Stobart Group Ltd (lon:stob)
STOB – Found A Buyer For Their Rail Division

Stobart Group Ltd Financials

ItemCurrent PeriodPrevious Period
Year20192018
Period12 Months12 Months
Revenue£170m£147m
Earnings
Adjusted Earnings
EBITDA(£13m)(£6m)
Adjusted EBITDA
Statutory Profit(£137m)(£58m)
Adjusted Profit
Total Debt
Net Debt£160m£83m
Stobart Group Ltd Share Price
Grade:The Orange Grade - Shares That I Think Show Promise With A Few Caveats.
Title: STOB – Found A Buyer For Their Rail Division
Company: STOB - Stobart Group Ltd
Share Price Then: 25p
Author: Ian Smith
Date: Mon 27 Jul 2020
Comments: Stobarts have gotten the Rail Division off their books and seeing at it was a loss making division the fact that they announced it sold for one thousand pounds £1,000, plus possibly an extra £2.9m isn’t great but under the circumstances probably the only option.

If none of the £2.9m appears then this will be a loss of around £9m, so this is historic share holder money lost, about a quarter of the group’s revenue gone but no losses to drag down aviation and energy, while the group still has it.

Any payment that helped to bring debt down would have welcome, even if the £2.9m does appear it won’t have much of an impact on around £168m

The recent share placing unfortunately doesn’t seem to have stabilised the price, probably in part because the government seems to have no policy on air travel.
Read Count: 121

Buy/No Buy In A Nutshell
NegativesHigh debt, recent share issue and COVID affecting the now core aviation division.
PositivesA bit of a disaster recently but a very solid possibilty of success as focusing on its own airports and related services more generally. Rail division recently sold/given away.
Initial Review Price26p
Last Review Price24.3p
Last Review Date02-Sep-2020
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Previous Commentaries On Stobart Group Ltd
Date Share Price Author Commentary
Fri 05 Jun 202047pIan Smith

Stobart Group – Share Placing



Stobart Group (STOB), the aviation and energy group not the trucking (ESL) company announced a share issue, the issue was announced on the 4th of June and closed by the 5th, for the majority of the fund raise.

Prior to the issue there were about 374m shares in circulation, this is increased by 250 meaning that the new shares will represent 40% of the enlarged share pool, placed at 40p against a pro covid typical price of 100p-150p.

These shares will be listed on the 29th June.

The reason for this being poor year end results, as well as the share issue there has been an extra £40m RCF created to add to the existing £80m.

Flybe’s closure has been written of at £54m, another £96m of non cash adjustments and £19m of new business setup costs led to a loss of £137m, compared with a £58m loss in 2018

Currently revenue is split Aviation £57m (£9m profit), Energy £76m (£24m profit), Rail £41m (£7m loss) and a few million from other activities.

The plan for the future seem to be to sell off everything other than the aviation division, rail is to go in 2021 and Energy in 18 months to two years and the remainder as and when, with only the energy division sounding like a profitable disposal.

The aviation division runs three airports in Southend (London Southend Airport), Carlisle (Carlisle Lake District) and Darlington (Teesside International) and a support service at some regional airports.

So we could say that there are two divisions that appear to be profitable, £33m for a company with a market cap of around £170m which is quite attractive until you consider that it has £168m in loans.