Stobart Group looking to sell ‘non-core assets’

Carlisle-based aviation and energy infrastructure firm Stobart Group said on Thursday it continues “to evaluate opportunities to dispose of remaining non-core assets” and reported that its London Southend Airport “continues to benefit from strong uninterrupted income through its global logistics operations.”

The company also said it is “reviewing the strategic options to realise value from Stobart Energy.”

Stobart Group shares rose about 2% on Thursday, but the firm’s stock has fallen more than 80% in the last 12 months.

In a trading update, Stobart Group said: “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 passenger 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.”

On its Stobart Energy division, the company said all its plants are operational and able to receive contracted volumes.

“This is leading to a more consistent demand profile resulting in predictable cash generation,” said Stobart.

“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. “

On Stobart Air, the company said: “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.”

Stobart Group CEO Warwick Brady 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.”

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.