Stobart Outlook Cautious Despite Strong Performance In First Half

(Alliance News) - Stobart Group Ltd on Wednesday said it was trading in line with market expectations in the six months to the end of August and continues to make "strong" commercial progress in its two core divisions.

In the Aviation unit, passenger numbers at London Southend Airport have increased by 42% in the first half compared to the same period last year, Stobart said, driven by the start of Irish budget airline Ryanair Holdings PLC flights in April, Scottish regional airline Loganair flights in May and the continued growth of British low-cost airline easyJet PLC.

The aviation, energy and civil engineering firm also highlighted that, from Tuesday next week, Hungarian low-cost airline Wizz Air Holdings PLC will start flying from London Southend Airport to three new destinations. These new routes will help support the continued growth in passenger numbers, Stobart highlighted, in line with its target of reaching five million passengers per annum by February 2023.

"Given the ongoing uncertainty in the sector, in part caused by Brexit, the group is taking a cautious approach to passenger forecasts in the short term, with the board working on the basis of 2.3 million passengers for the year ending February 2020. This would represent an increase of 53% versus the previous year," the company said in its statement Wednesday.

Turning to the Energy unit, the volume of waste managed, which is predominantly processed into waste wood fuel, increased by 148,000 tonnes to 806,000 tonnes, Stobart said. This is equivalent to a run rate of 1.7 million tonnes per annum, representing a 22% increase on the same period last year. The continued improvement in performance was boosted by the energy recovery plants that Stobart Energy supplies under long term contracts, the company said.

Stobart will announce its interim results on November 14.

The stock was trading 0.9% higher in London on Wednesday at 128.93 pence a share.

By Evelina Grecenko; evelinagrecenko@alliancenews.com

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