Update on Capital Review and Q4 dividend
The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
3 December 2018
Stobart Group Limited
('the Group')
Update on Capital Review and Q4 dividend
The Group has continued to progress its growth plans for Stobart Aviation, which reported a 37% year-on-year increase in passenger numbers at London Southend Airport, and Stobart Energy, which reported a 72% year-on-year increase in tonnes supplied at the time of its Interim Results in October.
This operational progress has continued during the second half and the Group is trading in line with expectations. This progress has also led the Group to identify an increasing number of potential projects with attractive forecast returns on capital.
The expansion opportunities at London Southend Airport are increasingly evident in view of the opportunities arising from the commercial agreements with Ryanair and easyJet, together with other airline partners. The agreements provide confidence that the airport will record significantly increased passenger numbers from next year, with the Group targeting 5 million passengers from 2022 at £10 EBITDA per passenger.
Similarly, Stobart Energy has a number of investment opportunities which are being evaluated including building, owning and operating renewable energy plants that will generate long-term, sustainable operating cashflows.
In consideration of these opportunities, the Group announced at its Interim Results in October that it would undertake a detailed capital review to ensure that the Group is best placed to optimise shareholder returns. The Board of Stobart Group intends to update the market on the full results of this review at the time of the Pre-Close Trading Statement in March 2019.
The Board has also considered the appropriate level of the FY19 Q4 dividend. Since March 2017, the Group has paid dividends to shareholders of £105m funded via disposals of non-strategic assets. Over the same period, gross capital expenditure of £67m has been invested in its operating divisions. Though the Group owns non-strategic assets with a book value at 31 August 2018 included in the Interim Statement of £149m, the Board believes it is prudent financial discipline to use proceeds from further disposals in the medium term primarily to invest in value-creating opportunities based on sustainable operating cash generation and to maintain a strong balance sheet. It therefore intends to reduce the Q4 dividend to 1.5p per share. This means that the total dividend paid in the current financial year is 15p per share (previous financial year: 16.5p per share).
The Board recognises the importance of dividends to its shareholders and will update the market accordingly, once it has completed the capital review.
A dividend of 1.5p per share will be paid on 31 January 2019 to shareholders on the register as at 11 January 2019.
The person responsible for arranging the release of this announcement on behalf of Stobart Group is Louise Brace, Company Secretary.
Enquiries:
Stobart Group Limited C/o Newgate Communications
Charlie Geller, Head of Group Communications
Newgate Communications +44 203 757 6880
Robin Tozer stobart@newgatecomms.com
Ian Silvera
Fiona Norman
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