Delivering our growth strategy. Interim results October 2018

Transcription

1 Delivering our growth strategy Interim results October 2018

2 Introduction Financial highlights Underlying EBITDA from our two main operating divisions increased by 34% to 24.4m Underlying Aviation EBITDA increased 14.6% to 15.7m Underlying Energy EBITDA increased 88.8% to 8.7m 34.7m returned to shareholders with dividends of 9.0p per share paid in the period Commercial progress Continued growth in passenger numbers at London Southend Airport Extended relationships with existing airlines and attracted new airlines at airport Increased biomass tonnages traded Increased EBITDA per tonne 2 INTRODUCTION AVIATION ENERGY RAIL & CIVILS INFRASTRUCTURE INVESTMENTS FINANCIAL REVIEW GROUP SUMMARY

3 Strengthening commercial team and governance Board appointments Nick Dilworth Chief Operating Officer Interim appointments Michael Williamson Interim Chief Financial Officer Company appointments Russell Reynolds Leading independent search firm Ginny Pulbrook Non-Executive Director Angela Smith Interim Head of HR Alice Mayhew, Barrister, Devereux Chambers Independent investigation into alleged bullying and whistleblowing 3 INTRODUCTION AVIATION ENERGY RAIL & CIVILS INFRASTRUCTURE INVESTMENTS FINANCIAL REVIEW GROUP SUMMARY

4 Strategy Focus on commercial progress in our core operating divisions. Focus the business Focus on Aviation and Energy accelerate divestment of nonstrategic assets Build the right team Appoint experienced commercial operators in key roles Invest in our infrastructure Invest in growing Aviation and Energy divisions in order to deliver strong and sustainable operational cashflow Deliver our targets On track to deliver 5m passenger airport and 3m tpa energy business 4 INTRODUCTION AVIATION ENERGY RAIL & CIVILS INFRASTRUCTURE INVESTMENTS FINANCIAL REVIEW GROUP SUMMARY

5 Operating divisions 5

6 London Southend Airport: Attracting new passengers INTRODUCTION AVIATION ENERGY RAIL & CIVILS INFRASTRUCTURE INVESTMENTS FINANCIAL REVIEW GROUP SUMMARY

7 London Southend Airport: Accelerating passenger growth Aim To deliver 5m passengers at 10pp EBITDA by London Southend Airport is London s fastest growing airport and was voted Which? Best airport in London for the sixth year running. Passenger numbers +37% to 838,742 Growing passenger numbers easyjet based fourth plane at LSA, and now expect over 1m passengers in 2018 Ryanair to base three aircraft at LSA, bringing additional 1m passengers from Summer 2019 Underlying EBITDA per passenger +87% to 3.26 Growing EBITDA per passenger Signed agreement with The Restaurant Group (TRG), to introduce six new food and beverage brands TRG Concessions opened Costa Coffee and Giraffe STOP Navigator pub arriving Autumn 2018 Further agreements with Air Malta and Adria Airways bringing total routes to 34 (2017: 27) Over 90% occupancy rate at The Holiday Inn Well on track to welcome 2.5m passengers in 2020 and expansion plans underway for 5m passengers We expect significantly lower cost per passenger leading to higher EBITDA per passenger with airport capacity being better utilised 7 INTRODUCTION AVIATION ENERGY RAIL & CIVILS INFRASTRUCTURE INVESTMENTS FINANCIAL REVIEW GROUP SUMMARY

8 Stobart Aviation: Where we are today Stobart Aviation financial summary Aviation 31 Aug Aug Feb 2018 m 6 Months 6 Months Year Revenue Underlying EBITDA Investment in route development and marketing (18.0) (7.5) (18.9) Passenger numbers LSA (number) 838, ,492 1,125,820 Underlying EBITDA per passenger LSA ( ) Highlights Stobart Group invested 18.0m in development and marketing of flights from LSA Large part of this included operation of Stobart Air routes under Flybe franchise Securing milestone agreement with Ryanair demonstrates value of this investment With Ryanair contract now in place, Stobart Air will redeploy aircraft to service new routes London Southend Airport easyjet based fourth plane and will be joined by Ryanair in H Stobart Jet Centre Over 1,000 movements since relaunching in December 2017 Stobart Air Passenger numbers up 16.9% Stobart Aviation Services Secured a significant contract with easyjet at London Stansted 8 INTRODUCTION AVIATION ENERGY RAIL & CIVILS INFRASTRUCTURE INVESTMENTS FINANCIAL REVIEW GROUP SUMMARY

9 Stobart Energy: Increasing tonnages sold Aim To deliver 3m tonnes of biomass at 12 per tonne EBITDA by 2022 Stobart Energy is the UK s leading provider of biomass and has existing contracts to supply 2m tonnes p.a. Tonnages sold +71.9% to 657,950 Best in class infrastructure Six wood management sites EBITDA per tonne +9.8% to Well placed as plants start to operate consistently Fuel plants commissioned last year now approaching commercial volumes 135 walking floor trailers YoY improvement driven by customer mix, increased volume and focus on cost management End to end supply chain software, PO cost management and Risk and Compliance system 9.8% improvement in Underlying EBITDA per tonne proves the model ahead of strategic target of 12 We have the infrastructure in place to ensure the division can grow rapidly as plants start to operate consistently 9 INTRODUCTION AVIATION ENERGY RAIL & CIVILS INFRASTRUCTURE INVESTMENTS FINANCIAL REVIEW GROUP SUMMARY

10 Stobart Energy: Where we are today Stobart Energy financial summary Energy 31 Aug Aug Feb 2018 m 6 Months 6 Months Year Revenue Underlying EBITDA Tonnes sold (number) 657, , ,920 Underlying EBITDA per tonne ( ) Highlights 71.9% increase in tonnes sold Plants in commissioning last year coming on line Customer mix Tight cost control Delivered 9.8% increase in underlying EBITDA per tonne to Non-underlying costs of 2.2m reflect unused capacity Plant Volume since first wood (tonnes) Target volume per annum (tonnes) First wood Notification Commercial takeover MBE 133, ,000 Dec 2016 A Jan 2019 N TGP 161, ,000 Mar 2017 A Nov 2018 N Templeborough 16, ,000 Mar 2018 A Nov 2018 N Margam 3, ,000 May 2018 A Dec 2018 E Port Clarence N/A 250,000 Jun 2019 N Sep 2019 E Cramlington 52, ,000 Jul 2017 A Jul 2017 (1) A = Actual N = Formal plant notification E = Stobart estimate (1) Still to be agreed 10 INTRODUCTION AVIATION ENERGY RAIL & CIVILS INFRASTRUCTURE INVESTMENTS FINANCIAL REVIEW GROUP SUMMARY

11 Stobart Rail & Civils: Project reviews and focus on contract quality Stobart Rail & Civils Rail & Civils 31 Aug Aug Feb 2018 m 6 Months 6 Months Year Revenue Underlying EBITDA (4.8) Where we are today The management team strengthened with recent appointments of new finance director, commercial director and two regional sales directors More prudent accounting policy in terms of revenue recognition Undertaken detailed review of commercial operations, contracts and project finances Going forward More focus on securing contracts with external tier one customers External new business opportunities supported by having: Successfully achieved approved bidder status for Manchester s Metrolink Successfully achieved approved bidder status for Transpire, the trans-pennine route upgrade Secured civil engineering contracts with Network Rail at Newton Heath 11 INTRODUCTION AVIATION ENERGY RAIL & CIVILS INFRASTRUCTURE INVESTMENTS FINANCIAL REVIEW GROUP SUMMARY

12 Stobart Infrastructure and Investments summary Stobart Infrastructure financial summary Stobart Investments financial summary Infrastructure 31 Aug Aug Feb 2018 m 6 Months 6 Months Year Revenue Underlying EBITDA (1.1) Number of disposals 2-4 Net proceeds from disposals Infrastructure asset values Disposed of Carlisle office and Widnes properties at book value or above Moved to new Group offices in Carlisle and Widnes Further property disposal at book value in October 2018 EBITDA loss in period while Carlisle Lake District Airport closed for development works Investments 31 Aug Aug Feb 2018 m 6 Months 6 Months Year Revenue Underlying EBITDA profit on partial disposal of Eddie Stobart Underlying EBITDA other (inc. dividend) Underlying EBITDA total Eddie Stobart Logistics investment value Remaining Infrastructure and Investments non-operating assets have a book value of 167.2m 12 INTRODUCTION AVIATION ENERGY RAIL & CIVILS INFRASTRUCTURE INVESTMENTS FINANCIAL REVIEW GROUP SUMMARY

13 Financial summary 13

14 Revenue and profit performance Divisional revenue summary EBITDA by division 31 Aug Aug Feb 2018 m 6 Months 6 Months Year Aviation Energy Rail & Civils Investments Infrastructure Eliminations (7.1) (11.7) (19.8) Effect of UKFFO Total Revenue The financial effect of the accelerated investment in growth at London Southend Airport, through the UK Flybe franchise operations 31 Aug Aug Feb 2018 m 6 Months 6 Months Year Group revenue Underlying EBITDA by division Aviation Energy Rail & Civils (4.8) Investments * 1.3 * Infrastructure (1.1) Central costs and eliminations (4.3) (5.5) (13.3) Underlying EBITDA * 30.2 * Profit on disposal of investment in ESL Underlying EBITDA * Excluding profit on disposal of investment 14 INTRODUCTION AVIATION ENERGY RAIL & CIVILS INFRASTRUCTURE INVESTMENTS FINANCIAL REVIEW GROUP SUMMARY

15 Underlying EBITDA bridge (10.9) (2.5) (1.0) (3.3) (1.7) (2.0) m 0 (5) (18.0) (17.5) (10) (15) 1.3 (20) Underlying EBITDA Swaps Depreciation Impairment Net finance cost Underlying profit before tax New business and contract set up costs Transaction costs and litigation and claims Amortisation (non-cash) Accelerated LSA investment Tax Loss for the period 15 INTRODUCTION AVIATION ENERGY RAIL & CIVILS INFRASTRUCTURE INVESTMENTS FINANCIAL REVIEW GROUP SUMMARY

16 Balance sheet m 31 Aug Feb 2018 Intangible assets Tangible assets Investment and non-current receivables Current assets (excluding cash) Cash and restricted cash Gross assets Loans and borrowings (105.0) (79.7) Other liabilities (153.6) (168.6) Net assets Net debt Gearing 21.6% 9.0% Net debt / non-current assets 12.4% 5.6% Summary Revolving credit facility amended and extended 80m to 2022 Effect of IFRS16 leases will be to add assets and debt of around 190m including aircraft leases of around 115m Intangibles includes brands 44m and goodwill 58m Tangible assets - airports, aircraft, plant, trucks and trailers Investments - ESL shares and property and JVs and associates 16 INTRODUCTION AVIATION ENERGY RAIL & CIVILS INFRASTRUCTURE INVESTMENTS FINANCIAL REVIEW GROUP SUMMARY

17 Cash flow analysis 31 Aug Aug Feb 2018 m 6 months 6 months Year Profit before tax (18.8) Add back: Working capital movement and tax (5.4) (1.0) 10.4 Non-cash adjusting items 6.1 (117.6) (120.3) Cash flow from operating activities (18.1) (7.0) (9.3) Purchase of PPE and property inventories (11.7) (53.2) (79.2) Other cash flow from investing activities Dividend paid (31.3) (26.4) (58.1) Other cash flow from financing activities 11.4 (127.0) (100.9) (Decrease)/increase in cash (13.7) Cash at the beginning of the year Cash at the end of the year Summary Profit before tax includes the 18m accelerated investment in LSA Cash proceeds of 29m from disposal of non-operating assets Total cash returned to shareholders of 34.7m, dividends and buybacks Capital expenditure 20m 17 INTRODUCTION AVIATION ENERGY RAIL & CIVILS INFRASTRUCTURE INVESTMENTS FINANCIAL REVIEW GROUP SUMMARY

18 Net Debt movement Net Debt m At 28 February Dividend paid on ordinary shares 31.3 Treasury share repurchases 3.4 Widnes sale and leaseback proceeds (25.3) Aircraft security deposits received (7.0) Solway proceeds (2.1) Other sale of PPE (1.8) Investment in accelerated growth at LSA 14.9 Operating cash from continuing operations 3.4 Capital expenditure 20.6 Net interest paid 1.3 Movement in maintenance reserve 0.3 Summary Capital review 12.4% net debt/total assets Gearing of 21.6% At 31 August INTRODUCTION AVIATION ENERGY RAIL & CIVILS INFRASTRUCTURE INVESTMENTS FINANCIAL REVIEW GROUP SUMMARY

19 Summary LSA taking off easyjet based fourth plane at LSA and expect to welcome 1m passengers in 2018 Ryanair basing three planes and expect 1m passengers from summer 2019 Confident of welcoming 2.5m passengers in 2019 and on track for 5m passengers in 2022 Enhancing customer proposition to deliver increased EBITDA per passenger Energy well placed Investment in best in class infrastructure Larger plants open for longer in the period Expect further progress in H2 and confident infrastructure in place to ensure rapid growth as plants operate consistently Strengthened commercial management and governance Strengthened Board Appointed Interim Chief Financial Officer Selected leading independent search firm 19 INTRODUCTION AVIATION ENERGY RAIL & CIVILS INFRASTRUCTURE INVESTMENTS FINANCIAL REVIEW GROUP SUMMARY

20 Appendix: How are we progressing? Stobart Aviation 1,200 Stobart Energy 1,200 1,100 1,100 1,000 1,000 Passenger numbers (thousands) Tonnes (thousands) Year Year 20 INTRODUCTION AVIATION ENERGY RAIL & CIVILS INFRASTRUCTURE INVESTMENTS FINANCIAL REVIEW GROUP SUMMARY

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