Stobart Group

LN: STOB

£445.1m market cap

118.8p last close

Stobart Group owns and operates London Southend Airport, renewable energy fuel processing and supply assets, a rail and civil engineering business, a property portfolio, a regional airline/leasing company and non-controlling equity investments in logistics.

Investment summary

We see investor opportunity in Stobart’s main divisions of Aviation and Energy, which continue to perform well and will benefit from planned investment, notably in Aviation, which should expand the business and drive long-term profitability. Underlying EBITDA grew strongly, up 10% in the first half. Aviation saw a strong rise in both passenger numbers and underlying EBITDA per passenger at London Southend airport, its main business. Energy’s performance has benefitted from higher volumes, a better customer mix, operational gearing and cost management.

Y/E Feb
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2017A 129.0 34.0 27.0 8.0 14.9 N/A
2018A 242.0 154.0 136.0 38.0 3.1 N/A
2019E 279.0 26.0 8.0 2.3 51.7 N/A
2020E 311.0 41.0 18.0 5.0 23.8 8.9
Industry outlook

We see a long-term growth outlook for both Aviation and Energy industries. In Aviation London Southend airport should benefit from significant passenger growth in 2019 and 2020 also thanks to new/expanded agreements with airlines, while in Energy a growing biomass demand outlook should continue to support revenue growth. Due to the exposure to the UK, uncertainties around the economic impact of Brexit represent one of the most significant risks, in our view.

Last updated on 15/11/2019
Sector
Industrials
Share price graph
Balance sheet
Forecast net debt (£m) 108
Forecast gearing ratio (%) 30
Price performance
%
1m
3m
12m
Actual (8.8) 6.6 (38.8)
Relative* (9.9) 2.2 (41.4)
52-week high/low 205.0p/100.4p
*% relative to local index
Key management
Iain Ferguson CBE Chairman
Warwick Brady CEO
Richard Laycock FD