(Alliance News) - Stobart Group Ltd said on Thursday it has suspended its dividends in order to maximize capital available for further development and said its performance is in line with expectations.
The aviation, energy and civil engineering company said for the six months ended August 31, its loss increased to GBP20.9 million, compared to GBP17.5 million a year ago.
The company said its revenue for the period rose to GBP93.1 million from GBP69.4 million at the same period last year, driven "in particular by strong performance in Stobart Energy".
However, its interim loss was widened by an GBP8.5 million non-cash impairment of intangible assets in Stobart Rail & Civils, GBP3.7 million non-cash brand amortization, and GBP7.4 million of new business and new contract set-up costs.
Stobart Group has two divisions: Aviation and Energy.
Passenger numbers at Stobart-run London Southend Airport increased by 42% to 1.2 million, with around 2.3 million passengers expected for the year to February 2020.
Stobart Group said Essex airport continues to attract new airlines and is on course to deliver its target of 5 million passengers and GBP8.0 million in earnings before interest, tax, depreciation and amortisation annually by February 2023.
Meanwhile, Stobart Energy is set to become increasingly cash generative, the company noted.
Stobart Group said these two businesses have immediate growth opportunities and require further investment in order to deliver their full potential.
Chief Executive Officer Warwick Brady said: "The board has undertaken an extensive review of the capital required to fund this growth and taken the decision to suspend the dividend in order to maximize the capital available for the further development of these growth businesses."
Stobart Group said it intends to restore the dividend when it becomes significantly cash generative at an operating level. In financial 2019, the company had halved its annual payout to 9.0p from 18.0p in financial 2018.
The company noted that it continues to hold an GBP80 million portfolio of non-strategic infrastructure assets and intends to dispose them at the "right time" to maximize value to the group.
Stobart Group shares were down 4.4% in London at 117.60 pence each on Thursday.
By Loreta Juodagalvyte; loretajuodagalvyte@alliancenews.com
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