30 Aug 2023 07:00
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30 August 2023
ESKEN LIMITED
('Esken' or "the Group')
AGM Update
Esken, the Aviation and Renewables group, issues the following update ahead of its AGM which will be held at 10am this morning.
As previously announced, we have completed the strategic review of our operating businesses and are now progressing with the sale of our core operating businesses and residual non-core assets through a managed disposal process with a view to returning any remaining value to Esken shareholders.
Renewables
Our process with the preferred bidder to acquire the Renewables division is significantly advanced and is progressing with a view to concluding an agreement, subject to shareholder approval shortly. While this is slightly later than originally envisaged, the Board currently considers that the Group's liquidity headroom remains sufficient to continue with the plans following the Group's strategic review.
The challenges Esken Renewables experienced during the financial year ending 28 February 2023 regarding biomass plant outages have continued into the new financial year but there are now signs of an improvement in gate fees and plant performance is expected to improve during the second half of the financial year.
Aviation
Following the sale of Star Handling in May 2023 the Aviation Division now comprises London Southend Airport (LSA) and a small ground handling operation dedicated to supporting LSA. The airport has benefitted during the summer season from the industry's strong passenger demand which has seen the other London Airports return to pre pandemic passenger levels. The partnership with easyJet has seen the schedule grow from 3 destinations to 7 with increasing frequency and strong load factors being experienced. This has encouraged easyJet to add additional routes with Alicante, Amsterdam, Geneva and Paris to operate through the winter this year.
Against this positive backdrop, discussions continue on an expanded summer schedule for 2024 with a number of airlines who recognise the growing capacity constraints at London airports and the strong offering from LSA in terms of operating cost and passenger experience. The Jet Centre has also continued to see positive traction in demand for its services.
The decision taken by the Esken Board to sell the airport in order to crystallise shareholder value and secure the right long-term partner best placed to support future growth has been reinforced by this market momentum. While early in the process, we have been encouraged by the initial level of interest from a range of parties who recognise the long-term strategic value of LSA. We will be focussing our engagement over the months ahead, with the objective of achieving the best outcome for stakeholders.
Non-core operations
The previously announced sale of the interest in the Mersey Biomass Energy plant completed on 3 August 2023 with the Group receiving proceeds of £9m. Discussions continue to progress on the remaining non-core assets with a view to realising value for shareholders.
The remaining two aircraft of the original eight leased by Propius following the demise of Stobart Air are due to be returned to the lessor by mid-October. Landing gear overhaul on one of the previously returned aircraft agreed with the lessor will then bring to a conclusion all guaranteed lease payments and return condition obligations in connection with Propius. The final outcome will be within the amounts previously provided in the accounts.
In line with the stated strategy for managed disposals and the ultimate wind down of the Group, we have undertaken a consultation with staff at Group level and commenced the implementation of a phased redundancy plan to reduce central costs as disposals are completed.
Looking ahead, the Board's focus is on completing the disposal of the Renewables division to reduce debt and provide support to the growth of LSA as we progress the discussions to achieve a sale of this key strategic asset.