Stobart Group battens down in Southend for air travel recovery

What Stobart does

Stobart Group Ltd (LON:STOB) is the owner of London’s Southend Airport, Dublin-based air franchise operator Stobart Air and aircraft leasing business Propius.

The London-listed group has been ramping up investment at the airport in recent years.

After selling its regional airline and aircraft leasing businesses as part of as the formation of Connect Airways with Virgin Atlantic, Stobart bought them back from the administrators in April after the collapse of the Flybe arm.

How it’s doing

In November, Stobart said freight operations at Southend Airport had helped offset some of the disruption caused by the coronavirus (COVID-19) pandemic during the six months to end September 2020.

The company said revenues for the period dropped by 29% to £53.2mln, with Aviation seeing a 49% drop and Energy, Stobart’s other key division, down by 22.5%.

Stobart posted an underlying loss of £4.9mln against a profit of £2.5mln a year ago, though losses by businesses for sale and also a £55mln impairment charge for airline Stobart Air and aircraft lessor Propius meant a pre-tax loss of £77.4mln.

Aviation cut its underlying loss (EBITDA) to £1.7mln, down from a £0.9mln loss a year earlier, due to what it said were strong uninterrupted income through the global logistics operations and lower marketing support costs.

At Stobart Energy, supplies of waste wood for the winter have been built up to guarantee certainty of supply.

At the end of the period, Stobart had cash facilities of £119mln and had reduced the cash burn for its two core businesses to £2mln per month.

What the CEO says: Warwick Brady

“Looking forward, the Group has immediate access to liquidity, with £119.1m in cash and undrawn banking facilities.

“Our focus remains on what we can control, namely managing our operations well, optimising both cost and cash management and rationalising the portfolio to maximise value.

“We continue to believe our future strategy and the medium-term move to a pure-play airport and aviation services business will deliver superior shareholder returns.”