Infrastructure firm furloughs 750 staff as board take 20 per cent pay cut

Infrastructure firm Stobart Group is putting half of its 1,500 workforce on furlough under the government job retention scheme.

The company has also announced its board is taking a 20 per cent pay cut.

The Carlisle based firm runs London Southend Airport and Stobart Energy.

The firm and management team has announced a series of measures to deal with the current crisis.

• A freeze on all capital expenditure spend other than where it is considered critical for safety reasons. All discretionary spend has also been deferred;
• Stobart Group is using the UK Government’s Job Retention Scheme to put on furlough 50% of Stobart Group’s 1,500+ employees as of 1 April 2020. All employees in continuing roles that allow them to work from home are doing so;
• The board and senior leadership have agreed to 20% pay reductions and all other non-furloughed management have accepted 10% pay reductions;
• A recruitment freeze has been in place since early March and all variable pay awards have been deferred to August 2020 at the earliest;
• Stobart Group has utilised all measures made available by government to help conserve cash.

The firm says it is looking at further measures as it is still not clear how long the crisis will last.

Stobart say it is not possible to provide financial guidance for the full year at present and is withdrawing all previously made guidance.

London Southend Airport’s customers have, for the most part, suspended operations, with airlines taking the opportunity to ground fleets at London Southend Airport.

Over 20 aircraft are currently based on the airport’s stands. Wizz Air continues to operate a reduced service of three weekly flights to Bucharest.

Loganair continue to operate flights to Aberdeen and Derry three times a week, and these Wizz Air and Loganair operations are served by a skeleton airport staff.

The airport’s global logistics operation continues to operate as normal.

Stobart Energy is currently maintaining its operation with renewable energy plants continuing to require waste wood fuel in order to generate circa two per cent of the UK’s electricity needs.

Drivers and associated employees have been assigned key worker status.

The significant slowdown in construction alongside the closure of local authority-operated household waste and recycling centres has reduced the volume of new waste wood being made available.

The low levels of available waste wood may impact on future gate fee pricing for an extended period.

Stobart Energy is in talks with its renewable energy plant partners to discuss options to accept different specifications of waste wood fuel.

As a precautionary step, Force Majeure or Pre Force Majeure notices have been issued to the majority of major renewable energy plant partners.

Chief executiveWarwick Brady said:”The challenges presented by the rapid spread of the COVID-19 virus have been significant.

“However, I am immensely proud and humbled by the response of our people to this global crisis. We have acted at pace to put in place steps to safeguard our business in the immediate term, and our people have consistently understood and supported the actions we have taken.

“Despite the current challenges presented by the COVID-19 virus, we continue to own and operate aviation and energy assets with significant underlying value. There remain significant medium and long-term opportunities to further increase the value of the assets for our stakeholders.

“We are maintaining regular communication with our partners and ensuring we are well placed to get back to full operation quickly once this exceptionally challenging time has passed.”