Stobart Group Limited Trading Update (6846A)
01 Ottobre 2020 - 8:00AM
UK Regulatory
TIDMSTOB
RNS Number : 6846A
Stobart Group Limited
01 October 2020
1 October 2020
STOBART GROUP LIMITED
('Stobart Group' or 'the Group')
Trading Update
Stobart Group, t he aviation and energy infrastructure group,
issues the following trading update prior to the publication of its
interim results for the six months to 31 August 2020 on 4 November
2020.
Balance Sheet and Liquidity
The Group's core operations at London Southend Airport and
Stobart Energy are operating within the scenarios set out at the
time of the successful GBP100m capital raise in June. The Group
continues to operate with strict financial discipline to minimise
the operating cash burn and is deferring all discretionary capital
expenditure until required to meet operational demand. As a result
of these actions, Stobart Group's overall cash flows are trading
within the range of management expectations and the Group had
GBP119m of cash and undrawn bank facilities available at 31 August
2020.
Trading
In spite of the challenging backdrop for the aviation industry,
London Southend Airport continues to benefit from strong
uninterrupted income through its global logistics operations and
recommenced passenger flights from June 2020. While p assenger
activity has been modest in the initial months since reopening,
London Southend Airport remains well positioned to benefit from the
expected recovery in the short-haul leisure travel market as and
when restrictions ease. In addition, there is scope for further
development of our logistics operations given the growth in online
demand.
The immediate priorities for the airport are to continue
managing costs to reflect current demand and maintaining
flexibility to respond quickly to any change in activity levels.
Looking ahead, the airport remains confident in its relationships
with its existing carriers and is in positive discussions in
relation to the post winter schedule which starts in April 2021. It
is also actively engaging with a range of other low-cost carrier
airlines regarding their interest in established proven routes that
can be operated from next year at a low cost of operation.
Stobart Energy is now an established business with all plants
operational and able to receive contracted volumes. This is leading
to a more consistent demand profile resulting in predictable cash
generation. However, the disruption to the construction industry
and the closure of recycling facilities during the initial COVID
period resulted in a reduction in available waste wood, requiring
the utilisation of existing stockpiles. In order to protect cash
generation and earnings for the long-term, the business has taken
the strategic decision to ensure certainty of supply for our
customers over the winter period and beyond by building stock
levels of waste wood. This action has put some short-term pressure
on gate fee income, but this is expected to recover to pre COVID
levels in the first half of 2021.
Stobart Air is operating below the scenarios set out at the time
of the capital raise due to the continued quarantine arrangements
in Ireland, with limited flights operating. As with other divisions
in the Group, Stobart Air is carefully managing its cost base and
is working with its various stakeholders to minimise cash burn
while maintaining its ability to respond to changes in
restrictions. The Group is engaging actively with a number of
parties interested in acquiring its stake and with Aer Lingus to
enter into a new commercial arrangement beyond December 2022 as
part of this process.
Guidance
Further to our previous announcements, the COVID-19 situation is
likely to remain uncertain for some time and all guidance
consequently remains suspended.
Warwick Brady, Chief Executive, Stobart Group said,
"The Group is executing the strategy it set out at the time of
the capital raise and is employing strict financial discipline to
safeguard both the operational capability and the value of its core
assets to ensure it will be positioned to respond to a recovery in
demand.
We are delivering a cost-effective passenger-focused experience
at London Southend Airport; we are reviewing the strategic options
to realise value from Stobart Energy; we have exited the Rail &
Civils business ahead of plan; and we continue to evaluate
opportunities to dispose of remaining non-core assets."
Enquiries:
Stobart Group Limited C/o Tulchan
Charlie Geller, Communications Director
Tulchan
Olivia Peters T: +44 (0)20 7353 4200 E:
opeters@tulchangoup.com
David Allchurch T: +44 (0)20 7353 4200 E:DAllchurch@tulchangroup.com
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