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Stobart Group sees strong passenger growth at London Southend airport

Passenger numbers at Southend Airport have increased by 42% year-on-year in the six months to 31 August 2019

Airport passengers

Stobart Group Limited (LON:STOB), the aviation, energy and civil engineering group, said it continues to make strong progress in its two core divisions of aviation and energy.

In a trading update covering the six months to the end of August, the group said it is trading in line with expectations.

Stobart Aviation

Passenger numbers at Southend Airport have increased by 42% year-on-year in the six month period. The growth was driven by the start of Ryanair flights in April, Loganair flights in May and the continued successful growth of easyJet.

From October 2019, WizzAir will start flying from Southend to three new destinations. These new routes will help support the continued growth in passenger numbers at London Southend Airport in line with the group's target of reaching five million passengers a year by February 2023.

The group said it is taking a conservative view of passenger growth in the short-term, given the uncertainty in the sector (e.g. the collapse of Thomas Cook), with the board working on the basis of Southend welcoming 2.3mln passengers for the year ending 29 February 2020. This would represent an increase of 53% versus the previous year.

Stobart Energy

During the March-August period, the volume of waste managed, which is predominantly processed into waste wood fuel, increased by 148,000 tonnes to 806,000 tonnes. This is equivalent to a run rate of 1.7mln tonnes a year, which represents a 22% increase on the same period last year.

The continued improvement in performance is a result of all the energy recovery plants (except one) that Stobart Energy supplies under long term contracts, having reached full contractual operational volumes, the group said.

Elsewhere, the group’s Stobart Rail & Civils business, like the industry as a whole, has been affected by delays to tendering for works associated with Control Period 6, which commences on 1 April of this year.

The ongoing reorganisation at Network Rail has affected the pace of new contract awards such that they have been slower than management had anticipated for the half-year period; however, the board has been encouraged by the overall improvement in operational performance following the appointment of a new management team last year. The division has been reoriented to focus on securing profitable new external contracts and is well placed to secure further opportunities once Control Period 6 gathers momentum, Stobart said.

"Stobart Group has made considerable progress in the period, particularly in terms of the number of passengers that we have welcomed at London Southend Airport and the volume of waste fuel that we have been in a position to supply under contract,” said Warwick Brady, Stobart's chief executive.

“I am particularly encouraged by the quality of airline partners that we are now working with and the opportunity that brings to deliver future sustainable operating profits," he added.

Quick facts: Stobart Group Ltd

Price: 81 GBX

LSE:STOB
Market: LSE
Market Cap: £303.47 m
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