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Volano - lot's of trading reports coming up this week :
https://www.lse.co.uk/news/uk-earnings-trading-statements-calendar-next-7-days-u4qrj6x77ydvt7x.html
G
TF - so hot air in your view then ?
G
Castle - to me it depends on if STOB can offload Stobart Air.
Reading the "Financial Highlights" paragraph in the recent half year report:
- Cash and unused RCF's on 31/08 was £119m
- monthly cashburn, excluding capex, for Stobart Group's core business (excluding Stobart Air and Propius), was reduced to an average of c.£2.0m per month.
- In Aug for Stobart Air and Propius the cash burn for those businesses was an additional £3.6m
It seems to me that without Stobart Air, there is sufficient time to get the Energy Division up to 2019 performance, to allow a sale to be progressed. Even with limited Aviation revenues.
The new RCF's are due to be renewed in Jan 2022, on a base case there may be a breach of covenants around Nov 2021, around the time the RCF's renewal discussions will likely commence.
Under a "severe but plausible downside forecast" - the BOD says that the Group may require additional funding by February 2022 and may breach covenants in May 2021.
Severe but plausible includes :
- There is no disposal of Stobart Air and Propius before the end of the forecast period (February 2022);
- Assumed additional passenger volumes do not materialise for summer 2021 at LSA;
- There is an unplanned shut down for 3 months at a major plant serviced by the Energy division; and
- Additional cash outflows of approximately £13m for certain provisions, liabilities and contingent liabilities to reflect the risk of crystallisation during the going concern period.
It needs to find a new home for Stobart Air, first and foremost.
If Covid doesn't impact again on the Energy Division- it should take care of itself.
Solutions to safe flying could do with being in place by March 2021.
Think we'll have a clearer picture by Feb end, both as regards any sale of Stobart Air and possible re introduction of air travel. It's going to be tight lol.
Further funding is quite likely, it's timing probably depends on Stobart Air.
I'll keep looking for trading dips, but i'll say again - i don't have any real skin in the game here, just my trading profits over the years, and past divs. kindly offered up, so I'd say I'm probably much more relaxed than someone who may be underwater, with funds invested here.
gla
G
TF - final two paragraphs of the RNS :
"Whilst a disappointing decision by Aer Lingus, we believe that Stobart Air is a strategic and attractive asset for a potential buyer with number of options open to it in terms of continued operations beyond its current franchise agreement with Aer Lingus. It is well placed to build on eight years of reliable, customer focused connectivity between Ireland and the UK and utilise its European Air Operator Certificate to operate out of Ireland and seek further franchise or independent flying arrangements."
"Stobart Air can also leverage its valuable slot portfolio, and its position as Europe's largest and most experienced operator of ATR aircraft and enter negotiations with the new Aer Lingus franchisee given the anticipated interest in those assets."
So using the European Air Operator Certificate , together with leveraging the slots. - Hope, hot air or potential options ?
What do you think ?
Guess we'll find out soon enough.
G
TF - on ADFVN chat is around whether the Stobart Air situation is baked in as it was written down on take back, however, that doesn't allow for ongoing cash burn, whilst the routes are cancelled and the planes are grounded. Nor the ongoing lease commitments, and break costs.
As you say it needs to be dumped asap. Be helpful in the shorter term if ways can be found to get back to safe flying.
https://www.thebusinessdesk.com/northwest/news/2069685-stobart-air-blow-as-aer-lingus-signals-end-to-commercial-agreement
What is your take on the last paragraph, quoting WB saying :-
“Stobart Air can also leverage its valuable slot portfolio, and its position as Europe’s largest and most experienced operator of ATR aircraft and enter negotiations with the new Aer Lingus franchisee given the anticipated interest in those assets.”
Looks like today's rise is on the back of the Moderna vaccine news.
G
Agree LtCaptain - the loss of the Aer Lingus tender is a blow to STOB's efforts to off load Stobart Air. The tender represents its main business, and due to covid19 it's fleet is presently pretty much grounded atm.
So limited revenues and lease payments continuing, will pose additional challenges to the BOD's aim to complete a sale by Feb end.
Look for an RNS tomorrow morning, short term pi's need to consider whether an sp south of 15p is more likely than an sp north of 35p.
Perhaps lending shares back to the market, with the view of re buying at lower levels could be considered.
Would expect NT on trades early doors tomorrow.
Never a dull day with STOB.
Gla
G
I think the impact is coming Monday. It's going to be more difficult to sell Stobart Air now.
Would have thought this would have had more impact on the share price than it did. Southend has so much potential going forward. Management need to be sure of the right strategy , can’t afford any more carnage.
Volcano - Looks that way though, that drop on SPT yesterday was a gift, and it would have been rude to turn it down.
An easy trade, it as simply oversold yesterday.
STOB - will bounce around and offer up further opportunities, I've no doubt.
That's probably me done now for the week.
G
Gerry,
looks like we could had better return here than SPT.
STOB 26.20 +2.25 +9.39%
Gerry,
FTSE 100 is recovering this morning loses and looks like could be in the blue anytime.
This was the best four days of trading for a while, what would Friday the 13'th will bring?
Would be nice SPT at £2.50 but i can not see another 10% drop
Sorry - should say this site can be very slow sometimes
It's a bit red out there only a few sector in the blue.
Shall look in later when these site has settled down and is working faster
G
Hi Volcano - not sure of the direction of travel this morning so am sitting it out early doors.
Will check out my usual suspects may well look for things to settle down to find new trading ranges.
Checked out RNS from NG. & LGEN where I have long term div holds, together with ITV this morning.
This siteis slow for me this morning, am seeing the revolving blue circle too often.
Maybe a day for reviewing old favourites I tend to stick to shares where I've done ok in the past. Do you think there is still mileage in SPT it's off its high after a great run, could be a dip buy it's below £2.70 to buy this morning. Sub £2.50 might be worth a play.
Btw this message has taken ages to get done this site change very slow sometimes.
G
RR and 3i looked good for trade this morning but i was to slow to act ,i might just have few days off
Gerry ,
I feel like i am reading a book this morning lol, but should be less RNS tomorrow ,always is Fridays.
good luck today ,anything in mind to trade?
Volcano - some nice gains there, be interesting to see whether markets settle down, or continue to push north.
Need to look for new trading ranges for trades. ( UU. looks quite warm at £9.33 ).
G
Mm games at the end of day .dropped 1p in last half hour .trades certainly do not support that sort of drop .
Gerry, my latest trades as i mention this morning, i love days like this ,lol .
Ocado 2,314.00 2,318.00 2,134.00 +150.00 +6.93%
London Stock Exchange 8,460.0 8,462.0 8,150.0 +198.0 +2.40%
Hikma Pharma 2,613.00 2,615.00 2,474.00 +120.00 +4.81%
Even better opportunity today -just topped up with some more. i.e. The last business statement this month from Stobart said whereas obviously the pax numbers are less the difference has been made up to some degree by increase in freight. I see this continuing as we go into the formal Brexit and Stobart are well positioned for both the London distribution with Southend airport and with the North for Carlisle airport. Imagine how busy they will be when the passenger nos return as well as the freight.
Hi Volcano - I sold my UU on the Boris election bounce @ £9.11 having held them for 2/3 years and picking up nice safe divs. ( 13/12/19 -I sold them along with a number of other shares - as I suspected Brexit was going to prove challenging for Doris in 2020, and I wanted to take profits and return some of my long termer's to cash, to go again, after he'd messed it up ).
They then rose to £10.50 by Feb 2020 and it looked like I'd sold too early - Then bang - lockdown 1 was announced and they dropped to circa £7.65 on 23rd March.
UU has hit £10.50 twice in the last 5 years but tends to trade in the £8 - £9 range.
It's a safe Div share, and pays out around 42p pa
@ £8 a share that's a return of 5.25 %
@ £9 a share that's a return of 4.66 %
Neither of which are too shabby.
Its popped through £9 with this weeks rise, it's around £9.20 to buy as I type.
Historically that's above it's upper range. It may be a trading play when the results come out on the 25th, depending where the sp sits, but it looks a little warm for me taking a trade @ £9.20 - you'd need a further 45p for a 5% day trade.
As a safe long term div share it's a decent buy, but I'd rather pick it up at sub £8.50, if the market offers it up at that level in the next few months. KIV ex div date is mid Dec for an early Feb interim payout.
Watch it shoot up to £11 on the half year results, now I've said that !! lol
G
Gerry , looks like i might have sold CPI bit to early ,TLW and PMO are moving today,
have you looked in to UU it is on the move.
This is hard work i am supposed to be retired and take thinks easy ,lol
Volcano - I was buying and selling TLW from its dip down to sub 10p back in Feb,through the Spring and early Summer. I kept some of my profits on the table - when I perhaps should have sold when it approached 40p in June. they have been on the back boiler since. Haven't traded TLW for a little while now, but the rise today on the back of the Uganda sale is pleasing.
G