Stobart Group (STOB)

Business description

Stobart consists of two divisions: Infrastructure and Support Services operating across Aviation, Energy, Rail and Investments.

Investment summary

The integrated aviation strategy leverages the arrival of CEO Warwick Brady. The group is investing a further £30-40m (of which £5-10m is in FY18) in awareness, branding, route development and marketing at London Southend airport over the next four years to 2021 to accelerate value creation. We see reduced energy earnings as temporary, as overall biomass requirements at the plants have not declined (indeed, the contracts have not yet started). Rail continues to develop its pipeline of work. Short-term volatility of earnings should be balanced by the overall growth strategy.

Last updated on 02/03/2018

Y/E Feb Revenue (£m) EBITDA (£m) PBT (£m) EPS (p) P/E (x) P/CF (x)
2016A 126.7 30.0 18.4 2.7 81.5 3609.1
2017A 129.4 35.0 27.4 (2.7) N/A N/A
2018E 251.4 134.0 117.8 29.6 7.4 N/A
2019E 321.7 39.0 26.3 3.9 56.4 31.6

Last updated on 15/02/2018

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Stobart Group

Industry outlook

Stobart Group continues to evolve from a holding company to an operating group, targeting £100m of underlying EBITDA by 2022 (from £35m in 2017), driven by material growth in the Energy and Aviation segments. Once mature, these segments should generate strong, dependable cash flows, and attract higher multiples and strong long-term value. Until then, the company is committed to paying a dividend of 18p/share, partly funded by asset sales.

Last updated on 02/03/2018

Key management

Iain Ferguson CBE, Chairman
Warwick Brady, CEO
Richard Laycock, FD

Company address

22 Soho Square
United Kingdom
+44 (0) 1925 605 400
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