LONDON (Alliance News) - Stobart Group Ltd on Wednesday said revenue rose sharply in its most recent financial year, with particularly strong growth in Aviation, but it swung to a loss as a result of investment, legal costs, and non-cash items.
Shares in Stobart were up 10% at 129.50 pence in morning trade.
Revenue from continued operations for the year ended February 28 totalled GBP146.9 million, up 39% from GBP105.4 million, as Aviation division revenue jumped 53% to GBP39.4 million from GBP25.8 million.
Adding to this, Energy division revenue rose 19% to GBP65.1 million from GBP54.7 million and Rails & Civils revenue grew 28% to GBP52.3 million from GBP41.0 million.
Stobart - an aviation, energy, and civil engineering company - posted a pretax loss of GBP42.1 million, swinging from a GBP109.3 million profit the year before.
According to Stobart, the loss reflected investment in its Aviation and Energy division, as well as one-off legal costs and non-cash items "resulting from the intention to ensure a de-risked balance sheet".
Included in non-cash items was GBP16.3 million of depreciation from continuing operations - versus GBP13.4 million in financial 2018 - as well as GBP7.8 million worth of impairment charges relating to infrastructure assets, compared to no such impairment in 2018.
A GBP3.2 million impairment related to loan notes was also included in non-cash items, versus nothing in financial 2018.
Other operating income dropped to GBP1.3 million from GBP133.5 million, and the company recorded a GBP1.7 million loss after tax from associates and joint ventures compared to a GBP3.5 million profit the year prior.
Operating expenses increased 34% to GBP152.8 million from GBP113.7 million.
In February 2019, Stobart was part of a consortium - Connect Airways - that successfully bid for budget airline Flybe. Stobart simultaneously sold Stobart Air and entered an agreement to sell its Propius Holding Ltd aircraft leasing business.
Stobart has a 30% shareholding in Connect Airways, alongside Virgin Atlantic which has 30% and Cyrus Capital with 40%.
Stobart has proposed a 3.0 pence per share final dividend, down from 4.5p per share in financial 2018. This halves the total dividend per share for the year to 9.0p from 18.0p.
For Stobart's 2020 financial year it decided to rebase its dividend, shifting to equal payment of 3p per share paid twice per year for 6p total, in order to fund its growth plan. The rebased dividend is to "remove GBP44 million of cash requirements from the business over the next 12 months".
Looking ahead, Stobart is focused on developing London Southend Airport, as well as an energy business with long-term contracts for 2 million tonnes of biomass fuel per annum.
"Stobart group has a clear focus on developing infrastructure assets in the aviation and energy sectors. These are high growth assets with strong market positions that are now well positioned to become increasingly cash generative," said Stobart Chief Executive Warwick Brady.
"We will invest in accelerating the growth of our aviation and energy businesses through existing cash resources and further non-core asset sales. By doing this, we can deliver sustainable operating cash flows and significant long-term value for shareholders," Brady added.
