25 September 2019
STOBART GROUP LIMITED
('Stobart Group' or 'the Group')
Stobart Group, the aviation, energy and civil engineering group, has issued the following trading update prior to the publication of its interim results for the six months to 31 August 2019.
The Group is trading in line with market expectations and continues to make strong commercial progress in its two core divisions: Aviation and Energy.
Passenger numbers at London Southend Airport have increased by 42% in the six months to 31 August 2019, compared to the same period last year. This substantial growth was driven by the start of Ryanair flights in April, Loganair flights in May and the continued successful growth of easyJet. Access was further improved by the introduction of early and late rail services between London Liverpool Street and Southend Airport.
From October 2019, WizzAir will start flying from London Southend Airport, to three new destinations. These new routes will help support the continued growth in passenger numbers at London Southend Airport in line with the Group's target of reaching 5 million passengers per annum by February 2023. Given the ongoing uncertainty in the sector, in part caused by Brexit, the Group is taking a cautious approach to passenger forecasts in the short term, with the Board working on the basis of circa 2.3 million passengers for the year ending 29 February 2020. This would represent an increase of 53% versus the previous year.
During the period, the volume of waste managed, which is predominantly processed into waste wood fuel, increased by 148k tonnes to 806k tonnes. This is equivalent to a run rate of 1.7m tonnes per annum - representing a 22% increase on the same period last year. The continued improvement in performance is a result of all the energy recovery plants (except one) that Stobart Energy supplies under long term contracts, having reached full contractual operational volumes
Other assets and investments
In July 2019, Connect Airways (in which Stobart Group holds a 30% interest) received merger control clearance from the European Commission for its acquisition of Flybe. With Connect Airways taking over full management control of Flybe, the leadership teams are now focused on plans to grow its regional network, while Stobart Air continues to expand its successful franchise business.
Along with the industry as a whole, Stobart Rail & Civils has been affected by delays to tendering for works associated to Control Period 6 which commenced 1 April 2019, and the ongoing reorganisation at Network Rail has further impacted the pace of new contract awards compared to what we had envisaged in the prior period. However, we are encouraged by the overall improvement in operational performance following the appointment of a new management team last year. The division has been reoriented to focus on securing profitable new external contracts and is well placed to secure further opportunities once Control Period 6 gathers momentum.
Warwick Brady, CEO of Stobart Group said, "Stobart Group has made considerable progress in the period, particularly in terms of the number of passengers that we have welcomed at London Southend Airport and the volume of waste fuel that we have been in a position to supply under contract. I am particularly encouraged by the quality of airline partners that we are now working with and the opportunity that brings to deliver future sustainable operating profits."
The Group's interim results for the six months to 31 August 2019 are scheduled to be released on 14 November 2019.
Stobart Group Limited C/o Newgate Communications
Charlie Geller, Head of Group Communications
Newgate Communications +44 203 757 6880
Giles Croot [email protected]