Stobart furloughs, cuts pay, scraps financial guidance

Stobart Group's London Southend Airport

Carlisle-based aviation, energy and civil engineering firm Stobart Group said on Monday it has utilised the UK Government’s job retention scheme to put 50% of its 1,500 employees on furlough as of April 1, 2020.

It said its board and senior leadership have agreed to 20% pay reductions and all other non-furloughed management have accepted 10% pay reductions.

“The board has determined it is not possible to provide financial guidance for the full year at present and is withdrawing all previously made guidance,” said Stobart Group.

The firm said it is also taking steps to explore further funding options.

“The group owns and operates two valuable growth businesses in London Southend Airport and Stobart Energy,” continued Stobart Group.

“The board and management team have moved swiftly and taken proactive steps to protect its liquidity and cashflow …

“The cumulative effect of these actions is to preserve the group’s liquidity and provide cash headroom.

“Given the level of current uncertainty, particularly regarding the potential duration of the crisis, the board is also taking prudent steps to explore further funding options.”

Stobart Group shares rose about 13% to around 52p, having fallen from around 80p in the last month.

On Stobart Aviation, the company said: “London Southend Airport’s airline partners have, for the most part, suspended operations, with airlines taking the opportunity to ground fleets at London Southend Airport.

“Over 20 aircraft are currently based on the airport’s stands.

“Wizz Air continues to operate a reduced service of three weekly flights to Bucharest.

“Loganair continue to operate flights to Aberdeen and Derry three times a week, and these Wizz Air and Loganair operations are served by a skeleton airport staff.

“The airport’s global logistics operation continues to operate as normal.

“The importance of maintaining the logistics network in the UK means that people working at that operation have been assigned Key Worker status.

“Strict safety protocols and procedures are in place throughout our operations in order to protect people working there.

“The Holiday Inn hotel at the airport remains open and is providing accommodation for Key Workers and we are seeking further opportunities to support community groups.”

On Stobart Energy, the firm said: “Stobart Energy is currently maintaining its operation with renewable energy plants continuing to require waste wood fuel in order to generate circa 2% of the UK’s electricity needs.

“The importance of supplying fuel to support these plants has meant drivers and associated employees have been assigned Key Worker status.

“The key risk to Stobart Energy’s ongoing operations is the availability of waste wood.

“The significant slowdown in construction alongside the closure of Local Authority-operated Household Waste & Recycling Centres has reduced the volume of new waste wood being made available.

“The low levels of available waste wood may impact on future gate fee pricing for an extended period.

“Stobart Energy is engaged with its renewable energy plant partners to discuss options to accept different specifications of waste wood fuel.

“As a precautionary step, Force Majeure or Pre Force Majeure notices have been issued to the majority of our major renewable energy plant partners.

“The division is further engaged with the UK Government to request the reopening of Household Waste & Recycling Centres and recommend that all available waste wood is prioritised for the use in renewable energy plants.”