Report

Disposal-driven returns plus underlying growth

We were, on balance, reassured by Stobart’s interim results. The 7.8% yield, supported by the continuing disposal plan, gives equity holders more than enough compensation before operations in Energy and Aviation fully ramp up to their FY19e/CY18 objectives. We adjust our near-term forecasts upwards slightly to reflect the observed H117 margin expansion, but leave our FY19 target year estimates largely unchanged. We believe in the deliverability of Stobart’s FY19e growth targets but, in the case of the Aviation business, we would be further reassured by concrete evidence of passenger growth.
Underlying
Esken Limited

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.

Provider
Edison Investment Research
Edison Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

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