Sto­bart Group posts €20m loss as court­room show­down looms

Irish Independent - Business Week - - FRONT PAGE - John Mul­li­gan

STO­BART Group, the UK trans­port group whose air unit op­er­ates the Aer Lin­gus Re­gional ser­vice, posted a £17.5m (€19.8m) loss in the first half of its year, com­pared to a £111.9m (€126.7m) profit a year ear­lier, as it emerged from a bruis­ing board­room bust-up dur­ing the sum­mer.

Rev­enue at the group rose 21pc to £151m (€171m) in the first half, but that in­cluded £15.7m (€17.7m) gen­er­ated from Sto­bart’s fran­chise agree­ment with Flybe, which is com­ing to an end in 2020.

The com­pany – whose in­ter­ests range across avi­a­tion, rail­way en­gi­neer­ing and biomass – said that it in­curred an £18m cost re­lated to its in­vest­ment in its Lon­don Southend Air­port dur­ing the first half of the year.

Its net debt also dou­bled to more than £75.5m (€85.5m) in the first six months of 2018.

How­ever, Sto­bart said pas­sen­ger num­bers at Southend rose 37pc in the pe­riod to 838,742.

The group sealed a deal ear­lier this year with Ryanair, which will op­er­ate a base from the air­port start­ing next sum­mer, with three air­craft fly­ing 13 routes. Easy­jet also op­er­ates from Lon­don Southend.

But Sto­bart’s avi­a­tion di­vi­sion posted a loss of £2.7m com­pared to a £3.6m profit in the first half of 2017, with £18.1m (€20.5m) of the most re­cent loss re­lated to the group’s Flybe fran­chise op­er­a­tion.

Its en­ergy di­vi­sion posted earn­ings be­fore in­ter­est, tax, de­pre­ci­a­tion and amor­ti­sa­tion (ebitda) of £6.5m, com­pared to £2.5m a year ear­lier.

CEO War­wick Brady said the com­pany had re­mained fo­cused on its avi­a­tion and en­ergy units.

“Hav­ing in­vested in the in­fra­struc­ture for these di­vi­sions, we are now wellplaced to ac­cel­er­ate our com­mer­cial growth plans and demon­strate the value of the group’s ex­cel­lent op­er­at­ing busi­nesses,” he said.

The com­pany also said that it plans to “grow its valu­able re­la­tion­ship” with Aer Lin­gus and “max­imise its rev­enue po­ten­tial and im­prove load fac­tors on es­tab­lished routes”.

Sto­bart sacked its for­mer CEO, An­drew Tin­kler, as a di­rec­tor of the group last June.

The group then stated that it would be im­mi­nently is­su­ing le­gal pro­ceed­ings against Mr Tin­kler for al­leged “breach of con­tract and breach of fidu­ciary duty”.

Sto­bart also claimed that Mr Tin­kler had made de­ci­sions re­gard­ing a failed takeover plan for Flybe ear­lier this year “to en­rich him­self”.

Mr Tin­kler has de­nied the al­le­ga­tions and is also counter-su­ing Sto­bart claim­ing that his dis­missal as a di­rec­tor in June was in­valid. Le­gal rep­re­sen­ta­tives for the two sides at­tended a hear­ing in Lon­don on Tues­day. A trial is sched­uled to take place next month.

Af­ter a dra­matic show­down at Sto­bart’s an­nual gen­eral meet­ing in Guernsey in July, Mr Tin­kler, and his back­ers, nar­rowly failed in their ef­forts to have in­cum­bent chair­man Iain Fer­gu­son re­moved from the board.

Mr Tin­kler owns 7pc of Sto­bart, which has a mar­ket cap­i­tal­i­sa­tion of £734m (€832m). He has claimed that key in­for­ma­tion has been with­held from share­hold­ers.

On course: Sto­bart Air man­ag­ing di­rec­tor Graeme Buchanan and Group CEO War­wick Brady, who said the com­pany re­mains fo­cused on avi­a­tion and en­ergy and is well-placed to boost its growth plans on both

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