Member Info for Gerry65

Birddog - we can only speculate, atm.

Let's see what comes to pass, don't be surprised if a deal that suits both parties comes to place and I won't be surprised if it doesn't lol.

G

Birddog - I've tried to help you here before on the point you raise, but when I do you pass it by.

STOB have undertaken a massive infrastructure project at Southend with a relatively limited capital base. Perhaps it was a huge project to undertake for such a small company, but to its credit it got there. Without Covid 2020 would likely have been the year when all the hard work and funds invested started to bear fruit, regrettably circumstances overtook it.

I can only ask you once again to review the accounts for Southend and try to project forward to a position where revenues were not eaten up by necessary capital expenditure on getting the airport from where it was to where it is now.

Capex has been substantial over recent years and the infrastructure spend does ultimately feed down into the bottom line each year. The BOD has stated that Southend's break even figure is 2.5m passenger's going forward. Pretty sure I've posted hat to you before.

If you can or are able to project forward you'll probably be able to understand why the 25% offer back in the early spring came forward and why that valued it around £800m.

As things stand STOB are facing monthly cash burn, but that does not take away from the future prospects at Southend, the relevant question perhaps is - who will actually own it over the coming years.

The Aer Lingus tender, and Stobart Air is a sale date issue, tbh when the planes were flying it was far less damaging though the historic lease agreements are challenging.

Again here Emerald see value in business - hence their tender win.

I'm not looking at this from a shareholder prospective, you understand, purely looking at the business case at Southend in particular over the coming 10 - 20 years. As to who will ultimately own it - well that's less certain.

G

Sorry for auto spell mistakes lol

G

TF - that's the way I see it on reflection - often the simplest solution for both parties.

Terms can be negotiated - not sure they will be ideal for STOB but it makes some sense.

Stobart Air employees somewhere around 600 staff, have seen figures quoted in a range between 570 - 650. They are skilled on the job and fully trained.

Birddog do we know how many trained staff Emerald has on its books atm ? It doesn't need the team in place till the start of 2023.

Similarly it doesn't need the planes till the same time. Not sure it would be looking to get into any up front lease deal until it actually needs to.

STOB has to pay lease payments in 2021 & 2022 then the break clause. If planes fig again the monthly cash burn is much less than it is atm.

I know our Govt sold a ferry contract to a company without ferries but in Are Lingus we are dealing with people with sense not stupidity lol.

Would you not say there is a case for a seamless transfer of assets here - planes and staff. Providing a deal can be struck that works for both sides.

STOB want out - Emerald want in.

STOB want to focus on Airports and Aviation Services.

Anything could happen here, let's wait and see.

Gla

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Birddog - you say there are 100's of these planes out there on very favourable terms.

Am not asking for a long list , but maybe if you could provide details of say 3 possible lease deals that Emerald could strike.

Would it not be the case that any planes available - already in service and not required by the existing airline, would in many cases be subject to similar lease commitments facing STOB ?

Again I have no detailed knowledge here.

G

Thames - I highlighted some of the comments made by WB in the media responses and RNS to TF yesterday, and wondered if there could be options available here to both Emerald and STOB.

Have no more info or knowledge than is available all on platforms out there.

Birddog - agree there will be planes floating about that need new homes. I'm guessing they will all come with long term lease arrangements. I suspect better new deals could be available. Do you have figures available on possible lease deals on the correct airplanes so we can crunch some numbers.

Btw - don't see why Emeralds would want to merely take over the existing STOB leases - unless if course a deal could be made which benefits both parties. In such a possible deal I'd expect STOB to take a short term hit to escape a longer term commitment.

I've no info here just putting out a possible way forward, amongst many.

I believe Stobart has several hundred trained qualify staff. Would make sense for Emerald to look to secure their employment. Again only throwing thoughts out there.

Gla

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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

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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

Volcano - went out for a walk mid morning, so missed the first wave here today.

Fortunately there was a second wave this afternoon, and I've just closed out just over £2.66.

Very nice little trade, this one has been a great place to come to this year. Will trade again on any dip.

For those holding for the longer term, I'd very much doubt this share will cause any sleepless nights.

May well join the party again sometime soon, though if i don't it will be because the sp got away from me, best wishes to all holders here.

Gla

G

https://www.proactiveinvestors.co.uk/companies/news/933805/spirent-retains-full-year-expectations-highlights-strategic-momentum-in-third-quarter-933805.html

G

Volcano -am in too at just under £2.54.

Will look for a short term trade up to say £2.70 + if that doesn't come i'll be comfortable holding into the new year.

G

Volcano - yep it's drifting towards that buy in level - got love these markets, for giving up opportunities.

Been watching this one all day.

G

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

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