Stobart Group Limited (LON:STOB) chief executive Warwick Brady has highlighted “significant underlying value” in the group’s aviation and energy assets as the firm takes steps to safeguard its business during the coronavirus (COVID-19) pandemic.
“There remain significant medium and long-term opportunities to further increase the value of the assets for our stakeholders”, Brady said in a statement on Monday.
"The challenges presented by the rapid spread of the COVID-19 virus have been significant. However, I am immensely proud and humbled by the response of our people to this global crisis. We have acted at pace to put in place steps to safeguard our business in the immediate term, and our people have consistently understood and supported the actions we have taken”, he added.
As part of efforts to protect its liquidity and cashflow, Stobart said it has frozen all capital expenditure apart from areas deemed critical for safety, furloughed around 50% of its staff and agreed a 20% pay reduction for its board and senior leadership alongside a 10% pay decrease for all other non-furloughed management.
The company also instituted a recruitment freeze from early March and deferred all variable pay awards to August at the earliest.
“The cumulative effect of these actions is to preserve the group's liquidity and provide cash headroom. Given the level of current uncertainty, particularly regarding the potential duration of the crisis, the board is also taking prudent steps to explore further funding options”, the company added.
Stobart also said it is not possible to provide financial guidance for the full year at present and its withdrawing all previously made guidance.
The shares were 3.4% higher at 47.6p in early trading on Monday.