7 Mar 2016 07:00
7 March 2016
STOBART GROUP LIMITED
('Stobart Group' or 'the Group')
Pre-Close Trading Statement
Stobart Group, the infrastructure and support services group, issues the following pre-close trading statement prior to the announcement of its results for the year ended 29 February 2016 which is expected to be made on 12 May 2016.
Stobart Group expects underlying results in line with management expectations and ahead of last year, with infrastructure exceeding our expectations.
Stobart Energy is the UK's leading supplier of waste wood biomass fuel. Our target is to supply over two million tonnes of biomass fuel annually by 2017/18. Management is focussing on the fuel supply chain ahead of new biomass plants expected to be commissioned through 2017.
Stobart Aviation comprises the operations of London Southend Airport, Carlisle Lake District Airport and the investment in Stobart Air. Our target is to achieve 2.5 million passengers annually by 2018 at London Southend Airport. As expected, passenger numbers were lower than prior year, as we worked with easyJet under a new long term contract to improve load factors and yields with a view to growing volumes again in the near future. We are in talks with a number of major operators regarding sustainable new routes to achieve our growth plans by 2018.
The Rail division continues to increase external revenues with another year of growth whilst maintaining margins and has a strong order book for the year ahead from long-term rail infrastructure projects for Network Rail.
The Investment division includes Eddie Stobart Logistics and Propius. Eddie Stobart Logistics, in which the Group has a 49% interest, continues to grow in line with management expectations and has used cash generated from operations and from the profitable disposal of the UK automotive business to reduce debt, increasing the value of the Group's equity investment. Propius Holdings, the aircraft leasing company in which the Group has a 33% interest, sold two older aircraft in November 2015 and returned a cash distribution of £4.3m to the Group.
The Infrastructure division has produced a strong performance with strategic management of sites improving valuations of investment properties. In December 2015 we purchased an investment property which we had held under a long lease at Speke in Liverpool. This has given the Group the opportunity to enhance its value and we expect to improve the value further during the next financial year.
Andrew Tinkler, Chief Executive Officer, said
"We have a stable platform for growth in our Energy and Aviation divisions, complemented by profitable realisations from our infrastructure portfolio. The Board is focussed on fulfilling the long-term biomass fuel supply agreements that are already in place in the Energy Division and on attracting new operators and passengers through our award-winning London Southend Airport over the next two years. Achieving these targets will create significant value for shareholders.
We have realised net cash of over £24m from asset disposals in the year. Cash generation from these assets will assist the Group in the payment of dividends whilst the growth divisions mature. The Board will consider further distributions of surplus cash generated on future asset realisations."
Enquiries:
Stobart Group +44 12 2888 2300
Andrew Tinkler, Chief Executive Officer
Ben Whawell, Chief Financial Officer
Redleaf Communications +44 20 7382 4730
Charlie Geller
Harriet Lynch
Influence Associates +44 20 7287 9610
Stuart Dyble
James Andrew