29th Aug 2014 10:08
LONDON (Alliance News) - Stobart Group Ltd said Friday that it is confident that it will achieve strong returns over the medium-term after recording increased biomass tonnage and higher passenger numbers year-on-year.
In a pre-close trading statement released ahead of its half-year results for the six months to August 31, the infrastructure and support services company said that it has seen encouraging growth in its energy and aviation divisions' key performance indicators, recording higher biomass tonnages supplied and passenger numbers on the previous year.
"Whilst the rate of development against our plans in these growing businesses is hard to predict accurately in the short term, the Board is satisfied with the performance achieved to date and is confident of delivering strong returns over the medium term," said CEO Andrew Tinkler.
In its energy division Stobart Group said tonnages supplied were up more than 50% year-on-year to July 31. However, profit per tonne overall is lower as margins have been affected by a higher proportion of exported products in readiness for UK plants coming on stream, and transport profits are reduced year-on-year following the ending of a contract on February 28, said the company. Looking ahead Stobart said it expects cost management processes undertaken in the first-half to benefit the second-half.
In its aviation business, passenger numbers were up 20% on the comparative for the period to July 31, with passenger-related revenue per passenger also higher, up 10%.
Stobart's rail division saw revenue from external customers rise by around 40% in the six months to July 31, said the company, after securing "a promising level of work at respectable margins," through collaborations with contractors to Network Rail. The company said this has partially offset the lower levels of internal development work in its first-half, though expects that internal work will pick up in the second-half, "There is also strong interest for rail engineering work in the next six months."
In its investments division the transport and distribution business including Eddie Stobart, of which the group owns 49%, performed in line with management's expectations, "although our recorded share of profit will be subject to transaction accounting fair value adjustments," said Stobart in a statement.
In June the company said it remained confident in delivering growth and good shareholder returns over the coming years, as it continues its strategy of investment, optimisation and realisation.
Stobart Group said it expects to announce its half-year results on October 23, 2014.
Shares in Stobart Group were trading 4.86% higher at 124.00 pence per share Thursday morning.
By Alice Attwood; [email protected]; @AliceAtAlliance
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