Stobart Group (STOB) is prioritising investment in two core businesses, London Southend Airport and Stobart Energy, and has suspended its dividend accordingly in order to free up capital for future expenditure.
Management is focusing on building out partnerships with the likes of easyJet (EZY) and Ryanair (RYA) as it chases a target of 5m passengers at Southend in the financial year to February 2023. Chief executive Warwick Brady said that the dividend, which could be reintroduced following the attainment of goals relating to the airport and energy, would be paid under a “mechanistic policy” linked to profits, rather than purely pence per share. The group expects to invest heavily in airport infrastructure over three years, spending between £40m and £60m.
Stobart Energy’s underlying cash profits increased by more than a third over the period to £11.7m, while it also expects to recover significant costs resulting from a power outage at the Tilbury Green Power Plant that took place from April until mid-October. Stobart expects to invest £10m in energy as part of its restructure.
House broker Cantor Fitzgerald forecasts full-year 2020 cash profits and a loss per share of £20.1m and 1.4p, respectively, improving to £34.7m and earnings per share of 2.2p in 2021.
| STOBART (STOB) | ||||
| ORD PRICE: | 117p | MARKET VALUE: | £438m | |
| TOUCH: | 117-118p | 12-MONTH HIGH: | 210p | LOW: 98p |
| DIVIDEND YIELD: | nil | PE RATIO: | 4 | |
| NET ASSET VALUE: | 70p* | NET DEBT: | 57%** | |
| Half-year to 31 Aug | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 69.4 | -10.6 | -2.63 | 4.50 |
| 2019 | 93.1 | -26.6 | -6.40 | nil |
| % change | +34 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £88.3m, or 24p a share **Excludes lease liabilities of £76.9m | ||||
