Stobart shares soar 10 per cent after firm gives upbeat outlook despite losses
Stobart shares have soared by more than 10 per cent this morning following the release of its latest financial results showing promising growth at Southend Airport.
Stobart did however see a plunge in its pre-tax profit as it counted the cost of a long legal battle as well as a long list of expensive writedowns.
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The figures
Pre-tax profit plummeted 144 per cent to a loss of £58.2m in the 12 months to the end of February, down from a £23.9m loss the previous year, Stobart revealed.
It blamed a court battle with former director Andrew Tinkler for £5.2m of the loss, as well as other factors including a £4.8m loss in its rails and civils division after Stobart reassessed the value of contracts, and £10.2m spent in aviation and energy marketing costs.
Stobart also lost £15.5m from discontinued operations, including its disposal of Stobart Air.
The huge loss came despite year-on-year revenue growth of 39 per cent to £146.9m on the back of passenger numbers growing by a third to 1.5m.
Net debt also more than doubled to £83.1m, from £36.6m in the 2018 financial year.
Investors made a loss per share of 4.74p, compared to earnings per share of 34.33p last year, and a total basic loss per share of 16.64p.
Stobart also cut its total dividend in half to 9p per share from 18p last year.
Why it's interesting
Stobart, along with hedge fund Cyrus Capital, is part of the Virgin-led consortium Connect Airways, which bid for Flybe earlier this year. Shareholders accepted the sale, which valued Flybe at 1p per share.
The sale is currently in the hands of EU regulators who will decide in July whether to approve it.
Aside from the Flybe bidding war, Stobart has been in the headlines this year over its high-profile court-room wrangles with its former boss Andrew Tinkler.
In February, Stobart claimed victory against Tinkler after a judge found that he had acted in breach of his fiduciary duties during his campaign to oust the outgoing chairman Iain Ferguson, from his position. Stobart has since appointed David Shearer, a former executive board member of accountancy firm Deloitte, to succeed Ferguson and has said the boardroom battles are now behind it.
What Stobart said
Chief executive Warwick Brady told CityAM it had been a "transformative" year for the business. He said Southend Airport was on track to hit 2.5m passengers this year and had a "long-value path to growth".
He said Stobart's bid for Flybe through Connect Airways, a consortium led by Virgin, would allow the group to develop its regional connectivity, with the effects of its investment likely to benefit the company next year.
In a statement Brady said: “This has been a transformational year for Stobart Group. We have significantly strengthened the board and management team and taken the opportunity to deal with legacy issues while putting in place appropriate operational rigour within the business.
“As a result of the disposals and impairments in the year, the group has de-risked its balance sheet. Stobart Group has a clear focus on developing infrastructure assets in the aviation and energy sectors. These are high growth assets with strong market positions that are now well positioned to become increasingly cash generative
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“We will invest in accelerating the growth of our aviation and energy businesses through existing cash resources and further non-core asset sales. By doing this, we can deliver sustainable operating cash flows and significant long-term value for shareholders.”