Stobart Group Ltd (LON:STOB) said it is trading in line with its expectations as its London Southend Airport has reopened to passengers after the coronavirus pandemic lockdown and its energy business has benefited from a restart in construction work across the UK.
In an update for its annual general meeting (AGM) on Thursday, the group’s chairman David Shearer said the company has made “good progress” in the execution of its strategy.
“As we focus on our two core sectors of Aviation, being Airports and Aviation Services, and the Biomass Energy business, we have committed to exit all non-core assets for value over the next three years. As a first step in this process, we have already completed a transaction to dispose of our loss-making Rail and Civils business, removing the ongoing risk to shareholders while at the same time securing a future for 188 employees”, he said.
Stobart said it has taken steps to enhance the passenger experience at Southend by putting in place cleaning measures and utilising existing space to accommodate passengers in the pandemic, meanwhile, it said its energy business “remains profitable, cash generative, with high barriers to entry and long-term contracts” and it aims to monetise the division over the next 18 to 24 months.
The group added that its Stobart Air division has opened a new base at Belfast City Airport and has put on sale routes to Edinburgh, Glasgow, Manchester, Birmingham, East Midlands and Leeds Bradford under its Aer Lingus franchise agreement in order to “optimise the existing fleet and to minimise financial exposure to the Stobart Group”.
The chairman noted that the company has “carefully stress-tested” its liquidity position and following a successful capital raise in June “remains confident in the group’s balance sheet, liquidity position and outlook”.
“Overall, despite the impacts of the [coronavirus] pandemic, the group continues to own a valuable London airport with significant medium-term growth opportunities and a strong cash generative Energy business. It has available liquidity to maintain and develop these assets following its successful capital raise and is focused on building value for shareholders as we move into a post (coronavirus) world”, he said.
Stobart shares were 0.8% lower at 25.3p in late-morning trading on Thursday.
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