17th Mar 2020 10:16
(Alliance News) - Stobart Group Ltd said on Tuesday it is seeking additional liquidity due to uncertain market conditions and confirmed that it is in talks regarding sale of a minority stake in Southend airport.
Sky News on Monday reported that AviAlliance, a German company which operates airports in Athens, Budapest and Puerto Rico, has tabled a proposal to acquire a 25% stake in Southend airport.
https://news.sky.com/story/stobart-lands-700m-approach-for-slice-of-southend-airport-11958629
Stobart on Tuesday said it has been in discussions with "a potential strategic airport development partner that has indicated a headline value for London Southend Airport of between GBP700 million to GBP800 million". However, it added that no terms have been agreed and talks have been put on hold due to the coronavirus outbreak.
Separately, the infrastructure company said that the Covid-19 has hurt global airport passenger traffic, particularly at the Southend airport, with route cancellations likely to continue, resulting in the grounding of majority of airline fleets.
It said that it is reviewing steps to obtain funds to cover the duration of time affected by the outbreak in addition to taking steps to conserve cash and reduce costs.
In terms of current performance, the company said trading in its Aviation and Energy divisions in the year to the end of February was broadly in line with expectations. The Rail & Civils division traded below expectations during the period due to delays to the award of new contracts. Passenger numbers increased by 43% to 2.1 million from 1.5 million the year prior.
Stobart Energy delivered 1.6 million million tonnes of waste fuel from 1.3 million the previous year, representing a 19% increase.
Stobart also said that it is actively evaluating to address and manage the liabilities arising following the collapse of Flybe. Stobart held a 30% stake in Flybe.
Looking ahead, Chief Executive Warwick Brady said: "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."
"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," he added.
The stock was trading 0.7% lower at 38.25 pence each on Tuesday morning in London.
By Ife Taiwo; [email protected]
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