STOB.L Regulatory News (STOB)

14 May 2015

Stobart Group Limited

("Stobart" or the "Group")

Results for the year ended 28 February 2015

Stobart Group Limited, the Support Services and Infrastructure Group, today announces its results for the year ended 28 February 2015.

Group overview

Stobart Group is an entrepreneurial company applying its recognised logistics and customer service expertise to create:

· The UK's number one supplier of waste wood biomass fuel to renewable energy plants

· A major new London Airport in Southend

· A leading civil engineering provider to Network Rail

· A diverse portfolio of investments and infrastructure and property assets

Operational highlights

· Increased volume of biomass tonnages supplied by 29% to 1.17 million tonnes

· In the last quarter Stobart secured four major long-term customer contracts to deliver an additional 1 million tonnes of biomass from March 2017

· Passenger numbers at London Southend Airport increased by 9% to 1.09m passengers.

· Planning permission secured and construction underway for air/road freight distribution centre at Carlisle Lake District Airport

· Completion of partial disposal of the Transport and Distribution business in April 2014 for £195.6m

· Continued with stated strategy by realising good value from mature assets during the year, generating £27.2m cash

Financial highlights

· Revenue from continuing operations up 17.6% to £116.6m (2014: £99.2m)

· Underlying EBITDA £17.7m (2014: £22.6m)

· Operating cash flow £5.8m (2014: £7.8m)

· Net debt reduced by over 85% to £19.1m with a gearing ratio of 4.7%

· Basic earnings per share from underlying continuing operations of 2.6p (2014: 0.6p)

· Proposed final dividend of 4.0p per ordinary share (2014: 4.0p)

· £34.8m returned to shareholders through share buyback programme

· Combined with dividend payments, Stobart returned £54.6m to shareholders in the year

Chief Executive Andrew Tinkler commented:

"We have made good progress with the implementation of the final stage of Stobart Group's growth and value creation strategy. We have focused primarily on delivering value in our two high growth divisions of Energy and Aviation.

In addition, we have driven external projects in our Rail divisions whilst helping develop less mature internal infrastructure assets. Our Infrastructure division has also continued to realise value for our mature property assets."

FULL YEAR RESULTS SUMMARY

Divisional underlying profit summary

* Underlying divisional EBITDA is measured before internal rents.

Enquiries:

Chairman's Statement

In my first report as Chairman in 2013/14, I outlined the value created by the Group from selling 51% of its interest in the Transport and Distribution business. In the 12 months following this transaction we have been focused on creating a platform to secure long-term growth, with particular attention on our Energy and Aviation businesses. We believe we now have the right structure and people in place to deliver on our strategic objectives.

Stobart is a people orientated, forward-looking Group, with an entrepreneurial spirit and strong heritage at the heart of the business. The Stobart brand has a very strong identity and has been built on our renowned logistics skills, relentless attention to detail, consistent customer focus and efficient operations. It is through further utilising our core expertise that we will drive the Stobart business and brand forward into the future.

It has been another encouraging year of strong performance and we remain on track to deliver our strategic targets. During the year we have hit a number of milestones including securing our future energy supply volume targets with six customer contracts signed in the year. Having successfully secured these supply contracts, the Energy division is now moving into the next phase, concentrating on efficiently servicing the long-term volume.

At London Southend Airport, we are working towards securing longer term passenger volumes and are in constructive discussions with a number of potential airlines. Our Rail business has had a good year with growth in external work. Our major investment, Eddie Stobart Logistics Limited, is performing in line with expectations.

The Group has a strong balance sheet supported by a high value of property assets with minimal debt. In January we announced the completion of a £50m four-year revolving credit facility with Lloyds Bank plc. This replaced a number of existing facilities and provides the Group with additional committed standby liquidity over the period of the business plan and provides greater funding flexibility.

Results 

• Revenue up 17.6% to £116.6m driven by strong growth in our Energy and Aviation divisions.

• Solid underlying profitability with underlying EBITDA of £17.7m and underlying profit before tax of £9.3m.

• Overall loss for the year after non-underlying items of £1.2m.

• De-risked balance sheet with gearing of 4.7% and net debt reduced by over 85% to £19.1m and a new undrawn £50m credit facility.

Board

2014 has been a year of change for the Board and we believe that the Board, and its Committees, now have an appropriate composition and blend of backgrounds, skills and experience to fulfill our duties effectively. This was reinforced this year with a robust and largely positive external Board evaluation. 

Michael Kayser and Paul Orchard-Lisle stood down from the Board at the AGM (26 June 2014). Paul Orchard-Lisle continues to contribute to the business, as Chair of the Property Operating Board. On behalf of the Board, I would like to thank Michael and Paul for their commitment and contribution to the Group and wish them well in the future.

On 1 July 2014 Richard Butcher was appointed Executive Director, after 18 years with the Group. Richard has extensive knowledge and experience working with our business and we are delighted to welcome him to the Board. On the same date, we were also pleased to welcome John Garbutt and John Coombs to the Board as Non-Executive Directors. John Garbutt has joined the Remuneration Committee as Chairman and has also joined the Audit Committee and Nomination Committee. John Coombs has joined the Remuneration Committee, the Audit Committee and the Nomination Committee.

Dividend and Cash Return to Shareholders

During the year £34.8m was returned to shareholders through a share buy-back

programme. Together with dividends paid, a total of £54.6m was returned to shareholders.

An interim dividend of 2.0p was paid on 5 December 2014. The Board is proposing a final dividend of 4.0p (2014: 4.0p) per ordinary share totaling £13.1m (2014: £13.2m paid on 4 July 2014) and giving a maintained total dividend for the year of 6.0p. We expect to maintain our current dividend payment level and will continue to partially fund it from property disposals in the short term.

The Board remains confident in the opportunities for our growth businesses and the strategic infrastructure that underpins them. We remain committed to creating shareholder value and have demonstrated our ability to secure the long-term growth needed to achieve our strategic aims.

Iain Ferguson CBE

Chief Executive's Statement

We have made good progress with the implementation of the final stage of Stobart Group's growth and value creation strategy. We have focused, primarily, on delivering value in our two high growth divisions of Energy and Aviation. In addition, we have driven external projects in our Rail division whilst helping develop less mature internal infrastructure assets. Our Infrastructure division has also continued to realise value for our mature property assets.

Energy

Our biomass fuel supply business has continued to progress strongly towards its volume and profit targets. Our success is measured by the performance of contracts where delivery has commenced and by securing new long-term contracts for future delivery.

We are focused on managing the sourcing, processing and delivery of wood biomass as efficiently and effectively as possible. Increases in landfill tax have tended to increase product availability and we expect market conditions, including the recovery of the construction industry, to continue to drive a healthy level of supply. As market leader in this sector we have been able to select a portfolio of projects to support through to financial close in locations where we can match demand for fuel to the availability of material, minimising the cost of logistics.

Our main KPI in this division is the annual volume of biomass fuel supplied to customers. Our target is to supply over 2 million tonnes per annum of biomass to the required specification at a suitable, sustainable margin on long-term, index-linked contracts by the 2017/2018 financial year.

The past year has seen growth in the supply and transportation of biomass to 1.2 million tonnes, up 29% from last year. We expect to see further growth this summer as the Evermore plant in Northern Ireland commences, requiring 115,000 tonnes per annum, and we continue to increase volumes with existing plants in the UK as well as the export market.

In the last quarter of our financial year we signed four major long-term customer contracts for an additional 1 million tonnes for delivery from March 2017.

Aviation

Our main KPIs in this division are passenger numbers and revenue per passenger. The infrastructure and new management team are in place to deliver our target of over 2.5 million passengers annually by 2018 and we have created capacity to handle up to 5 million passengers per annum through the new terminal.

In the past year, we have grown passenger numbers travelling through London Southend Airport by 9% to 1.1 million and increased revenue per passenger by 8.5% to £20.80.

We offer significant peak capacity availability and fast turnaround times at a low cost base for airlines that want a hassle-free experience for their customers. Access to the airport is good with a regular rail connection to Liverpool Street Station taking around 50 minutes and plenty of parking availability for passengers travelling by car. Our customers are important to us and after listening to them we improved the new terminal catering facilities and developed safer and more efficient security arrangements. For the second year running we received the Which? award for airport customer satisfaction.

We are seeing interest from a number of large European operators who consider London Southend Airport a very attractive option to serve the London market. In the short term we are expecting passenger numbers to remain flat while we build these partnerships with new operators and extend relationships with existing operators to deliver sustainable routes.

Rail

This division has seen further growth in external works in the last year with revenue up 35%. We expect this trend to continue with more spend predicted on the national rail infrastructure over the coming years. As a specialist contractor to the railway industry we see exciting opportunities ahead.

In addition to our rail expertise, we have secured non-rail civil works for third parties, in particular green energy power plant works. This will remain a focus for the division as we enter new sectors and offer new services. To support the development of non-rail civil works, we have strengthened management and introduced new skills into the business.

The Rail division continues to provide valued engineering services on internal projects, for example with the development of a 310,000 sq ft distribution centre for partners such as Eddie Stobart Logistics and EDF Energy at Carlisle Lake District Airport. Stobart Rail is also developing our processing site network for the Energy division which will ensure supply to meet our biomass commitments.

This division is also using its engineering expertise to explore the opportunity for extraction of timber from under-managed woodland in the UK to support our Energy division with wood not suitable for other purposes.

Our main KPIs for the Rail division are third party revenue and EBITDA. Our aim is to grow third party rail and other civil works whilst delivering a safe, quality product on time and on budget.

Infrastructure

The Stobart strategy is to realise mature businesses and assets when they reach their optimum value. We have been successful in this strategy through the Infrastructure division where we have generated £27.2m of cash from disposals in the year which, as previously identified, has been used to support our dividend. The Moneypenny property portfolio has generated an ROI of 20.7% since it was acquired in 2012. This disposal strategy will continue in the coming years.

In addition, we continue to manage our less mature assets to deliver their full potential at the point of sale. Moving forward the Infrastructure division will invest in processing sites for our Energy division which will improve profitability for our long-term biomass contracts by processing up to 50% of the product required on our own sites.

The principal KPI for this division is the cash generation from asset sales as we continue to realise the value in our mature assets and build value in others whilst developing complementary operational sites.

Investments

Eddie Stobart Logistics continues to perform well and we expect the new management to grow this business over the coming years in the private sector.

Propius owns ten ATR-72 aircraft which are leased to Stobart Air and continues to deliver good returns as expected, with the opportunity to grow.

The key is ensuring local management achieve forecasts targeted in their plan, with support from the Group where our experience can add value.

Returns to Shareholders and Reduced Debt

Since the partial disposal of the Transport and Distribution business in April 2014 we have returned to shareholders £54.6m in dividends and share buybacks. We have also de-risked our balance sheet during the year by reducing net debt from £127.9m to £19.1m giving us a year end gearing of 4.7%.

Our People

Over the past year we have implemented a people-focused strategy enabling our team to work collaboratively toward achieving our business goals. This strategy is underpinned by our core values of entrepreneurialism, efficiency and customer service. Our training and development programmes have been tailored to align with the specialist nature of the different areas of business. Stobart Group has also implemented a new Group-wide induction programme that has been rolled out to all new and existing employees.

Brand

Stobart Group has a long heritage and is a strong brand, which is recognised as one of the UK's 'Superbrands'. This brand is associated with logistics expertise, and customer service, and these skills are at the heart of what we do now. We use our logistics expertise to source and deliver biomass, and ensure London Southend Airport runs smoothly. We apply our customer focus to ensuring biomass fuel supplies arrive, and passengers depart on time. It is this focus that has helped us to secure a 29% increase in the tonnages of biomass supplied this year, and be voted best UK airport in Which? customer satisfaction survey. We are also able to use our brand, long track record and sizeable business to reassure biomass customers and airlines that we are a stable business capable of meeting, and indeed exceeding, their expectations for years to come.

Outlook

Good progress has been made in the delivery of our volume targets for the Energy and Aviation divisions. We continue to realise value from mature assets and businesses. Our focus is now on getting new airlines into London Southend Airport, finalising our supply chain for the Energy division and driving external works in the Rail division.

As a company we remain focused and confident that Stobart Group's strengths and expertise will continue to prevail. We are well placed to deliver good returns for our shareholders now and into the future. I would also like to take this opportunity to thank the Board and every Stobart employee for their passion, hard work and dedication during the year.

Andrew Tinkler

Financial Review

I am pleased to report strong revenue growth and underlying profitability in our operating divisions, and a de-risked balance sheet.

Revenue

Revenue from continuing operations has grown by 17.6% to £116.6m driven by increased tonnages supplied and passenger numbers in our Energy and Aviation divisions respectively. External revenue in our Rail division also increased by 35.3% to £21.1m.

Profitability

* Underlying EBITDA represents underlying earnings before interest, tax, depreciation and amortisation, non-underlying items and internal rents.

Underlying EBITDA

Underlying EBITDA is our key measure of profitability for the business. Underlying EBITDA in our support services divisions has grown by 69.4% to £18.8m, and by 9.1% to £12.0m excluding the Investments division which has benefited this year from the inclusion of the results of our 49% share in the Eddie Stobart Logistics business.

Underlying EBITDA overall has fallen by 21.6% to £17.7m due to the reduction in EBITDA from the Infrastructure division in which profit on disposals and property revaluations were at a lower level than in the prior year. Central function costs and eliminations have reduced by 31.1% partly due to licence income from Eddie Stobart Logistics and a lower amount of internal profit elimination in the Rail division.

Depreciation

Depreciation has increased by 17.5% to £6.7m after the purchase under finance leases during the year of most of the vehicles used to transport biomass products. These vehicles were previously used under operating leases.

Finance costs

Finance costs (net) reduced by 85.2% to £1.7m as bank loans with M&G Investment Management Limited and GE Real Estate Finance Limited were fully repaid in the year.

Non-underlying items

The charges in relation to the non-cash amortisation of the brands and contracts are expected to continue in future periods.

Taxation

The tax credit on continuing activities of £1.4m (2014: £0.4m charge) reflects an effective rate of 14.8% (2014: 3.9%). The effective rate is lower than the standard rate of 21.2% as deferred tax assets have not been recognised in respect of tax all losses where utilisation of these losses is uncertain.

Discontinued operations

On 10 April 2014, the Group disposed of a controlling interest in the Transport and Distribution business for gross consideration of £239.7m. The transaction leaves the Group with a remaining 49% interest in this business, via its investment in Greenwhitestar Holding Company 1 Limited, which is accounted for as an associate. The Group's share of the results of this business since the transaction are reported in the Investments business segment. The results of the disposed business for the period up to disposal, and the profit on disposal of £10.6m, are included within discontinued operations.

Business segments

The business segments reported in the financial statements are different from those reported in the prior year. The business segments are Energy, Aviation, Rail, Investments and Infrastructure. These new segments represent the operational and reporting structure of the business following the partial realisation of the Transport and Distribution business.

Earnings per share

Earnings per share from underlying continuing operations were 2.6p (2014: 0.6p).

Dividends and share buybacks

The Board is proposing to maintain the dividend level with a final dividend of 4.0p per share which, subject to approval of shareholders, will be payable to investors on the record date of 29 May 2015, with an ex-dividend date of 28 May 2015, and will be paid on 3 July 2015.

During the year, the Group purchased 26.4m of its own shares for £34.8m and these shares are held as treasury shares at the year end.

Balance sheet

The net asset position has reduced by £54.9m following the £34.8m purchase of treasury shares and payment of dividends of £19.8m.

Non-Current assets

Property, plant and equipment of £221.9m (2014: £246.6m) has reduced following the reclassification of £43.9m of development land assets at Widnes and Carlisle as inventory within current assets. This has been partially offset by additions of the vehicle assets used within the biomass business.

Investment in associates and joint ventures of £57.8m (2014: £15.8m) include the Group's 49% share of the Eddie Stobart Logistics business and 33.3% share of Propius Holdings Limited. Investment property of £20.9m (2014: £30.9m) represents the holding of three (2014: seven) properties.

Amounts owed by associates and joint ventures of £10.3m (2014: £5.1m) represent interest bearing loans to renewable energy plant investments in which we also hold equity.

Intangible assets of £116.2m (2014: £120.2m) include the Stobart and Eddie Stobart brands, and goodwill which principally relates to the biomass business. The ownership of the Stobart trademarks and designs was retained by the Group following the partial disposal of the Transport and Distribution business and the Eddie Stobart brands are licenced to the disposed business under a licence agreement.

Current assets and current liabilities

Current assets include £43.9m of development land assets previously reported within non-current assets. Excluding this land the net current assets at year end totals £5.9m.

Debt and gearing

The Group realised net cash (after fees) of £189.6m for the partial disposal of the Transport and Distribution business, including a £13.7m licence premium from Eddie Stobart Limited. At the same time the £100m variable rate loan with M&G Investment Management Limited was fully repaid and the facility was terminated. Also fully repaid during the year was the property loan with a balance last year end of £74.9m. This was repaid out of restricted cash held last year end, of £68.1m, and proceeds from property sales in the year. The debt at year end is all finance lease debt mainly on the vehicles used in the biomass supply business.

The Group has a new £50m variable rate committed revolving credit facility with Lloyds Bank plc with an end date of January 2019. This facility was undrawn at the year end.

Operating lease commitments have reduced in the year, mainly due to the trucks and trailers used in the Biomass business now being held under finance lease or owned outright, compared to their being leased under operating lease in the prior year.

Cashflow

Cash generated from continuing operations of £5.8m was affected by the required build-up of working capital of £1.6m in the biomass transport business which was transferred from Eddie Stobart Logistics with no working capital, and also affected by the non-underlying restructuring costs and new contract set up costs.

Net cash flow from investing activities included net cash proceeds from the partial disposal of the Transport and Distribution business and net proceeds from disposals of property assets of £27.2m.

Net cash flow from financing activities included full repayment of the £100m bank loan with M&G Investment Management Limited, full repayment of the £74.9m investment property loan with GE Real Estate Finance Limited utilising all £68.7m of restricted cash, the purchase of own shares of £34.8m and dividends paid of £19.8m.

Ben Whawell

Consolidated Income Statement

For the year to 28 February 2015

Consolidated Statement of Comprehensive IncomeFor the year to 28 February 2015

Consolidated Statement of Financial Position

As at 28 February 2015

Consolidated Statement of Financial Position, Continued

As at 28 February 2015

Consolidated Statement of Changes in Equity

For the year to 28 February 2015

Consolidated Statement of Changes in Equity

For the year to 28 February 2014 (Restated)

Consolidated Cash Flow Statement

For the year to 28 February 2015

Consolidated Cash Flow Statement, Continued

For the year to 28 February 2015

Notes to the Consolidated Financial Statements

For the year to 28 February 2015

Accounting Policies of Stobart Group Limited

Basis of preparation and statement of compliance

The financial information set out in this preliminary announcement is derived from but does not constitute the Group's statutory accounts for the year ended 28 February 2015 and year ended 28 February 2014 and, as such, does not contain all information required to be disclosed in the financial statements prepared in accordance with International Financial Reporting Standards ("IFRS"). The financial information has been extracted from the Group's audited consolidated statutory accounts upon which the auditors issued an unqualified opinion.

The preliminary announcement has been prepared on the same basis as the accounting policies set out in the previous year's financial statements.

The financial statements of the Group are also prepared in accordance with the Companies (Guernsey) Law

2008.

Stobart Group Limited is a Guernsey registered company. The Company's ordinary shares are traded on the

London Stock Exchange.

Going Concern

The Group's business activities, together with factors likely to affect its future performance and position, are set out in the Chief Executive's Statement and the financial position of the Group, its cash flows and funding are set out in the Financial Review.

The Group has considerable financial resources, together with contracts with a number of customers and suppliers. The financial forecasts show that the Group's remaining borrowing facilities are adequate such that the Group can operate within these facilities and meet its obligations when they fall due for the foreseeable future.

After making enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the financial statements have been prepared on a going concern basis.

Presentation of Consolidated Income Statement

The presentation of the Consolidated Income Statement has been amended in these financial statements to show the underlying results and non-underlying results, including non-underlying items included in the Group's share of profits of associates and joint ventures, in separate columns. These non-underlying items are material incomes and expenses, which because of their nature, infrequency or occurrence, or the events giving rise to them, merit separate presentation to allow shareholders to better understand the financial performance of the period. Underlying operating profit and underlying profit before tax are non GAAP measures which comprise operating profit and profit before tax respectively before non-underlying items. The columnar format is considered to be the clearest method of presentation of this information.

Segmental information

As reported in May 2014 the Group has revised its internal reporting structure. The new operating segments within continuing operations are Stobart Energy, Stobart Aviation, Stobart Rail, Stobart Investments and Stobart Infrastructure.

The reportable segment structure is determined by nature of operations and services.

The Stobart Energy segment specialises in supply of sustainable biomass for the generation of renewable energy.

The Stobart Aviation segment specialises in operation of commercial airports and includes a joint venture investment in an airline.

The Stobart Rail segment specialises in delivering internal and external civil engineering development projects including rail network operations.

The Stobart Investments segment holds non-controlling interests in a transport and distribution business and an aircraft leasing business.

The Stobart Infrastructure segment specialises in management, development and realisation of Group land and buildings assets as well as investments in energy plants.

The Executive Directors are regarded as the Chief Operating Decision Maker (CODM). The Directors monitor the results of each business unit separately for the purposes of making decisions about resource allocation and performance assessment. The main segmental profit measure is earnings before interest, tax, depreciation, amortisation and internal rent and is shown before non-underlying items.

Income taxes, finance costs and certain central costs are managed on a Group basis and are not allocated to operating segments.

No segmental assets or liabilities information is disclosed because no such information is regularly provided to, or reviewed by, the Chief Operating Decision Maker.

Inter-segment revenues are eliminated on consolidation.

Included in adjustments and eliminations are net central costs of £6,504,000 (2014: £9,020,000) and an intra-group loss of £287,000 (2014: profit £542,000).There is also external income within adjustments and eliminations which comprises brand licence income, merchandising income and income from other business services.

Discontinued Operations

Partial Disposal of the Transport and Distribution Business

The Group disposed of a controlling interest in a substantial proportion of the Transport and Distribution business on 10 April 2014. The Group has retained a 49% interest in the business, which is accounted for as an associate in the year. The environmental transport business unit, which was previously part of the Transport and Distribution business, was also retained and its results are reported in the Energy segment.

The results of the disposed business have been reported separately as a single amount presented within discontinued operations. The operation represented a separate major line of business.

The profit from discontinued operations of £6,850,000 (2014: £21,929,000) is attributable to the owners of the Company, with the exception of £nil (2014: £10,000) that is attributable to the minority interest. There was no loss recorded on remeasurement to fair value less costs to sell.

The consideration received for disposal of the business was £239,700,000, comprising of cash of £190,600,000, including £13,700,000 for the issue of a licence premium, loan notes of £5,000,000, and fair value of the remaining 49% of the business of £44,100,000. The fair value was based on an enterprise value calculation taking into consideration the significant new debt within the business. The loan notes were repaid on 24 April 2014. The profit on disposal recorded within discontinued operations was £10,563,000 after deducting fees and other costs directly related to the disposal.

The license premium is being amortised over six years, being the period over which Eddie Stobart Logistics has the right to use the Eddie Stobart brand for no additional consideration.

Underlying profit before tax of the Transport and Distribution business of £25.3m in 2014 reflects the profit before tax of £21.0m plus the amortisation of acquired intangibles of £0.1m plus the restructuring costs £3.2m plus the transaction costs of £0.4m plus the loss before tax in respect of the chilled pallet network business of £0.6m. The chilled pallet network business was first reported as a discontinued operation in the financial statements for the year to 28 February 2013 and represented a separate major line of business.

The above profit on partial disposal of business of £10,563,000 is calculated as proceeds of £239,700,000 less costs of disposal of £8,642,000 less net assets disposed of £220,495,000.

The revenue from one customer amounted to more than 10% of the Group's discontinued revenue. The revenue from that customer reported within discontinued operations was £14,547,000 for the year to 28 February 2015 (2014: £201,351,000).

The accounting for the Group's share of the results of the remaining 49% of the business requires identification of the fair value of the investee's identifiable assets and liabilities including intangible assets.

The share of the post tax results of the associate for the year of £2,200,000, included in the Consolidated Income Statement total of £2,507,000, includes a share of non-underlying items totalling a cost of £4,190,000.

Non-Underlying Items

Non-underlying items included in the consolidated income statement comprise the items set out and described below.

New business and new contract set up costs comprise costs of investing in major new business areas or major new contracts to commence or accelerate development of our business presence. These costs include marketing costs, establishment costs, legal and professional fees, losses and certain staff and training costs. The costs in the current year were in relation to the development of business at London Southend Airport.

Transaction costs comprise costs of making investments or costs of financing transactions that are not permitted to be debited to the cost of investment or as issue costs. These costs include costs of any aborted transactions.

Restructuring costs comprise costs of integration plans and other business reorganisation and restructuring undertaken by management. Costs include cost rationalisation, brand harmonisation, site closure costs, certain short-term duplicated costs, asset write downs and other costs related to the reorganisation and integration of businesses. These are principally expected to be one off in nature. The costs in the current year were principally in relation to site restructuring in Stobart Energy and restructuring the terminal security operations at London Southend Airport.

Impairment of property, plant and equipment charges are considered to be non-recurring, due to their nature, and outside of the normal activities of the Group.

Amortisation of acquired intangibles comprises the amortisation of intangible assets including those identified as fair value adjustments in acquisition accounting. The charge in the year is principally in connection with amortisation of the brand assets.

Non-underlying items included in the share of post-tax profits of associates and joint ventures all relate to the investment in Greenwhitestar Holding Company 1 Limited. Transaction costs relate to the cost of the partial disposal transaction, restructuring costs include costs of the restructuring of the Automotive business and amortisation of acquired intangibles includes amortisation of the customer relationships.

Non-underlying finance costs of £8,090,000, which are not included above, comprise the costs associated with the early repayment of debt balances. Costs include repayment fees, associated issue costs written off and directly related professional fees. The costs in the year were incurred in connection with the repayment of a £100,000,000 variable rate loan with M&G Investment Management Limited and repayment of a substantial proportion of a property loan with GE Real Estate Finance Limited.

Dividends

A final dividend of 4.0p per share totalling £13,117,033 was declared on 14 May 2015 and subject to shareholder approval will be paid on 3 July 2015. This is not recognised as a liability as at 28 February 2015.

Of the £13,891,000 dividend in July 2013, £334,000 was settled by the issue of shares under a scrip offer.

Financial assets and liabilities

The obligations under finance leases and hire purchase contracts are taken out with various lenders at fixed or variable interest rates prevailing at the inception of the contracts.

The bank loans at the prior year end included a £100,000,000 variable rate group finance arrangement. This loan was fully repaid on 11 April 2014. Also included in bank loans at the prior year end was a £74,864,000 property loan. On 9 January 2015 the property loan was fully repaid. The bank loans at prior year end also included £15,000,000 drawn on a £20,000,000 variable rate committed revolving credit facility with a facility end date of February 2016. This facility was fully repaid on 26 January 2015 and replaced with a new £50,000,000 variable rate committed revolving credit facility with a facility end date of January 2019. This £50,000,000 facility was fully undrawn at 28 February 2015.

Included in cash at the prior year end was £68,130,000 of 'Restricted cash' held in an asset proceeds account and its use was restricted to reinvestment in new property assets or repayment of the property loan. This Restricted cash was used to repay a substantial proportion of the £74,864,000 property loan on 3 March 2014 and subsequently the remaining property loan was fully repaid on 9 January 2015.

The loan notes were issued in connection with the acquisition of Stobart Biomass Products Limited on 19 May 2011. These loan notes were fully repaid on 5 March 2014.

Non-underlying finance costs of £8,090,000 (2014: £nil) includes the early repayment fees payable in connection with the two substantial repayments set out above as well as the write off of the debt issue costs carried in relation to the repaid amounts.

The Group was in compliance with financial covenants throughout the year and the previous year.

Note to the consolidated cash flow statement