Stobart Group set to meet targets as CEO steps down

Investors in infrastructure and support services company Stobart Group were gathering in Guernsey on Thursday for the company’s annual general meeting, with the board set to confirm it remained on track to deliver its targets at London Southend Airport, and in its biomass supply business.

The FTSE 250 firm had aimed to process 2.5 million passengers at the Essex airport, as well as 2 million tonnes of biomass, by the end of the 2018 calendar year.

It said it had also established extended targets to 2022, and was confident that it could continue to deliver value to shareholders through that period and beyond.

“Since 1 March, we have generated cash of £159.7m from two transactions,” the board said in its statement.

“In April 2017, we realised £113.3m of cash following the IPO of Eddie Stobart Logistics and retained a 12.5% shareholding in the AIM-listed business which was valued at £71.5m on flotation.

“The total value generated represented a significant uplift of over £120m on the year-end balance sheet value.”

Also in April 2017, the board completed a sale and leaseback of eight ATR aircraft in its leasing company, realising £46.4m cash.

“These transactions have provided the business with further cash resources to support the dividend and to invest in creating further value across our divisions.”

The company reported a proposed final dividend of 4.5p last month, payable on 7 July, subject to shareholder approval at the AGM, bringing the total dividend for the year to 13.5p per share.

“The board reaffirms its intention to maintain the increased level of quarterly dividend payments to reflect the cash generation of the group.

“The board expects to pay a dividend of 4.5p per quarter, starting from 7 July 2017, representing an annualised dividend of 18p.”

As it had previously reported, after almost ten years as group CEO, Andrew Tinkler was set to step down as CEO on 1 July and would continue as an executive board member, giving the board continued access to his input at group level.

Warwick Brady, deputy CEO and former COO at easyJet, would be appointed to the board on 1 July as CEO, subject to approval at the AGM.

The board said Brady would focus on delivering the targets in its aviation, energy and rail operating business.

Richard Butcher had also not offered himself for re-election at the AGM and would step down from the board, but would continue to manage the “creation and realisation of value” in the infrastructure and investments divisions alongside Andrew Tinkler, the board reported.

Andrew Tinkler would also head a newly-formed independently-owned business, Stobart Capital, it was revealed on Thursday.

It would work with the group and other investors to create value from generating and managing opportunities in sectors where Stobart had existing expertise, such as businesses related to aviation and energy.

“Any such investments will be made directly in SPV companies, rather than via Stobart Capital itself, and alongside external investors.

“It is expected that these will be non-controlling interests in the short term.”

The group said it was trading in line with the board's expectations, and a further update would be provided when it announced its results for the six months to 31 August, which was expected to be made on 19 October.

“I would like to thank all stakeholders for their support over the last 10 years and I am looking forward to working with Warwick as the new CEO of the group,” said Andrew Tinkler.

“Approximately 50% of my time will be dedicated to helping support Warwick and the existing businesses as an executive director on the group board.

“In particular, I will be using my experience and skill set to help deliver and realise the value in our infrastructure and investments divisions.”

Tinkler confirmed the remainder of his time would be spent in Stobart Capital, looking for strategic opportunities to support the strategy of the group and “create more value”.