, and at this point in time it's really is a side play, I terms of issues here, at present.
Interesting news you gave on the unit at Carlisle, you are closer to the ground up there - do you have any more info ?
I'd rather STOB kept the Energy Division but it may well be that picking up north of £200m for it will be too attractive to turn down.
We both know there are many aspects to consider when attempting to value a Co. But looking at it from a NAV prospective, a case could be made to say that considering the present sp the market is only attaching a moninal valuation on Southend perhaps not as low as £1 lol.
That said just before the virus hit, based on the 25% potential buy in offer, a valuation of £800m was not unreasonable.
Therein potentially sits the upside here. Would you not agree ?
STOB deffo sits in recovery play territory. That's part of the fun here how it will pan out is up for reasoned debate.
BTW I've mothballed my bike for the winter, ( southern softy - I know ). Will be on the exercise bike in the garage until March 2020.
Gla
G
Nige / Birddog - I like the the Energy Division, which should return to previous revenue levels for 2021 onwards. With most set up costs completed and now in place following the previous years of capex requirements and with huge barriers to entry, there should be a decent bottom line contribution, in the next Financial year.
I'd prefer that STOB retained this division, though the BOD deffo wants to monetize it. Still lets see how it pans out. It's still what 18 - 24 months away, and they'll want at least a full year of decent revenues here before putting it up for sale.
Southend is the long term play, again - here previous capex has impacted on the bottom line - though the spend, on the airport was necessary to get it to where it is now. Birddog, fairly sure you were thoughtful as to where the future break even for the airport was in terms of passenger no's. I believe it was recently quoted at 2.5m pa.
We are where we are - STOB will produce pretty grim half Yr. figures in mid November - ( Mch - Aug ), some with a glass half empty here will no doubt play on these, though it's pointless as those following STOB closely already understand from recent RNS and the Investor Presentation the position.
We still have the US election in a couple of weeks, and the ongoing "lock down"debates here in the UK, so more fun to come. News on Stobart Air would be handy, and any positive vaccine news or an effective "rolled out" airport test system - Govt. backed would be a positive.
Though PI's have been trading shares in small volumes since the June placing, the Institutional Investors have held firm.
KIV - a substantial % of STOB shares and held tightly by the Institutional Investors, which I'd suggest is the reason STOB pops upwards on positive news.
gla
G
Birddog............ "I don't understand why STOB don't focus on the energy division and bin off the Aviation. The airport and airline sector is years away from recovering back to 2019 levels. Even then, the 2019 financials for STOB were dire anyway so why pursue something with that level of loss and cash burn that will inevitably pull the whole thing down."
IMHO, Southend airport is the jewel in the crown. This is STOB's best asset, without that I wouldn't be invested. Yes I grant you, it could be a long haul from here. A vaccine will be the begging of the end of this dreadful virus, this will be the start to a recovery for STOB. I say keep Southend airport at all cost's. The energy business should help STOB get through this period. JMO.
Even if there is an upturn in the airline industry, it won't happen any time soon as we have a long winter season ahead. With airlines pulling out of Southend altogether anyway, its' likely the main London Airports will take up any extra flights before they consider Southend. I don't understand why STOB don't focus on the energy division and bin off the Aviation. The airport and airline sector is years away from recovering back to 2019 levels. Even then, the 2019 financials for STOB were dire anyway so why pursue something with that level of loss and cash burn that will inevitably pull the whole thing down.
I also very much doubt that the share price will double within 2 months. Maybe if we get some good news regarding a vaccine for this dreadful virus it could happen. The share price is beaten up, so a lot of upside potential from here.
Easy to answer that..No.
Chartist Zak Mir tipped STOB last week, he predicted a share price target of 38p within 2 months. Let's see if he's right.
could be another trading opportunities here soon
I bought back in to STOB today just before the bell @18.85p having sold last January @105p.
Reason for buying back, the STOB Market Cap is £116.86M. STOB have £119M in cash unused after RI.
I think that STOB can go 1 or 2 ways, they'll either survive and the share price will recover to over 100p, or they will go bust. Just a punt for me. The biomass business I'm hoping will pull STOB through. We may also have a vaccine within the first quarter of 2021. Fingers crossed guys and good luck to all.