Stobart Group Limited (LON:STOB), the aviation and energy group, is to raise £100mln from a share issue to fund its pivot to focus on aviation.
The company announced last night it was planning to raise funds by issuing shares at between 35p and 40p and it has managed to get the issue away at 40p.
Shareholders will get to participate in the equity issue via an open offer while directors of the company will take up shares to the tune of around £356,000 in aggregate.
The group, which owns Southend Airport, said it requires additional liquidity to fund its short-term cash obligations and to enable it to build a strong foundation from which it can return its Aviation business to growth.
"We are delighted to have received support from both our existing shareholders and new investors for our equity issue, which will place the group on a sound financial footing going forwards,” said David Shearer, the chairman of Stobart Group.
Recognising the changes in the economic and social environment as a result of the coronavirus (COVID-19) pandemic, the board has refined its strategy to focus on aviation.
At London Southend Airport, the group will design and implement an improved passenger experience for post-COVID 19 travel, making use of significant unused space and technology to enhance passenger confidence, while providing a cost-efficient base of operation to airlines.
The company will also look to realise value from its Energy business, which is starting to benefit from a restart in the construction sector. The board believes the business is likely to be attractive to strategic partners and infrastructure investors. Stobart Group will look to extract money from the business over the next 18 to 24 months.
Meanwhile, the group plans to withdraw from its Rails & Civils business during the current fiscal year as it is unlikely to generate a significant return given the volatile nature of the business.
As well as announcing a share issue, the group released its results for the 12 months to the end of February that showed a 15.9% increase in revenue to £170.2mln from £146.9mln the year before.
The group's Aviation arm saw revenue rise to £56.8mln from £39.4mln the year before, while the Energy business grew its top-line to £76.3mln from £65.1mln.
Stobart's underlying earnings (EBITDA) shot up 48.2% to £16.04mln from £10.83mln the previous year. The underlying loss before tax widened to £19.40mln from £13.24mln the previous year, while the reported loss was £157.98mln versus a loss of £42.1mln the previous year.
Warwick Brady, the chief executive officer of Stobart Group commented: “We have a cost-efficient proposition for airlines and will further develop our passenger-focused airport experience that seeks to maintain passenger flow and provide enhanced customer confidence. Therefore, we will focus our investment and our business in this asset by seeking to dispose of our non-core businesses and, in due course, monetise Stobart Energy."
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