Stobart Group Limited (STOB) is an infrastructure and support services company. It operates across railway maintenance, biomass energy, and aviation sectors besides maintaining investments in the logistics portfolio and national property. The company operates Carlisle Lake District Airport and London Southend Airport. It also performs sourcing and processing of fuel to biomass plants through long-term contracts. Stobart provides rail network repair, improvement, and maintenance services.

Financial Highlights (FY2019, £ million)

(Source: Final Results, Company Website)

The company’s reported revenue (continuing operations) surged by 39 per cent to £146.9 million against the £105.4 million in FY18. From the two main operating divisions, Aviation and Energy, adjusted underlying EBITDA increased by 75 per cent to £24.1 million as compared with the previous year data. Reported underlying EBITDA loss stood at £4.8 million for the Rail & Civils division. As a result of an IFRS 15 transition, EBITDA loss improved by £3.9 million. The group loss for the period climbed by 144 per cent to £58.2 million as compared with the financial year 2018 loss of £23.9 million. Total dividend stood at £52.5 million. This was paid from debt facilities and non-core asset sales. Net debt surged to £83.1 million.

In aviation, passenger numbers increased by 33 per cent to 1.5 million passengers as compared with the previous year data. As a result of more consistent plant performance, the company’s Energy division reached a year-end run rate of 1.7 million tonnes per annum. The Margam and Mersey Bioenergy plants were estimated to reach commercial operations soon.

Share Price Performance

Daily Chart as at June-04-19, before the market closed (Source: Thomson Reuters)

On June 04, 2019, at the time of writing (before the market closed, at 10:25 am GMT), STOB shares were trading at GBX 103.12, down by 4.52 per cent against the previous day closing price. Stock's 52 weeks High and Low is GBX 272.50/GBX 101.80. At the time of writing, the share was quoting 60.37 per cent lower than the 52w High and 6.09 per cent higher than the 52w low. The group’s stock beta was 1.56, reflecting higher volatility of the stock against the benchmark index.

Stock's average traded volume for 5 days was 2,958,597.80; 30 days - 993,465.17 and 90 days – 685,202.46. The average traded volume for 5 days increased by 197.81 per cent against the 30 days average traded volume. The outstanding market capitalisation was around £399.48 million and a dividend yield of 12.50%.

Stobart is taking various strategic initiatives to drive its growth and expected to strengthen the group’s operations. Increasing global demand for energy could lead to a potential increase in the demand for the company’s products and related services to create energy infrastructure, offering significant growth opportunities to companies such as Stobart. Stobart’s business could be adversely affected in case of a cost overrun. An additional risk is the board dispute in the company.

The company now plans to invest in developing more than 10 million passenger airport and the infrastructure required to keep a supply chain & deliver biomass fuel of 2 million tonnes per annum. A wide range of end markets provide the company with an expanded customer base and growth opportunities in emerging markets.


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