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Stobart Group Ltd: DEEP DIVE
OVERVIEW

Stobart looks ahead with confidence as it invests in Southend Airport expansion

“The company continues to make strong commercial progress in its core aviation and energy operating divisions and is trading in line with management expectations," Stobart said.
Stobart
OVERVIEW: STOB The Big Picture
Stobart plans to build new infrastructure at Southend Airport to accommodate more passengers
  • Stobart ramps up investment at Southend Airport

  • Energy division supplies 45% more biomass to UK power stations in 2018

  • Rail and civils division generating improved results under new strategy

  • Trading in line with expectation

 

What Stobart does:

Stobart Group Ltd (LON:STOB) is a FTSE 250-listed infrastructure and support services firm with interests in aviation, energy and rail.

Within the aviation arm, the company owns London’s Southend Airport.

Stobart has been ramping up investment at the airport after selling its regional airline and aircraft leasing businesses to Connect Airways – the joint venture it set up with Virgin Atlantic and Cyrus Capital.

The company sold the businesses in exchange for becoming a 30% shareholder in the venture. Cyrus is the lead partner in the venture with a 40% stake while Virgin owns a 30% interest.

Stobart’s energy services division delivers waste wood and other waste derived fuels to biomass plants in the UK.

The rail and civils unit provides specialist rail, civil and infrastructure engineering and management services to customers such as Network Rail. 

Inflection points:

  • Stobart plans to invest in new infrastructure at Southend to enable the airport to handle several times the number of passengers it welcomed in 2018 when 1.5mln people walked through its departure lounge.
  • To fund its investment, the company use some of the money from the sale of its airline and aircraft leasing business. It will also trim its annual dividend to 6p from the 15p it paid for the year to February.
  • Stobart supplied 1.3mln tonnes of biomass to UK power stations last year – some 45% more than it supplied the previous year.  All but three of the power stations have now been commissioned and are in full contractual operations.
  • Following a review of the rail and civils division, Stobart has strengthened the management team and tasked it with winning more contracts with tier-one customers. This group said this strategy is “generating improved results” in terms of new business.

Blue Sky:

In a pre-close trading update in March, Stobart said: “The company continues to make strong commercial progress in its core aviation and energy operating divisions and is trading in line with management expectations.”

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