Stobart on track to ‘unify group’ and achieve targets

Stobart Group said it has acted swiftly to unify the business following its bruising Summer board room battle.

In a pre-close trading update today it revealed progress in all divisions, and reiterated its determination to stabilise the Carlisle-based group after former chief executive Andrew Tinkler’s bid to oust chairman Iain Ferguson at the annual general meeting in July.

Its statement today said it had appointed a leading independent search firm Russell Reynolds, as part of a thorough and rigorous process to refresh and further strengthen the board.

“In August, the board announced the appointment of Nick Dilworth as executive director and chief operating officer, Ginny Pulbrook as non-executive director, and Michael Williamson as interim CFO.”

Mr Ferguson has also pledged to step down before next year’s AGM.

Today’s update, before the announcement of the group’s interim results on October 24, also revealed that its aviation division enjoyed a 37% increase in passenger numbers at its London Southen Airport operations.

Ryanair flights will start next Spring, and it said its partnership with easyJet will drive further growth, with an additional aircraft added this Summer.

Stobart’s business plan for the airport envisages five million extra passengers over a five year period.

The energy division reported an increase in processed tonnage of around 50%.

It said it has significantly increased underlying EBITDA and tonnes supplied compared with the prior year, despite continued delays in the commissioning of third-party energy plants.

This will lead to slightly lower results, compared with expectations, in the short-term, but the group said: “The investment in ‘best in class’ infrastructure, including cutting-edge IT systems, means that Stobart Energy is well positioned to deliver strong profitability per tonne when energy plants are operating to target.”

Stobart Rail & Civils secured framework contracts with Network Rail, Transport for Greater Manchester, and is an Alliance member for the TransPennine route upgrade.

Contract wins include the Newton Heath and Inverness maintenance facilities contracts with Northern and Scot Rail, providing previously untapped revenue streams.

However, the group said the business has reviewed its revenue recognition on long-term contracts and adopted a more prudent approach which means the results for the year are likely to be lower than expectations.

Today’s update also revealed that Stobart has realised £27.5m in net cash from sales of non-operating assets in the six month period.

Chief executive Warwick Brady said: “We are reviewing all aspects of the group to ensure we are well placed to deliver the ambitious growth targets set by the board to double the value of the business.

“We are confident that we can meet our commitment to shareholders to unify the business and provide the framework for the delivery of the company’s strategy to the benefit of all stakeholders.”