Stobart Group suspends dividend to expand airport

SHAREHOLDERS in London Southend Airport operator Stobart Group are unlikely to get a dividend for at least another two years, according to the company.

Bosses suspended the dividend yesterday and said they would use the money to expand operations and hit a target of five million customers passing through the airport by 2023.

Shares dropped 4.7% as a result, down 5.8p at 117.2p.

Chief executive Warwick Brady said: “We can deliver far more value to shareholders from investment and believe the share price should go up. The dividend is important, but we’re going to take that cash to grow first.

“Over time we’d like to return the dividend, but it needs to be at the right time.

“The strategy is to grow the airport to five million passengers. At that point, we will look at it (the dividend).”

The firm has paid out £42.4m in dividends in two years.

The decision came as Mr Brady revealed that passenger numbers in the six months to August 31 jumped 42% compared with a year earlier, to 1.19 million, with aviation revenues up 26% to £26.4m.

Total revenue during the period, including its energy generation business, hit £93.1m, up 34%, although losses for the period extended by 19.4% to £20.9m due to writedowns to “goodwill” on its rail engineering division.

On an underlying basis, which excludes one-off costs, pretax profits for the period were £12.1m.

Mr Brady said the airport benefited from strikes by British Airways pilots earlier this year, with more people heading to his airport to fly on other airlines.

He also said he expects to see growth due to Flybe’s expansion at the airport as it rebrands to become Virgin Connect.

He added: “EasyJet’s maturing, Ryanair has just started at the airport along with Wizz Air. They are three of the highest-growth airlines in Europe, so we’re confident that they can help us grow.”

He said the recent Extinction Rebellion protests had not hit the airport or affected passenger habits.