Stobart Group Limited Trading Update (4200G)
March 17 2020 - 3:11AM
UK Regulatory
TIDMSTOB
RNS Number : 4200G
Stobart Group Limited
17 March 2020
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
17 March 2020
STOBART GROUP LIMITED
("Stobart Group" or the "Company")
Trading Update
Stobart Group today provides the following update on trading for
the year to 29 February 2020 of the Company and its subsidiaries
(the "Group").
Trading summary
-- The Group's core Aviation and Energy divisions' full-year
performance for the financial year ended 29 February 2020 was
broadly in line with management expectations;
-- The non-core Rail & Civils division traded below
expectations following delays to the award of new contracts through
Network Rail's Control Period 6 and one legacy contract still
ongoing;
-- Looking forward, the demand for waste fuel to be supplied to
renewable energy plants is expected to continue and the division
has contingency plans in place for its workforce should the
COVID-19 virus continue to spread across the UK;
-- However, the short-term uncertainty driven by the COVID-19
outbreak has impacted on global airport passenger traffic
generally, and London Southend Airport specifically. The airport's
airline partners have cautioned that they are undertaking
significant route cancellations. These actions are likely to
continue on a rolling basis for the foreseeable future and could
result in the grounding of the majority of airline fleets;
-- There is currently no certainty regarding the extent or
length of the virus' impact and it is therefore not possible to
provide meaningful guidance on forecast passenger numbers for FY
2021 at this time;
-- Given the current market conditions, additional liquidity is
likely to be required and the Group is actively reviewing the most
appropriate sources of funds to cover the period during which the
airport is affected by the COVID-19 virus. In addition, the Group
has moved swiftly to take measures to conserve cash and reduce its
cost base in order to provide further resilience through this
period;
-- A number of guarantees and potential lease obligations exist
between the Group and the separate subsidiaries of Connect Airways,
being Stobart Air and Propius, which have been impacted by the
collapse of Flybe. Stobart Group is actively evaluating how best to
address and manage these liabilities and is in discussion with
stakeholders regarding the most appropriate solutions; and
-- The Group will update the market once there is further
clarity around both the Connect Airways and COVID-19
situations.
Core operating business update
Stobart Aviation
London Southend Airport made considerable progress toward its
strategic ambitions during FY 2020. Passenger numbers increased 43%
to 2.1m in FY 2020 (FY19 1.5m ) with London Southend Airport
starting operations with Ryanair, Wizz Air and Loganair . In
October 2019, c ommercial operations also commenced with the
Company's global logistics customer, providing the opportunity to
further diversify income streams.
Stobart Energy
29 out of the 30 renewable energy plants in the UK and Ireland
that Stobart Energy is contracted to supply have completed the
commissioning phase. With the renewable energy plants now operating
more consistently as a result of completing commissioning, Stobart
Energy was able to deliver 1.6m million tonnes of waste fuel in FY
2020, representing an increase of over 19% on the previous year
(FY19 1.3m).
Warwick Brady, Chief Executive, Stobart Group said,
"Despite the current challenges presented by the COVID-19 virus,
we continue to own and operate aviation and energy assets with
significant underlying value. It is impossible to say what
structural changes will occur to the aviation industry in the
coming months. However, ultimately the current crisis will pass,
and people will continue to want to fly in and out of one of the
world's largest travel markets. Similarly, Stobart Energy is well
placed to generate higher margins going forward. The capital
expenditure programme has been completed, we have a robust supply
chain in place, long term valuable contracts, and our renewable
energy plant customers are operating more consistently. We
therefore continue to believe there are significant medium and
long-term opportunities to further increase the value of our
assets."
The person responsible for arranging the release of this
announcement on behalf of Stobart Group is Louise Brace, Company
Secretary.
Enquiries:
Stobart Group Limited C/o Newgate Communications
Charlie Geller, Communications Director
Newgate Communications +44 203 757 3406
+44 203 757 6884
Giles Croot stobart@newgatecomms.com
Ian Silvera
Megan Kovach
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END
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