Strategic review could see Esken put up ‘for sale’ sign
Esken, the North West aviation and energy group, could be putting up a ‘for sale’ sign after announcing a strategic review of the business.
The Carlisle-headquartered group, which has seen its pre-tax losses widen for the six months to the end of August 2022, has been navigating the disruption to the aviation sector following the pandemic.
It has initiated an ‘updated strategic review’ of its business which could lead to a sale or partial sale of one or both of its Renewables or Aviation divisions.
David Shearer, Executive Chairman of Esken said: “As a board we have decided to initiate an updated strategic review of our operating businesses.
“This review will consider all options for the operating businesses and may conclude that it is in the best interests of all stakeholders to progress a sale or partial sale of one or both of the Renewables or Aviation divisions to secure the long term potential of these businesses and deliver value for Esken shareholders.”
In a trading update, Esken, formerly Stobart Group, reported pre-tax losses of £8.6m for the period. That’s up from £6.4m for the same time last year.
Revenues for the period were up 12.5% to £58.1m while EBITDA was down 55.1% to £2.5m.
Esken also announced that it has concluded its debt financing which includes £50m of committed funds, and £40m uncommitted. Subject to shareholder approval, this will allow the company to clear its residual legacy liabilities.
David Shearer said: “Our Renewables business has proved resilient in what have been challenging conditions with unplanned biomass plant outages, reduced waste wood availability and rising costs.
“We expect biomass plant performance to improve in the Winter months, and Esken Renewables has secured new supply agreements and implemented annual contract indexation revisions.
“This is expected to lead to improved margins, and we have restated our guidance of £22m EBITDA for FY 2022.
“Our Aviation business has continued its recovery but at a slower pace than we would have wished due to continuing disruption throughout the industry with many airlines focussing on short term performance ahead of strategic positioning.
“The medium-term case for London Southend Airport remains compelling and our refreshed airport leadership team is well placed as the market returns to normality.”
