TIDMSTOB
RNS Number : 5404U
Stobart Group Limited
30 July 2020
30 July 2020
STOBART GROUP LIMITED
('Stobart Group' or 'the Company')
AGM Statement
Stobart Group, the aviation and energy infrastructure group,
holds its Annual General Meeting today at 11.00am at the Company's
London office: 15 Stratford Place, London W1C 1BE. As a result of
social distancing requirements, shareholders will not be able to
attend in person but can attend electronically, details for which
are set out in the Notice of AGM documents.
At the meeting, David Shearer, Chairman, will make the following
statement:
"The global COVID-19 pandemic has had an unprecedented impact on
economies and businesses as a whole, and the aviation sector in
particular. In spite of the challenges which we have faced Stobart
Group has made good progress in the execution of the strategy which
was set out in the prospectus on 5(th) June.
As we focus on our two core sectors of Aviation, being Airports
and Aviation Services, and the Biomass Energy business, we have
committed to exit all non-core assets for value over the next three
years.
As a first step in this process, we have already completed a
transaction to dispose of our loss-making Rail and Civils business,
removing the ongoing risk to shareholders while at the same time
securing a future for 188 employees.
Stobart Group is trading in line with management expectations.
In our core divisions, London Southend Airport has reopened to
passenger flying and Stobart Energy has benefited from a restart in
construction work across the country leading to increased
availability of waste wood. Because of this, Stobart Energy is now
able to achieve required volumes of biomass fuel to its plant
partners. Having carefully stress tested the Group's liquidity
position under a variety of operating scenarios at the time of our
successful capital raise in June, the Board remains confident in
the Group's balance sheet, liquidity position and outlook.
London Southend Airport
London Southend Airport is a key strategic asset for the Group
and there is the opportunity to create further shareholder value in
the medium term due to three key factors: our ability to establish
an enhanced passenger experience for post-COVID-19 travel; the
ability to offer a cost efficient London base of operation to all
airlines; and the airport's location serving London, which
pre-COVID-19, was the largest travel market in the world.
We have taken steps to enhance the passenger experience by
putting in place best-in-class cleaning measures and by utilising
existing space and new technology. London Southend Airport has now
installed and is operating next generation security scanning
equipment that is part of our contact free plan for the airport. We
will continue to invest in line with the anticipated increase in
the passenger volumes.
Ryanair recommenced operations on 1 July and is now flying to
nine destinations, increasing to 14 in August, including routes to
new destinations such as Bucharest and Marseille. Wizz Air started
flying on 6 July and easyJet restarted its schedule with flights to
4 destinations on 20 July. The airport is currently servicing 35
flights per week, achieving good load factors.
easyJet has stated its intention to enter a consultation process
regarding a proposed plan to close three bases, including two
London airports; Southend and Stansted. We believe easyJet operated
a number of attractive, well-established routes from London
Southend and remain in dialogue with them. Whilst we await the
conclusion of their consultation period, we have also commenced
discussions with other airlines regarding their interest in some of
these routes.
Stobart Energy
At Stobart Energy we appointed a new management team at the
start of FY21 and over the past few months they have been
undertaking a full review of the operations to identify potential
improvements in the business model.
We are also taking steps to rebuild waste wood stock ahead of
the anticipated winter demand. This business remains profitable,
cash generative, with high barriers to entry and long-term
contracts. Our objective remains to monetise this business over the
next 18 to 24 months.
Stobart Air
The airline is operating limited flights from Dublin to Kerry,
and Donegal under Public Service arrangement, as well as Edinburgh
and Glasgow. Wider UK services remain suspended until 20 August
pending the Irish Government's decision on the 14-day quarantine
exemption.
In order to optimise the existing fleet and to minimise
financial exposure to the Stobart Group, Stobart Air has opened a
new base at Belfast City Airport and has put on sale routes to
Edinburgh, Glasgow, Manchester, Birmingham, East Midlands and Leeds
Bradford under its Aer Lingus franchise agreement. Despite this
positive progress, the operating environment remains challenging
and costs are being closely monitored with steps being taken to
conserve cash. Stobart Group's overriding objective is to mitigate
its financial exposure and we have commenced early discussions with
potential partners around the long-term future of this
business.
Stobart Group
I was pleased to welcome Clive Condie to the Board as
Non-Executive Director on 1 July 2020. His aviation experience
gained over more than 35 years working for the likes of British
Airways, Manchester Airport and Luton Airport further strengthens
the depth of expertise on the Group Board.
Stobart Group continues to maintain tight cost controls. The
Board and senior leadership team have taken extended pay reductions
until October, a recruitment freeze remains in place and all
discretionary spend continues to be deferred. S taff are
increasingly returning to work in locations where sufficient
operational recovery makes it viable.
Overall, despite the impacts of the COVID-19 pandemic, the Group
continues to own a valuable London airport with significant
medium-term growth opportunities and a strong cash generative
Energy business. It has available liquidity to maintain and develop
these assets following its successful capital raise and is focused
on building value for shareholders as we move into a post COVID
world.
Enquiries:
Stobart Group Limited C/o Newgate Communications
Charlie Geller, Group Communications Director
Newgate Communications +44 203 757 3406
+44 203 757 6884
Giles Croot stobart@newgatecomms.com
Ian Silvera
Isabelle Smurfit
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END
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