Update: Energy wastes no time, Aviation in holding pattern
Stobart’s interims mark the next stage in demonstrating progress towards its 2018 strategic targets while maintaining underlying EBITDA (+3%). The partial disposal of the transport division in 2014 allowed the group to significantly strengthen its balance sheet and flexibility to finance its more embryonic businesses. In this context, we view the increase in debt as short term and reflective of certain project timings that help long-term value creation. Whereas tangible progress can be seen with further biomass contacts taking volume beyond the 2018 targets, airline talks at Southend are still ongoing, but have taken longer to complete. To reward shareholders’ patience as the repositioning feeds through to profitability, dividends have been maintained and represent an attractive 5.3% yield.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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