7th Mar 2016 08:55
LONDON (Alliance News) - Stobart Group Ltd on Monday said it expects to deliver underlying full-year results that will be ahead of the previous year and in line with internal expectations, with its infrastructure division expected to exceed management's expectations.
The company unveiled the good news ahead of the publication of its results for the year ended February 29, which will be released on May 12.
The infrastructure and support services company said the infrastructure division has delivered a "strong performance" in 2015, lifting the valuations of its investment properties.
Stobart purchased an investment property which it had held under a long lease at Speke in Liverpool back in December, giving the group the opportunity to enhance its value. The company expects to improve the value further during the coming financial year.
The aviation division, which homes Stobart's operations at London Southend Airport, Carlisle Lake District Airport and the investment in Stobart Air, has experienced a fall in passenger numbers in the last financial year, which was expected due to a change in a long-term contract with easyJet PLC.
Stobart said the new contract with easyJet was aimed at improving the load factor, which is how full the flights are, with the aim of growing passenger numbers "in the near future".
Stobart Air, formerly known as Aer Arann, is an Irish regional airline serving destinations within Ireland and in the UK and France. The airline operates Aer Lingus Regional services under a franchise agreement with Aer Lingus.
Stobart said London Southend Airport aims to carry 2.5 million passengers a year by 2018.
"We are in talks with a number of major operators regarding sustainable new routes to achieve our growth plans by 2018," said the company.
The rail division has continued to increase external revenues with another year of growth whilst maintaining margins and has a strong order book for the year ahead from long-term rail infrastructure projects for Network Rail.
The energy unit, which supplies waste biomass wood fuel, is aiming to supply over 2.0 million tonnes of fuel each year by 2017 to 2018, and the company is currently focussing on the fuel supply chain ahead of new biomass plants expected to be commissioned through 2017, it said.
"We have a stable platform for growth in our Energy and Aviation divisions, complemented by profitable realisations from our infrastructure portfolio," said Chief Executive Andrew Tinkler.
"The board is focussed on fulfilling the long-term biomass fuel supply agreements that are already in place in the Energy Division and on attracting new operators and passengers through our award-winning London Southend Airport over the next two years. Achieving these targets will create significant value for shareholders," he added.
Eddie Stobart Logistics, in which the company holds a 49% stake, has continued to grow in the year. Stobart said the unit has reduced debt from cash generated from operations and from the profitable disposal of the UK automotive business. That has increased the value of Stobart's equity investment in the company.
Propius Holdings Inc, in which it has a 33% stake, sold two older aircraft in November and returned a cash distribution to Stobart of GBP4.3 million.
"We have realised net cash of over GBP24.0 million from asset disposals in the year. Cash generation from these assets will assist the group in the payment of dividends whilst the growth divisions mature. The board will consider further distributions of surplus cash generated on future asset realisations," said Tinkler.
Stobart shares were up 4.8% to 105.56 pence per share on Monday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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