Stobart Group, which owns Stobart Air and London Southend airport, has reiterated its intention to sell Stobart Air, remarking that the trading outlook for the airline has deteriorated significantly since the capital raise due to the continued quarantine arrangements in Ireland, with limited flights operating.
At the time of the capital raise in June 2020, Stobart Group planned for a potential no-fly scenario through the winter period and said that it had consequently taken appropriate action to manage its cost base and minimise cash burn. Adding that it intends to exit the business in “early course”. To that end, it is engaging actively with parties interested in acquiring its stake and with Aer Lingus to enter a new commercial arrangement beyond December 2022 as part of the process.
Passenger flights resumed from June 2020 but rolling quarantine arrangements led passenger numbers to fall by 89.5% to 124.5k passengers. In its interim results for the six months to 31 August 2020, Stobart Group reports a 48.9% fall in revenue for its aviation division to £13.5million. Aviation EBITDA improved from a loss of £1.7m to a £0.9m loss due to strong uninterrupted income through the global logistics operations and lower marketing support costs at London Southend Airport.
"COVID-19 has created unprecedented challenges for the Group,” said Warwick Brady, Chief Executive, Stobart Group. “In response, we have taken decisive action to bolster liquidity, reduce cash burn and protect our long-term strategic objectives. These actions should allow us to emerge from this crisis in the best possible position to deliver our focused strategy."
"Looking forward, the Group has immediate access to liquidity, with £119.1m in cash and undrawn banking facilities. Our focus remains on what we can control, namely managing our operations well, optimising both cost and cash management and rationalising the portfolio to maximise value. We continue to believe our future strategy and the medium-term move to a pure play airport and aviation services business will deliver superior shareholder returns.