Stobart Group has announced that it will “withdraw from the Rail & Civils business” by February 2022.
The announcement came as the Group published its financial results for the year ending 29 February 2020. The two “main operating divisions” both made a profit (Aviation £8.6 million, Energy £24.2 million), up 36 per cent overall from the previous year.
Rail & Civils, on the other hand, posted a £7.1 million loss, compared with a loss of £4.8 million a year before.
In its summary, the company said that it would:
- Focus on Aviation. At London Southend Airport, the Group will specifically design and implement an improved passenger experience for post-COVID 19 travel, making use of significant unutilised space and technology to enhance passenger confidence, while providing a cost-efficient base of operation to airlines;
- Realise value from the Energy business as a maturing, cash generative and stable business. This business is starting to benefit from a restart in the construction sector and is likely to be attractive to strategic partners and infrastructure investors and we will look to monetise value for shareholders over the next 18 to 24 months;
- Withdraw from the Rail & Civils business during the course of FY21 (by the end of February 2022). This business was impacted by continuing costs on a legacy contract and is unlikely to generate an appropriate return for shareholders given the risks associated to it.
All other non-core businesses or assets will be realised for value over the next three years.
As Stobart Group can trace its history back to WA Developments, a railway civil engineering company that purchased Eddie Stobart in 2004, this move means the Group is turning its back on its roots.
Warwick Brady, chief executive officer of Stobart Group, said: “We are today announcing a clear plan to stabilise the business and provide a secure platform to move forward.
“We have a cost-efficient proposition for airlines and will further develop our passenger-focused airport experience that seeks to maintain passenger flow and provide enhanced customer confidence.
“Therefore, we will focus our investment and our business in this asset by seeking to dispose of our non-core businesses and, in due course, monetise Stobart Energy.”
UPDATED – 23 June 2020
Under the headline “BUSINESS AS USUAL”, a Stobart Rail & Civils spokesperson wrote on Twitter:
“It’s the start of an exciting new chapter for us. We have a number of identified interested parties who are better placed to invest in our Rail & Civils division. It’s an evolving and exciting time and the potential investment will help stabilise and grow the business through these difficult times of COVID, lockdown and beyond. Exciting times ahead, watch out for further updates!!”