(Alliance News) - Stobart Group Ltd on Thursday said it is being "strict" with its finances as it safeguards its operational capability and the value of its core assets, amid the Covid-19 crisis.
The Guernsey-based infrastructure, aviation and energy company said its core operations at London Southend Airport and Stobart Energy are operating in line with expectations.
Southend Airport benefits from a "strong, uninterrupted" income from its global logistics operations, which is being boosted by the recommenced passenger flight - albeit modestly.
Stobart said: "Looking ahead, the airport remains confident in its relationships with its existing carriers and is in positive discussions in relation to the post winter schedule which starts in April, 2021.
"It is also actively engaging with a range of other low-cost carrier airlines regarding their interest in established proven routes that can be operated from next year at a low cost of operation."
Stobart Energy is progressing towards a more predictable cash generation as all plants are operational and it is able to receive contracted volumes.
Stobart said: "However, the disruption to the construction industry and the closure of recycling facilities during the initial COVID period resulted in a reduction in available waste wood, requiring the utilisation of existing stockpiles.
"In order to protect cash generation and earnings for the long-term, the business has taken the strategic decision to ensure certainty of supply for our customers over the winter period and beyond by building stock levels of waste wood."
This has put some short-term pressure on gate fee income, the company said.
Stobart Air, operating from Dublin, Cork, Donegal and Kerry, is struggling to meet expectations due to the continued quarantine arrangements in Ireland, with limited flights operating.
Stobart said guidance remains suspended as the COVID-19 situation is likely to remain uncertain.
Chief Executive Warwick Brady said: "The group is executing the strategy it set out at the time of the capital raise and is employing strict financial discipline to safeguard both the operational capability and the value of its core assets to ensure it will be positioned to respond to a recovery in demand."
Stobart has GBP119.0 million in cash and undrawn bank facilities at August 31.
Stobart shares were up 2.4% at 20.12 pence each in London on Thursday morning.
By Greg Roxburgh; gregroxburgh@alliancenews.com
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