TIDMSTOB
RNS Number : 1070H
Stobart Group Limited
08 March 2018
8 March 2018
STOBART GROUP LIMITED
('Stobart Group' or 'the Group')
Pre-Close Trading Statement and Confirmation of Quarterly
Dividend
Stobart Group, the infrastructure and support services business,
issues the following pre-close trading statement prior to the
announcement of the full year results for the 12 months to 28
February 2018, which is expected to be made on 10 May 2018.
Stobart Group is an entrepreneurial business that delivers
strong returns to shareholders. Its strategy is to use disposals
from its Infrastructure and Investment divisions to support the
dividend to 2022, at which point the dividend will be supported
through income from its growing operating divisions; Aviation,
Energy and Rail.
Highlights
-- Aviation - 25% increase in passengers at London Southend
Airport. Stobart Group continues to invest in its strategy of
identifying opportunities to tackle London capacity constraints and
improve passenger experience
-- Energy - Volume targets should be achieved during 2018.
Majority of new third party power plants are either burning fuel or
about to commence burn. The division is trading ahead of its EBITDA
per tonne targets
-- Rail - On track to deliver EBITDA targets on rail and civil
engineering projects. Supporting growth at Carlisle Lake District
and London Southend Airports
-- Infrastructure/Investments - Continuing to realise cash in
order to support the dividend through to 2022
-- Quarterly dividend maintained at 4.5p per share
Aviation
Stobart Group invests in, develops and operates a number of
aviation-related businesses focused on meeting the growing demand
for increased airport capacity and improved customer experience. It
owns and operates London Southend and Carlisle Lake District
Airports, Stobart Air and Stobart Aviation Services.
London Southend Airport
London Southend Airport welcomed more than 1 million passengers
in calendar year 2017, representing a 25% increase on 2016.
Passenger numbers are expected to grow further with the recent
agreement for Air Malta to launch three new routes from London
Southend Airport from 4 May, flying to Malta, Sardinia and
Sicily.
In January 2018 we launched a new executive jet fixed based
operation (FBO) at London Southend Airport, expected to cater for
5,000 flights per year by 2022.
The group intends to invest up to GBP40m over FY18 to FY21 in
awareness, route development, branding, marketing and airline
incentive deals at London Southend Airport, of which we have
invested around GBP10m in FY18.
Carlisle Lake District Airport
Carlisle Lake District Airport will open for passengers for the
first time in Summer 2018.
Stobart Air
Stobart Air continued to make good progress, operating flights
on behalf of its partners, Aer Lingus and FlyBe, carrying 1.7
million passengers. Stobart Air appointed industry veteran Conor
McCarthy as Non-Executive Chairman of its board in January 2018. In
February its contract to operate the Dublin-Donegal and
Dublin-Kerry Public Service Obligation (PSO) routes, under the Aer
Lingus Regional brand, was renewed.
Stobart Aviation Services
Stobart Aviation Services provided check in services for 0.6
million passengers at London Southend Airport and ground handling
services to 11,949 aeroplane movements. It also secured a contract
to provide aviation services to easyJet at London Stansted which
began on 1 March 2018, worth circa GBP4m per annum.
Energy
The Company has successfully deployed its logistics experience
to put in place a renewable energy fuel supply chain to supply 2m
tonnes of renewable energy fuel to power stations across the UK.
Certain of these power stations experienced commissioning delays.
However, more stations are now coming on-line and Stobart Energy
has successfully proven its business model.
Stobart Energy is now delivering at a run rate of c1.3m tonnes
p.a. of renewable energy fuel in January and February 2018, and has
customer contracts for a further 0.8m tonnes p.a. once plants
become operational. Stobart Energy has closely managed its costs
and EBITDA margin per tonne is ahead of target, with a defined plan
for delivering targets for 2022 now in place.
Rail and Civil Engineering
The Rail division continues to develop its pipeline of third
party civil works, and, by applying its civil engineering
expertise, adding value to the wider Group. Stobart Rail is
constructing the terminal at Carlisle Lake District Airport, which
is due to be completed in June 2018, and worked to upgrade the car
park and stands at London Southend Airport.
Stobart Rail also continued to develop its relationship with
Network Rail, winning various devegetation contacts totaling GBP6m,
winning framework contracts in London Northwest, London Northeast
and Scotland and appointed participant in the Transpennine route
upgrade. There was minimal financial exposure from contracts with
Carillion.
Infrastructure and Investments
Stobart Group aims to use disposals from its Infrastructure and
Investment divisions to support the dividend. During the period,
the Infrastructure division completed four disposals including the
Park Royal, London Southend Airport Hotel and Rotherham properties,
as well as the Group's investment in the Port Talbot biomass plant.
These disposals realised a total of GBP27.3m in cash, of which
GBP2.3m remains outstanding at the year end. The Group's investment
in Eddie Stobart continued to perform satisfactorily, with that
company reporting a 12% YoY increase in revenues.
Dividend
We reported in the AGM statement in June an expectation to pay
an increased quarterly dividend of 4.5p per share, starting with
the payment made on 7 July 2017. Dividends of 4.5p per share were
paid on 6 October 2017 and 19 January 2018. The Board has now
declared a further interim dividend of 4.5p per share which will be
paid on 13 April 2018 to shareholders on the register as at 23
March 2018.
The Board remains confident of the Group's performance and
prospects and, subject to Board approval, a further quarterly
dividend of 4.5p per share will be made on 6 July 2018. The Group
has non-operating asset resources available to support the dividend
until 2022, and thereafter dividends are expected to be funded out
of operating cash flow.
Warwick Brady, Chief Executive of Stobart Group, said: "Stobart
Group has made good progress during the last year. We continue to
see growth in our aviation division, with a 25% increase in
passengers at London Southend Airport, 10% increase in passenger
numbers flying via Stobart Air, and we are excited to be welcoming
passengers at Carlisle Lake District Airport from Summer of this
year.
"Stobart Energy has proven its model and is on track to deliver
at a run rate of 2m tonnes of renewable energy fuel per year by the
end of 2018 and Stobart Rail continues to add value across the
Group. We continue to realise value from our infrastructure and
investment divisions and these disposals are expected to support
the dividend up until 2022, when we expect our operating divisions
to meet their targets for EBITDA contribution."
Enquiries:
Stobart Group Limited C/o Redleaf Communications
Warwick Brady, CEO
Redleaf Communications +44 207 382 4730
Charlie Geller Stobart@redleafpr.com
Ian Silvera
This information is provided by RNS
The company news service from the London Stock Exchange
END
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