21st May 2014 11:18
LONDON (Alliance News) -Transportation and distribution company Stobart Group Ltd Wednesday said it swung to a loss in its last financial year, hit by big impairment charges, after selling off a majority of its iconic transport and distribution business to an investment fund.
The group left its full-year dividend unchanged at 6.0 pence, however.
"Dividends are expected to be maintained at the current level in the foreseeable future and, in the short term, partly funded out of proceeds from disposals of property assets," the company said in a statement.
The group recorded recorded a pretax loss of GBP10.2 million in the year ended February 28, compared with a GBP3.0 million profit a year earlier, after booking a GBP13.0 million charge for impairment of assets and significantly higher restructuring costs in the period, having sold off a majority of its transport and distribution business to an investment fund.
Revenues for the year were GBP99.2 million, up from GBP76.8 million the prior year.
In March, Stobart said it was selling the majority of its iconic trucking business to investment firm DBAY in a cash and shares deal, using the proceeds to pay off debt, return some cash to shareholders, and fund an expansion of the remaining air, rail and green energy infrastructure and support services businesses. Under the deal, Stobart still holds a 49% stake in the trucking business.
The group said it disposed of the controlling interest in the business for a gross amount of GBP239.7 million.
"This transaction and the resulting changed shape of our group, with its revised structure, will allow the senior team to focus their skills and energies on accelerating growth in our Energy and Aviation businesses," Stobart said in its statement.
In particular, Stobart Group now wants to grow the energy business by investing in existing and new biomass-fueled plants. It will also focus on driving passenger growth at its Southend and Carlisle airports, while its rail business will focus on third-party contracts and supporting the green energy business.
Stobart said its new partnership with Flybe Group PLC will see its joint-venture airline, Stobart Air, using two branded Flybe aircraft to launch six new routes into Europe.
The group said that last year it saw the consolidation of some major long-term contracts for its Biomass division, including those with Iggesund and Helius. During the year it signed 15-year fuel supply agreements with biomass plants at Port Talbot and Evermore.
Stobart said there was more than a 40% uplift in divisional revenue to external customers in its Stobart Infrastructure & Civil Engineering division.
"This business remains key to our ability to drive up the value of our investments by using our internal capacity to improve and build assets. We will continue to grow our portfolio of external work, principally in the rail infrastructure sector," the company said.
The group said its Stobart Estates division delivered good results against the backdrop of a challenging property market.
Stobart shares were trading 1.1% lower at 134.00 pence Wednesday early afternoon.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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