Stobart Group shares rise as logistics income holds up

Stobart Group's London Southend Airport

Shares of Carlisle-based aviation and energy infrastructure firm Stobart Group rose about 7% on Wednesday after it published results for the six months ended August 31, 2020, showing that its London Southend Airport benefited from uninterrupted income at its global logistics operation.

Stobart Group owns and operates Southend Airport and Carlisle Lake District Airport and the firm continues to plan a medium-term move to being a “pure play airport and aviation services business.”

Stobart said revenue fell 28.9% to £53.2 million “primarily driven by COVID-19 lockdown restrictions affecting the two operating divisions, Aviation and Energy.”

The group made a loss before tax of £77.4 million for the six months, compared to a £15.5 million loss for the same period of the prior year.

Aviation revenue fell 48.9% to £13.5 million with passenger numbers through London Southend Airport falling 89.5% to 124,499 period-on-period.

Energy revenue fell 22.5% to £33.2 million with biomass tonnages supplied falling 13.9% to 616,290 period-on-period.

Stobart Group CEO Warwick Brady said: “COVID-19 has created unprecedented challenges for the group.

“In response, we have taken decisive action to bolster liquidity, reduce cash burn and protect our long-term strategic objectives.

“These actions should allow us to emerge from this crisis in the best possible position to deliver our focused strategy.

“Whilst passenger travel has been severely disrupted by lockdowns and evolving quarantine arrangements, London Southend Airport has benefited from uninterrupted income from its global logistics operation.

“At Stobart Energy, we are seeing a more consistent demand profile and have taken appropriate actions to ensure certainty of supply of waste wood for customers over the winter period to fulfil our valuable long-term supply contracts.

“We remain focused on realising value for shareholders from Stobart Energy as a maturing, cash generative and stable business over the next 18 months and are considering all options to achieve this.

“Looking forward, the group has immediate access to liquidity, with £119.1m in cash and undrawn banking facilities.

“Our focus remains on what we can control, namely managing our operations well, optimising both cost and cash management and rationalising the portfolio to maximise value.

“We continue to believe our future strategy and the medium-term move to a pure play airport and aviation services business will deliver superior shareholder returns.”

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