STOB.L Regulatory News (STOB)

Stobart Group Limited

29 June 2017

STOBART GROUP LIMITED

('Stobart Group' or 'the Group')

AGM Statement

Stobart Group, the infrastructure and support services group, will hold its Annual General Meeting ('AGM') today at 12.00 p.m. at St Pierre Park Hotel, St Peter Port, Guernsey.

At the meeting, the Board of Stobart Group will make the following statement.

We remain on track to deliver our targets of 2.5m passengers at London Southend Airport and 2m tonnes of biomass supply annually, by the end of calendar year 2018. We have also established extended targets to 2022 and we are confident that we can continue to deliver value to shareholders through this period and beyond.

Since 1 March 2017 we have generated cash of £159.7m from two transactions. In April 2017, we realised £113.3m of cash following the IPO of Eddie Stobart Logistics and retained a 12.5% shareholding in the AIM-listed business which was valued at £71.5m on flotation. The total value generated represented a significant uplift of over £120m on the year-end balance sheet value. Also in April 2017, we completed a sale and leaseback of eight ATR aircraft in our leasing company, realising £46.4m of cash. These transactions have provided the business with further cash resources to support the dividend and to invest in creating further value across our divisions.

Dividend

We reported, last month, a proposed final dividend of 4.5p payable on 7 July 2017, subject to shareholder approval at today's AGM, bringing the total dividend for the year to 13.5p per share.

The Board reaffirms its intention to maintain the increased level of quarterly dividend payments to reflect the cash generation of the Group. The Board expects to pay a dividend of 4.5p per quarter, starting from 7 July 2017, representing an annualised dividend of 18p.

Director changes

As previously reported, after almost ten years as Group CEO, Andrew Tinkler will step down as CEO on 1 July 2017 and will continue as an Executive Board member, giving the Board continued access to his input at Group level. Warwick Brady, Deputy CEO and former COO of easyJet plc, will be appointed to the Board on 1 July 2017 as CEO, subject to approval at today's AGM. Warwick will focus on delivering the targets in the Aviation, Energy and Rail operating business. Richard Butcher has not offered himself for re-election at today's AGM and will step down from the Board today, but will continue to manage the creation and realisation of value in the Infrastructure and Investments divisions alongside Andrew Tinkler.

Formation of Stobart Capital

Andrew Tinkler will also head a newly-formed independently-owned business, Stobart Capital. It will work with the Group and other investors to create value from generating and managing opportunities in sectors where we have existing expertise, such as businesses related to Aviation and Energy. Any such investments will be made directly in SPV companies, rather than via Stobart Capital itself, and alongside external investors. It is expected that these will be non-controlling interests in the short term. Stobart Capital will interface with the Group via the Value Creation Committee; a newly formed Committee of the Group Board, chaired by John Coombs, a Non-Executive Director, who has considerable experience of working with private equity arrangements within public companies. Warwick Brady will be the other member of the committee. The Value Creation Committee will present investment opportunities to the Group Board for final approval before Group investments are made.

Outlook

The Group is trading in line with the Board's expectations and a further update will be provided when it announces its results for the six months to 31 August 2017, which is expected to be made on 19 October 2017.

Andrew Tinkler commented:

"I would like to thank all stakeholders for their support over the last 10 years and I am looking forward to working with Warwick as the new CEO of the Group. Approximately 50% of my time will be dedicated to helping support Warwick and the existing businesses as an Executive Director on the Group Board. In particular, I will be using my experience and skill set to help deliver and realise the value in our Infrastructure and Investments divisions. The remainder of my time will be spent in Stobart Capital looking for strategic opportunities to support the strategy of the Group and create more value."

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