Stobart on course to fulfil expectations

INFRASRUCTURE and support services company Stobart Group looks set to report results in line with management expectations, with infrastructure performing ahead of predictions.

In a pre-lose trading statement prior to the announcement of its results for the year ended February 29, the company said its infrastructure division has produced a strong performance with strategic management of sites improving valuations of investment properties.

In December 2015, Stobart bought a property which it had held under a long lease at Speke in Liverpool. This had given the Group the opportunity to enhance its value and it expects to improve the value further during the next financial year.

The company is the UK’s leading supplier of waste wood biomass fuel with a target to supply more than two million tonnes of biomass fuel annually by 2017/18.

It says it is focusing on the fuel supply chain ahead of new biomass plants expected to be commissioned through 2017.

Stobart Aviation, comprising London Southend Airport, Carlisle Lake District Airport, is also performing to pay. Although its target was to hit 2.5 million passengers by 2018 at Southend, passenger numbers were lower than the prior year and talks are ongoing with major operators over sustainable new routes.

The investment division, including Eddie Stobart Logistics and Propius. Eddie Stobart Logistics, in which the group has a 49% interest, is continuing to grow 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.

Chief executive Andrew Tinkler 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 focused 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.” 

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