Stobart Group - Overview of Operations
Stobart Group is a UK based infrastructure and support service business
operating in the biomass energy, aviation and railway maintenance sectors. It
also holds investments in a property and logistics portfolio. Objectives are to
develop and expand beyond the core logistics business, through penetration
of the biomass market, as well as creating opportunities to drive value, with a
strategic focus on growth areas such as aviation.
Stobart’s development strategy can be summarised as a combination of driving
shareholder value through three growth divisions (Energy, Aviation & Rail) whilst
realising asset value gains, with an exit of the Infrastructure and Investment
divisions. FY16 results highlighted that Energy (25% of group EBITDA) is on track
to supply over 2m tonnes p.a. by FY19, a result of additional future biomass
contracts secured. Realising asset value from property investments continue to
be a focal point, evidenced by a £9.1m valuation uplift from the Speke site (47
acres of investment property) in Liverpool. These assets were subsequently sold
in June, with c£11.8m net profit to be realised in FY17. Targets encompass an
FY19 timeline and management remain confident to be on track.
Key highlights from FY16 include securing additional Biomass contracts - 1.4m
tonnes come on stream between Dec-16 and May-18, with an average contract
length of 15 years. Aviation continues to make progress, with revenue per
passenger increasing by 15%. Property revaluation gains and associated cash
realisation (>£24m) from disposals of such assets have funded the £19.7m
returned to shareholders. Our expectation of continued material upside from
property revaluation in FY17, alongside a ramp up in operating activities, leaves
us positive on Stobart’s outlook.
Stobart Group is a U.K. infrastructure and support service business and has investments in a national property and logistics portfolio. Co.'s operating segments are: Stobart Energy, which supplies sustainable biomass for the generation of renewable energy; Stobart Aviation, which operates commercial airports, airline operations and leases aircraft; Stobart Rail, which delivers internal and external civil engineering development projects; Stobart Investments, which holds a non-controlling interest in a transport and distribution business; and Stobart Infrastructure, which focuses on management, development and realization of property assets and investments in biomass energy plants.
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