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Southend profits lift off for Stobart

More passengers flying through London Southend Airport provided a boost for the services companies at the half year
October 20, 2017

More Londoners have realised there’s another airport east of the city, much to the benefit of Stobart Group (STOB). Passenger numbers at London Southend Airport increased by a quarter year on year to 610,492, which helped boost aviation revenue from £12m to £97.5m, and management are aiming to have 5m passengers pass through the airport by 2022. This would likely require another terminal to be built at a cost of around £50m. Flybe and easyJet (EZJ) have committed more planes to fly through Southend, and the group is in discussions with other carriers, too. 

IC TIP: Buy at 271p

Delayed commissioning at two of its plants meant that revenue in the energy division fell by nearly 18 per cent to £29.7m, while three other have also continued to experience “severe delays”. But chief executive Warwick Brady says these are short-term issues: the timing of rail contracts can be “lumpy”, according to Mr Brady, and so turnover in the engineering division fell by more than half to £6.3m as projects were pushed back.

Analysts at Cenkos expect pre-tax profit of £138m in the year to February 2018, giving EPS of 37.5p, compared with £27.4m and 7.8p in FY2017.

STOBART GROUP (STOB)  
ORD PRICE:271pMARKET VALUE:£954m
TOUCH:270-271p12-MONTH HIGH:304pLOW: 150p
DIVIDEND YIELD:7.2%PE RATIO:10
NET ASSET VALUE: 132pNET CASH:£2.9m
Half-year to 31 AugTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201665.310.82.73.00
201712511232.09.00
% change+91+930+1109+50
Ex-div:21 Dec   
Payment:tbc