Results for the 6 months ended 31 August 2019
Warwick BradyChief Executive Officer
“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.”
- Passenger numbers at London Southend Airport increased by 41.8% to 1.2 million, with circa 2.3 million passengers expected for the year to February 2020.
- Flybe/Virgin Connect announced yesterday that it is to open a new base at London Southend that will involve two based aircraft and a total of five aircraft serving 10 destinations. These destinations are expected to attract circa 500,000 passengers annually.
- Underlying EBITDA per passenger increased by 3.0% to £3.55 (2018: £3.44). The commencement of operations with a global logistics customer in October 2019 will make a significant contribution to underlying EBITDA per passenger in the next financial year.
- Stobart Group will continue to invest in London Southend Airport to deliver its target of welcoming 5 million passengers per annum at £8 EBITDA per passenger in the year to February 2023.
- Volume of waste managed increased by 22.5% to 805,663 tonnes.
Underlying EBITDA increased 35.4% to £11.7m (2018: £8.7m), reflecting the growing maturity of the business. Stobart Energy is now set to become increasingly cash generative.
- The Group will continue to invest in the business to maintain its supply chain and infrastructure. The Group also intends to explore commercial partnerships, collaborations and joint ventures across the waste management and ‘Energy from Waste’ sector.
- Group revenue increased by 34.1% to £93.1m, driven, in particular, by a strong performance in Stobart Energy.
- Underlying EBITDA increased by 187.1% to £12.1m and loss for the period increased by £3.4m to £20.9m.
- Loss for the period includes an £8.5m non-cash impairment of intangible assets in Stobart Rail & Civils, £3.7m non-cash brand amortisation and £7.4m of new business and new contract set-up costs.
- Stobart Group has evaluated the significant growth potential within its aviation and energy businesses, and its available sources of investment funding.
- The Board continues to hold an £80m portfolio of non-strategic infrastructure assets. However, the Board intends to dispose of these assets at the right time and in such a way that optimises the value to the Group.
- The Board’s intention is to restore the dividend at the point at which the Group becomes significantly cash generative at an operating level, subject to investment requirements to maximise shareholder returns.
|Divisional Revenue Summary||31 August 2019|
|31 August 2018
|Loss for the period||(23.5)||(9.1)|
|Rail & Civils||29.4||22.6|
|Central costs and eliminations||(9.0)||(7.1)|
|Divisional Continuing Profit Summary||31 August 2019|
|31 August 2018
|Underlying EBITDA from two main operating divisions1||15.8||11.6|
|Rails & Civils||(1.0)||(4.8)|
|Central costs and eliminations||(3.5)||(4.3)|
|Gain on swaps||0.1||2.6|
|Impairment of loan notes||-||(2.5)|
|Finance costs (net)||(4.5)||(1.4)|
1 Defined in glossary in note 15