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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. Interest in Flybe has been ended for now and other airline options are being explored. Lower energy earnings look temporary, as several biomass contracts are yet to start. Rail continues to develop its pipeline of work. Short-term earnings volatility should be balanced by the overall growth strategy. FY18 report on 10 May.

Last updated on 27/04/2018

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 94.4 4183.3
2017A 129.4 35.0 27.4 (2.7) N/A N/A
2018E 251.4 134.0 117.8 29.6 8.6 N/A
2019E 321.7 39.0 26.3 3.9 65.4 36.6

Last updated on 26/04/2018

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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 27/04/2018

Key management

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

Company address

22 Soho Square
London
W1D 4NS
United Kingdom
+44 (0) 1925 605 400
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