Stobart's maiden year as a listed company makes comparisons difficult, but a reduced dividend at least gives the board room for manoeuvre in an environment where finance for capital projects is still hard to find. Meanwhile, the company's 'pay-as-you-go' approach to hiring out its vehicles, along with ongoing diversification, seems to be showing resilience in the downturn.
The overwhelming core of the business is still Stobart's road haulage operation, which contributed revenues of £387m and earnings after fleet finance costs (EAFFC) of £24.5m. This included the James Irlam and Innovate businesses, which were acquired for a total of £63m and contributed combined revenues during the period of £114m. Stobart Rail, which the company hopes will become a mainstay of the business, generated revenues of £38.2m and EAFFC of £3.5m, underpinned by strong demand for railway infrastructure expertise. Management also hopes to take advantage of the long-term trend for moving more goods by rail and reduce its exposure to the oil price. The company also made an offer to buy Carlisle airport for £14m.
Chief executive Andrew Tinkler said the decision to reduce the dividend was taken in part to keep up to £5m of cash on the balance sheet. He said that while obtaining working capital finance has not been a problem, asset-backed financing is still difficult and it would be prudent to build up some reserves to fund capital expenditure.
Broker estimates are currently under review.
STOBART GROUP (STOB) | ||||
|---|---|---|---|---|
| ORD PRICE: | 105p | MARKET VALUE: | £254m | |
| TOUCH: | 103-105p | 12-MONTH HIGH: | 143p | LOW: 71p |
| DIVIDEND YIELD: | 5.7% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 115p* | NET DEBT: | 43% | |
| Year to 28 Feb | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008** | 108 | 3.5 | 2.32 | 8.0 |
| 2009 | 431 | 23.9 | 9.81 | 6.0 |
| % change | +299 | +583 | +323 | -25 |
Ex-div: 20 May Payment: 22 Jun *Includes intangible assets of £223m, or 92p a share **14 months | ||||
