23rd Oct 2014 08:43
LONDON (Alliance News) - Stobart Group Ltd Thursday said it swung to a pretax loss in the first half of its financial year due to charges related to the early repayment of loans, but its underlying pretax profit more than doubled as interest charges fell by 80%, and it reported higher revenue in the two key businesses it wants to grow.
The company is going through a major transition after selling a controlling interest in its fomer transport and distribution division, known from its Eddie Stobart lorries. It now has five businesses: supply and transport of biomass for the energy market, airport operations, rail engineering, infrastructure, and its investments unit including its remaining stake in Eddie Stobart. Its focus is on driving volume growth in its energy unit and passenger growth in the aviation division.
The company said revenue rose to GBP56.2 million in the six months to end-August, from GBP48.1 million a year earlier, due to volume increases in both energy and aviation. Its aviation division operates London Southend Airport, Carlisle Lake District Airport and Stobart Air.
However, profit was hit by finance items. It swung to a pretax loss of GBP8.6 million, from a profit of GBP1.2 million, due mainly to GBP8.1 million of finance charges related to the repayment of a GBP100 million variable rate loan with M&G Investment Management Ltd and repayment of a substantial proportion of a property loan with GE Real Estate Finance Ltd.
Its underlying pretax profit rose to GBP4.4 million, from GBP2.1 million, thanks to an 80% reduction in interest charges, while underlying earnings before interest, tax, depreciation and amortisation fell 20% to GBP8.7 million due to lower investment property realisations and revaluations.
Revenue rose to GBP32.7 million in its energy business, from GBP26.1 million in fiscal 2013, as the tonnes sold rose to 482,000, from 308,000. Revenue in the aviation unit rose to GBP12.3 million, from GBP10.4 million, as passenger numbers rose to 628,000, from 528,000.
It declared an unchanged interim dividend of 2.0 pence.
"We have a clear focus on the growth of our Energy and Aviation businesses. The increased volumes we are reporting, along with strengthening pipelines in both divisions, reinforce our confidence in the group's prospects," Chief Executive Andrew Tinkler said.
Stobart Group shares were up 1.0% at 100.00 pence Thursday morning.
By Steve McGrath; [email protected]; @stevemcgrath1
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