Shares of Carlisle-based energy, airports and civil engineering firm Stobart Group fell about 5% on Thursday after it suspended its dividend to conserve cash and reported a bigger first-half loss amid impairment charges.

The group’s first-half loss widened to £20.9 million from £17.5 million a year earlier.

Unveiling results for the six months ended August 31, 2019, Stobart Group said group revenue increased 34.1% to £93.1 million, driven in particular by a strong performance from Stobart Energy, a biomass and waste specialist.

Stobart Group — still recovering from recent boardroom battles — said revenue at its energy business grew 43.5% to £42.9 million.

Its aviation revenue rose 26.2% to £26.4 million with London Southend Airport (LSA) passenger numbers increasing 41.8% to 1,189,178 year-on-year.

On the dividend suspension, Stobart Group said: “In recent years, Stobart’s dividend has been largely funded from the sale of assets rather than operational cash generation.

“The board believes that this practice is unsustainable and no longer in the interest of shareholders.

“Whilst the group continues to hold a significant portfolio of non-strategic infrastructure assets, the board, will continue to sell assets in such a way that optimises the value to the group.  

“As a result, and in order to maximise this opportunity and shareholder value over the medium term, the board has taken the decision to suspend the dividend, conserving £11m of cash in the current period and £22m per annum that can now be invested in these growth opportunities within the group.

“The group has also commenced a process to obtain new long-term debt to fund its growth programme and will provide a further update as soon as it is in a position to do so.”

Stobart Group CEO Warwick Brady said: “In London Southend Airport and Stobart Energy, the group has two businesses with immediate and considerable growth opportunities.

“London Southend Airport continues to attract new airlines and is on course to deliver our target of 5 million annual passengers at £8 EBITDA by February 2023.

“At the same time, Stobart Energy is now set to become increasingly cash generative. 

“Both of these exciting growth businesses require further investment in order to deliver their full potential.

“The board has undertaken an extensive review of the capital required to fund this growth and taken the decision to suspend the dividend in order to maximise the capital available for the further development of these growth businesses. 

“We are confident that, with the planned strategic investment, we will deliver superior future returns.”