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RNS
Stobart Group Limited  -  STOB   

Final Results

Released 07:00 11-May-2017

RNS Number : 8013E
Stobart Group Limited
11 May 2017
 

11 May 2017

Stobart Group Limited

("Stobart Group", "Stobart" or the "Group")

 

Results for the year ended 28 February 2017

 

Stobart Group Limited, the support services and infrastructure group, today announces its results for the year ended 28 February 2017.

 

Introduction

·         All divisions have made good progress towards their stated objectives during the year and Stobart continues to demonstrate strong value creation across the business

·         Post year-end IPO of Eddie Stobart Logistics plc valued the Group's 49% investment at £184.8m, significantly ahead of the year-end carrying value of £58.4m and realised cash of £113.3m

·         50% increase in dividends with a proposed final dividend of 4.5p per share (18.0p per share annualised), payable in July 2017, with further progressive quarterly dividends from this newly established level

·         Andrew Tinkler, CEO is to focus on further value creation for shareholders through a new structure, Stobart Capital, handing over the CEO role to Warwick Brady, following the AGM, to deliver on and develop the existing business strategic plan

Financial Highlights

 

 

28 February 2017

£m

29 February 2016

£m

Growth

 

 

 

 

 

Revenue from continuing operations

 

129.4

126.7

+2.1%

Underlying EBITDA1

 

35.0

30.0

+16.8%

Underlying PBT1

 

27.4

18.4

+48.9%

 

 

 

 

 

Underlying basic EPS2

 

8.04p

4.95p

+62.4%

 

·         Underlying profit before tax1 up by 48.9% to £27.4m

·         Underlying basic EPS2 increased by 62.4% to 8.04p

·         Statutory loss before tax of £8.0m (2016: £10m profit), after deduction of non-underlying items of £35.4m including a non-cash impairment of goodwill/credit for business purchase of £21.6m

·         Post year-end sale and leaseback of eight ATR 72-600 aircraft for net proceeds of £46.4m

Operational Highlights

 

·         Energy: Widnes and Tilbury processing sites commenced operations, and Widnes biomass power plant close to completing four month commissioning period

·         Aviation: Established 11 new routes from London Southend Airport under the Flybe brand, operated by Stobart Air, delivering up to 300,000 additional passengers by 2018; acquisition of regional airline and aircraft leasing company

·         Rail: Successful delivery of Gospel Oak to Barking railway electrification scheme on programme and under budget

·         Infrastructure: Significant value added and realised at Speke and other sites generating net cash proceeds of £52.7m (2016: 24.1m)

 

1 Underlying EBITDA and Underlying PBT are before non-underlying items. See Financial Review for reconciliation to (loss)/profit before tax.

2 See Financial Review for underlying basic EPS.

 

Outlook

 

Already in the new financial year we have completed the partial disposal of the Group's investment in Eddie Stobart Logistics plc, generating cash and a significant profit for the Group and demonstrating the ability of the Group's management team to continue to create value for shareholders.

 

We are confident that the year ahead will see further progress towards the clear objectives for each of the Group's three growth operating divisions of Energy, Aviation and Rail and further value creating realisations from our Infrastructure and Investments assets.

 

Chief Executive Andrew Tinkler, commented:

 

"This year we have delivered improved underlying profitability across the Group and put in place the foundations, management and organisational structure to achieve our objectives.

 

We are on track to deliver our strategy by 2018 and drive shareholder value through our three growth operating divisions, whilst generating cash through the exit of our infrastructure and investment portfolios at the right time, allowing increasing returns to shareholders."

 

Results Presentation

 

A presentation for analysts and investors will be held today at 9.30am at The Andaz Hotel, 40 Liverpool Street, London, attendance is by invitation only.

 

Enquiries:

 

Stobart Group

c/o Redleaf Communications

Andrew Tinkler, Chief Executive Officer

 

 

Redleaf Communications

+44 20 7382 4730

Charlie Geller

Elise Palmer

Sam Modlin

Stobart@redleafpr.com

 

 

Influence Associates

+44 20 7287 9610

Stuart Dyble

James Andrew

 

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

 

Notes to Editor:

 

Stobart is an entrepreneurial support services and infrastructure business deriving income from energy, aviation, civil engineering and investments.  The Group has a strong heritage in logistics, systems and a customer focus that continues to support all of our divisions.  The Group's strategy is to drive growth and profitability in its core Energy, Aviation and Rail Divisions whilst realising value for shareholders from its Infrastructure and Investments Divisions.

                                                                                                                                                                                               

 

 

Chief Executive's Statement

 

I have been CEO of Stobart Group for almost 10 years and during that time we have generated a compound shareholder return of around 10% p.a. We have also developed Energy and Aviation platforms to deliver our targets to 2018 and beyond. The Group is now uniquely placed as an entrepreneurial public limited company that creates value, supported by its strong heritage in logistics and systems and with a real focus on delivering great customer service. With a market capitalisation of close to £800m, a strong balance sheet and a progressive dividend policy, the Group is well placed to continue to deliver strong returns to shareholders for the foreseeable future.

 

Where are we today?

Stobart Group now comprises three core operating divisions in sectors with real growth opportunities. Our Energy, Aviation and Rail civil engineering businesses are all well placed for profitable growth over the next five years. Our Infrastructure and Investments divisions continue their programme of divestment, creating further value for shareholders.

 

Energy - this year has been about establishing the foundations of infrastructure, logistics and people to ensure our ability to deliver on our long-term fuel supply contracts into over 20 biomass plants around the UK. Widnes and Tilbury storage processing sites are now up and running and those plants are progressing towards commissioning. Development of other processing sites at Port Clarence and Rotherham is also underway. A full management team is now in place, focused on professionalising the industry to deliver long-term sustainable supply and management of predominantly recycled wood under long-term index-linked contracts.

 

Aviation - a significant year for the Aviation division with continued development of our airport, London Southend, which we believe will play a key part in providing capacity for the constrained London air travel market. A London airport that has technical capacity to handle 10m+ passengers, 45 minutes from London, will over time be a very valuable asset for the Group. We have consolidated our regional airline and aircraft leasing businesses, taking full ownership, and will continue to develop our valuable long-term franchise with Aer Lingus as well as support Flybe in the Isle of Man and from our London Southend Airport.

 

Rail - our Rail business continues to support speciality work for Network Rail as well as being a tier 2 supplier to the industry. We expect to see continued growth under the Stobart brand. The non-rail business has also supported infrastructure projects in our Energy and Aviation divisions by providing an efficient low-cost value engineering construction solution.

 

Infrastructure - our plan to divest non-core infrastructure assets continues and we have delivered against our plan this year. The business is also very good at providing asset management initiatives working alongside our Rail division, and delivering on-time and to budget.

 

Investments - the post year-end IPO of Eddie Stobart Logistics plc valued the Group's 49% investment at £184.8m, significantly ahead of the year-end carrying value of £58.4m and realised cash of £113.3m.  This is a great example of how we have created significant value for the Group and our shareholders.

 

People

One of my personal business beliefs is to employ people that are better than yourself and I see this as a strength from a shareholder perspective as well as CEO.

 

Working together with our new Group CEO, Warwick Brady, whom I have known for several years and worked closely alongside for the last six months, I believe that we can bring extensive value to the Group. I am strongly of the view that Warwick's industry-wide knowledge and experience will help grow and support the entire Group. I am confident that his business experience and entrepreneurial approach will be a key part in the next chapter of Stobart Group's value creation.

 

Energy - headed by Ben Whawell, CEO Stobart Energy and the ex-Group CFO. We have worked together for the last 17 years and I am confident that he has the skills and experience to move the Energy business to the next level and create significant shareholder value.

 

Aviation - this division includes airports, a regional airline and an aircraft leasing company. These businesses all have potential and are supported by our proven logistics expertise. The teams within this division, led by Glyn Jones, will support Warwick in delivery of our objectives.

 

Rail - Managing Director Kirk Taylor, of our Rail and non-rail civil engineering business, has worked with me since 1994. He is diligent and passionate about our business and can grow Rail to be the number one specialist provider to the rail and construction industry, as well as supporting the Group in any value-adding infrastructure projects.

 

Whilst I am handing over the reins to lead and run Stobart Group to Warwick, Ben, Glyn and Kirk, as the third largest shareholder, I believe that we are now on the next stage of our journey that will realise the significant potential of the Group over the coming years.

 

As a key founder of Stobart Group, I am committed to remaining on the Board for the foreseeable future and to supporting Warwick's transition to Group CEO. I will support the Executive Management team and the Board by devoting 50% of my time to the Group and the delivery of further significant shareholder value.

 

The remainder of my time will be spent working with Richard Butcher to deliver value in our Infrastructure and Investments divisions and, in particular in launching and developing Stobart Capital, bringing together the Group's investment activities under a new value creation unit. This will be a platform, working alongside external professionals and exploiting my entrepreneurial skills and experience, to bring investment opportunities to the Group that complement the strategy, and have the potential to create further returns for shareholders.

 

I would like to thank Richard for his valued contribution to the business over many years and also thank Mark for his work as interim CFO over recent months.

 

Andrew Tinkler

 

 

Deputy Chief Executive's Statement

 

I am delighted to join Stobart Group at an exciting time when the foundations in Energy, Aviation and Rail are ripe for further development and growth.

 

I have worked with the Group since 2009 during the early stages of developing London Southend Airport when I was Chief Operating Officer at easyJet. My experience working with this entrepreneurial team gave me insights into the value being created. This sparked my interest and led me to follow the Group's progress over recent years.

Over the years, I have forged a good working relationship with Andrew Tinkler and once I left easyJet in September 2016, I spent three months working very closely with Andrew and the Stobart Group Board to understand the value of the Group but moreover, to see if I could use my international experience from my early days in Private Equity, through to my extensive aviation experience in Europe, to support and lead the next chapter for the Stobart Group.

 

I am particularly impressed by how the Group applies its heritage in logistics and distribution across all the divisions as well as how it embraces the customer service ethos. When combined with being very entrepreneurial, culturally the Group fits with my ambitions. I expect to use the foundations in Energy, Aviation and Rail to continue creating value for shareholders over the long-term.

 

Over the last six months I have very much enjoyed working with the Board and Andrew but moreover believe there is a lot of unlocked value and growth potential across our core divisions that has yet to be realised. Whilst the foundations have been laid in each division, with investment and a clear strategic direction, the business can continue to grow. The Group has all the resources available to support accelerated growth and then over time the operating businesses will underpin the value creation for our shareholders.

 

Energy Business

Having now toured several of the Group's processing sites and plants, as well as spending time working with Ben and the team, I can see that this business is all about logistics and distribution so fits very well with the core expertise of the Group. With several of the large energy plants coming on stream over the next 12 months, there will inevitably be a few challenges but I am confident that the team will deliver on the overall targets. I expect we will deliver 60% of the market's fuel supply into biomass plants and this will underpin the financial returns for the next 20 years or so. I also see opportunities to grow the business through operating and managing the energy plants and extending into other forms of fuel that can leverage our current specialist transport and logistics operation.

 

Aviation

Airport - The key to the value creation is our London airport becoming part of the answer to London's travel growth within the airport systems. The on-going London airport capacity constraints will mean our London airport, with its great train links 45 minutes from London, will be an opportunity for the Capital's travel market to grow. London Southend Airport is London's best airport and the infrastructure can support 10m+ passengers per year. The other differentiator is that Stobart Group provides all the services across the airport from operating the railway station, owning and operating our 4* hotel under the Holiday Inn brand, our food and beverage outlets, car parking and solar farm. These all create additional value for the Group and will be an important part of further developing London's best airport.

 

There is also a lot of space to develop our property assets at the airport which could be used for maintenance and other businesses. It is truly remarkable that we will be able to create a London airport capable of delivering 10m+ passengers per year for under £200m, so the capital efficiency is impressive.

 

Airline and Aircraft Leasing - Our regional airline, Stobart Air, based in Dublin, operates under a valuable long-term franchise with Aer Lingus which we believe will be an important support for IAG's focus on growing its transatlantic traffic through the Dublin hub. Stobart Air also operates for Flybe and, in the future, will operate regional jets under the Flybe brand to support the growth of our London airport. Our

aircraft leasing business, Propius, supports Stobart Air and together they will be developed to create more value for the Group. From my perspective, the UK and Europe's regional airline market would benefit from some type of consolidation to ensure the capacity supports profitable regional connectivity.

 

Ground Handling and Support Services - The Group already provides ground handling services and given its expertise in logistics, distribution and customer services, we plan to grow this business in the UK and Europe.

 

Stobart Exec Jet Centre - With c.100,000 private jet movements into the London market per year, our Exec Jet Centre is well placed to offer a great service by connecting product into London. With a clear plan to grow this business, we believe over time it will become a key part of London's executive aviation offering. The Group is well set-up for growing these small but established businesses and capitalising on the current opportunities in the market.

 

Rail

Our Stobart Rail team is highly regarded in the Industry and provides valuable tier 2 specialist services to Network Rail and its tier 1 partners. Its real competitive advantage is the team's innovative approach to developing equipment, systems and people to deliver significant value to the customer. Stobart Rail is renowned for operating strongly under critical time constraints and delivering quality work on time and to budget.

 

On the non-rail side, the team are specialists in building distribution centres, airports, racecourses etc. Together with an innovative approach, design capability, planning and low cost execution, they provide value engineering across the Group. They have supported the Group by building processing sites for Stobart Energy as well as providing specialist infrastructure projects at the airport including taxiways, runway works etc. This provides the Group with a real competitive advantage by being able to deliver infrastructure at competitive costs.

 

Overall, after a lot of due diligence and time spent within Stobart Group, I see an opportunity to use the foundations to grow the Group over the next few years. We will aim to remain a very entrepreneurial team with Andrew Tinkler supporting as an Executive Director to ensure we do not lose our "founders mentality" of creating value and operating in an agile way. This will ensure that we continue to grow the business to deliver sustainable and progressive returns for shareholders for years to come.

 

Warwick Brady

 

Financial Review

 

We are pleased to report improved underlying profitability, across the majority of our divisions, and further progress towards delivering against our medium-term financial objectives.

 

Revenue

2017

2016

 

 

£'m

£'m

Growth

Energy

67.7

73.4

-7.8 %

Aviation

28.1

22.9

+22.8%

Rail

48.1

46.2

+4.2%

Investments

-

-

-

Infrastructure

6.0

4.3

+39.8%

Eliminations

(20.5)

(20.1)

+2.2%

 

129.4

126.7

+2.1%


Revenue from continuing operations has grown by 2.1% to £129.4m driven by increased revenue in our Aviation division, following the acquisition of the airline, Stobart Air. External revenue in our Rail division also increased by 6.1% to £30.5m.

 

Profitability

2017

2016

 

 

£'m

£'m

Growth

Underlying EBITDA1

 

 

 

Energy

10.2

9.1

+12.7%

Aviation

0.1

3.6

-97.1%

Rail

3.9

3.4

+15.5%

Investments

9.4

9.8

-4.1%

Infrastructure

18.9

10.5

+81.0%

Central function and eliminations

(7.5)

(6.4)

-18.1%

Underlying EBITDA

35.0

30.0

+16.8%

Impact of fuel swaps

1.4

(2.2)

 

Depreciation

(9.4)

(8.4)

 

Finance costs (net)

0.4

(1.0)

 

Underlying profit before tax

27.4

18.4

+48.9%

Non-underlying items

(35.4)

(8.4)

 

(Loss)/profit before tax

(8.0)

10.0

 

Tax

(1.2)

(1.2)

 

(Loss)/profit for the year

(9.2)

8.8

 

 

1 Underlying EBITDA represents (loss)/profit before tax and before fuel swaps, interest, depreciation, amortisation and non-underlying items.

 

Underlying EBITDA

 

Underlying Group EBITDA is our key measure of profitability for the business and has grown by 16.8% to £35.0m. The Energy division has improved underlying profitability in spite of a decline in revenue following a customer entering administration. Infrastructure profitability increased by £8.4m, following the successful disposal of our Speke site. The Aviation division made two acquisitions during the latter part of the year, which had an adverse impact on profitability due to the seasonal nature of the airline industry.

 

Central function costs and eliminations have increased by 18.1% partially due to an increase in the share-based payment charge and professional fees.

 

 

 

 

Depreciation

 

Depreciation has increased by 11.2% to £9.3m, due to investment in processing sites and equipment within the Energy division.

 

Finance Costs

 

Finance costs (net) increased from £1.0m cost to £0.4m income, with a higher level of interest received on loans to associates and joint ventures.

 

Non-Underlying Items

2017

2016

 

£'m

£'m

Amortisation of brand

3.9

3.9

Transaction costs/restructuring cost

2.1

0.4

Contract set up costs

3.0

1.2

Bad debt write-off

1.9

-

Impairment of goodwill/credit for business purchase

21.7

-

Share of post-tax profits of associates and JVs:

 

 

Amortisation of contracts

2.8

2.9

 

35.4

8.4

 

The charges in relation to the non-cash amortisation of the brands and contracts are expected to continue in future periods. We incurred £3.0m of contract set-up costs in the Energy division. £1.0m of these costs were incurred in prior periods and there were other excess costs in connection with delayed commissioning of biomass plants. The bad debt write-off relates to a customer that entered administration in the Energy division. Transaction costs and the impairment of goodwill relate to the acquisitions and aborted transactions in the Aviation division.

 

Taxation

 

The tax charge of £1.2m (2016: £1.2m) reflects a negative effective tax rate of 14.4% (2016: 12.0% positive). The effective rate is lower than the standard rate of 20.0% mainly due to the write-off of goodwill and income in respect of the Group's post-tax share of joint venture results being treated as non-taxable, and the effect of the change in corporate tax rate on deferred tax balances.

 

Business Segments

 

The business segments reported in the financial statements are unchanged from those reported in the prior year. The segments are Energy, Aviation, Rail, Infrastructure and Investments, representing the operational and reporting structure of the Group. The results of our aircraft leasing business, Propius, have transferred from Investments to Aviation following its acquisition, and the prior year's figures have been restated.

 

Earnings per Share

 

Earnings per share from underlying continuing operations were 8.0p (2016: 5.0p). Total basic earnings per share were 2.7p loss (2016: 2.7p profit).

 

Dividends and Share Disposals

2017

2016

 

 

 

Interim per share

9.0p

2.0p

Final per share

4.5p

4.0p

Total per share

13.5p

6.0p


The Board has proposed a final dividend of 4.5p per share which, subject to the approval of shareholders at the AGM, will be payable to investors on the record date of 16 June 2017, with an ex-dividend date of 15 June 2017, and will be paid on 7 July 2017.

 

During the year, the Group sold 10.1m of its treasury shares for a net amount of £15.0m to fund the Propius acquisition. At the year end, there were no shares held in treasury.

 

Balance Sheet

2017

2016

 

£'m

£'m

Non-current assets

510.4

453.3

Current assets

155.5

109.3

Non-current liabilities

(189.6)

(94.4)

Current liabilities

(88.8)

(54.5)

Net assets

387.5

413.7


The net asset position has decreased by £26.2m in the year to £387.5m at 28 February 2017, mainly due to the non-cash write-off of goodwill arising on the acquisition of Everdeal Holdings Limited.

 

Non-Current Assets

 

Property, plant and equipment of £326.3m (2016: £218.0m) has increased following the acquisition of Propius and assets acquired for the new biomass processing sites. The net book value of the eight aircraft owned by Propius at the year-end was £100.7m.

 

During the year £14.5m (2016: £49.1m) of asset investment has been made, comprising the cash purchases of property, plant and equipment and net advances to biomass plant investments.

 

Investment in associates and joint ventures of £59.2m (2016: £62.7m) include the Group's 49% share of the Eddie Stobart Logistics business. The reduction is due to Propius Holdings Limited being classified as a subsidiary at the year end, following its acquisition. Investment property of £3.2m (2016: £47.0m) represents the holding of one (2016: four) property.

 

Amounts owed by associates and joint ventures of £13.4m (2016: £13.4m) represents interest-bearing loans to renewable energy plant investments in which we also hold equity interests.

 

Intangible assets of £108.4m (2016: £112.3m) include the Stobart and Eddie Stobart brands and goodwill, which principally relates to the Energy division.

 

Current Assets and Current Liabilities

 

Current assets include £60.0m (2016: £44.4m) of development land assets. Excluding these assets, the net current assets at year-end total £6.7m (2016: £10.3m).

 

Debt and Gearing

 

 

2017

2016

 

 

 

Net debt - asset backed finance

£109.5m

£31.4m

                 - other

£11.2m

£16.6m

Underlying EBITDA/underlying interest

92.5

31.2

Gearing

31.1%

11.6%

Operating lease commitments as lessee

£45.8m

£48.0m

Operating lease rentals receivable as lessor

£53.9m

£41.5m

 

 

The Group acquired aircraft related debt of £70.7m following the acquisition of Propius Holdings Limited. The debt at 28 February 2017 was £71.1m which was ringfenced and fully repaid post year end.

 

During the year, the Group increased its variable rate committed revolving credit facility with Lloyds Bank plc from £50.0m to £65.0m until 31 March 2019, when the facility reduces back to £50.0m until the end date of 31 January 2020. At the year end, the Group has drawn £42.2m of the £65.0m facility.

 

Operating lease rentals receivable as lessor increased.

 

Cash Flow

 

 

2017

2016

 

£'m

£'m

Operating cash flow

(1.7)

3.4

Investing activities

40.0

(13.6)

Financing activities

(17.5)

14.3

Increase in the year

20.8

4.1

At beginning of year

9.8

5.7

Cash at end of year

30.6

9.8


Net cash inflow from investing activities included the Speke investment property disposal (£36.9m), acquisition of subsidiary undertakings net of cash acquired (£7.7m) and net proceeds from the disposal of two properties (£15.8m). These inflows were offset by net cash outflows relating to purchase of property, plant and equipment (£14.5m) and the equity investments in associates and joint ventures (£12.5m).

 

Net cash outflow from financing activities included the repayment of borrowing and finance leases (£10.9m) and dividends paid on ordinary shares (£34.7m). These were offset by the net draw down of £15.2m from the Lloyds RCF and net proceeds from the disposal of treasury shares of £15.0m.

 

Economic Outlook

Following the UK's referendum vote to leave the membership of the EU, management continues to monitor the implications for the Group. The Group and its customers are predominantly UK based and though there have been some effects on US dollar denominated costs in the airline, this has been partly offset by the US dollar denominated assets in the leasing company. The Group benefits from diverse assets and sources of income, and its entrepreneurial culture leaves it well placed to respond to future developments and opportunities.

 

Post Balance Sheet Events

In April 2017, the Group entered an arrangement to sell and leaseback eight ATR 72-600 aircraft. The Group received net proceeds of $62.7m (£50.2m) after repayment of existing financing in respect of the aircraft of $85.3m (£68.2m), including refundable deposits withheld of $3.8m (£3.0m) and $1.0m (£0.8m) in rental payments.

 

On 25 April 2017, the Group disposed of its 49% investment in Greenwhitestar Holding Company 1 Limited and Greenwhitestar Finance Limited for consideration comprising cash of £113.3m and a 12.5% shareholding in Eddie Stobart Logistics plc. Eddie Stobart Logistics plc was admitted to AIM on 25 April 2017 and the 12.5% shareholding was valued at £71.5m on admission.

Consolidated Income Statement

For the year ended 28 February 2017

 

 

 

Year ended 28 February 2017

Year ended 29 February 2016

 

Underlying

Non-underlying

Total

Underlying

Non-underlying

Total

 

£'000

£'000

£'000

£'000

£'000

£'000

Continuing operations

 

 

 

 

 

 

Revenue

129,403

-

129,403

126,730

-

126,730

 

 

 

 

 

 

 

Gain in value/profit on disposal of investment properties

14,614

-

14,614

8,441

-

8,441

Profit on disposal of assets held for sale

2,747

-

2,747

259

-

259

Profit on disposal of property, plant and equipment

3,480

-

3,480

183

-

183

Gain/(loss) on fuel swaps

1,354

-

1,354

(2,184)

-

(2,184)

Impairment of goodwill/credit for business purchase

-

(21,646)

(21,646)

-

-

-

Other

(134,355)

(10,892)

(145,247)

(125,227)

(5,547)

(130,774)

Total operating expenses

(112,160)

(32,538)

(144,698)

(118,528)

(5,547)

(124,075)

Share of post-tax profits of associates and joint ventures

9,715

(2,839)

6,876

11,130

(2,835)

8,295

Operating profit/(loss)

26,958

(35,377)

(8,419)

19,332

(8,382)

10,950

 

 

 

 

 

 

 

Finance costs

(2,532)

-

(2,532)

(2,302)

-

(2,302)

Finance income

2,925

-

2,925

1,343

-

1,343

Profit/(loss) before tax

27,351

(35,377)

(8,026)

18,373

(8,382)

9,991

Tax

255

(1,413)

(1,158)

(2,124)

927

(1,197)

Profit/(loss) for the year

27,606

(36,790)

(9,184)

16,249

(7,455)

8,794

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings/(loss) per share expressed in pence per share

Basic

8.04p

 

(2.67)p

4.95p

 

2.68p

Diluted

8.04p

 

(2.67)p

4.94p

 

2.68p

 

 

 

 

 

 

 

 

 

Consolidated Statement of Comprehensive Income

For the year ended 28 February 2017

 

 

 

Year ended 28 February 2017

Year ended 29 February 2016

 

£'000

£'000

 

 

 

(Loss)/profit for the year

(9,184)

8,794

 

 

 

Foreign currency translation differences - equity accounted joint ventures

1,848

1,564

Interest rate swap - equity accounted associates

140

-

Foreign currency translation differences - equity accounted associates

878

(727)

Exchange differences on translation of foreign operations

219

-

Other comprehensive income to be reclassified to profit or loss in subsequent years, net of tax

3,085

837

 

 

 

Remeasurement of defined benefit plan

(3,270)

(681)

Tax on items relating to components of other comprehensive income

556

60

Other comprehensive expense not being reclassified to profit or loss in subsequent years, net of tax

(2,714)

(621)

Other comprehensive income for the year, net of tax

371

216

Total comprehensive (expense)/income for the year

(8,813)

9,010

 

 

 

 

 

Consolidated Statement of Financial Position

As at 28 February 2017

 

 

28 February

 2017

29 February

 2016

 

£'000

£'000

Non-current assets

 

 

Property, plant and equipment

 

 

- Land and buildings

156,458

169,327

- Plant and machinery

49,675

28,246

- Fixtures, fittings and equipment

1,682

705

- Commercial vehicles and aircraft

118,475

19,689

 

326,290

217,967

 

 

 

Investment in associates and joint ventures

59,198

62,699

Investment property

3,150

46,965

Intangible assets

108,358

112,296

Trade and other receivables

13,401

13,401

     

510,397

453,328

Current assets

 

 

Inventories

63,728

45,083

Trade and other receivables

48,066

48,950

Cash and cash equivalents

30,653

9,858

Assets held for sale

13,106

5,354

 

155,553

109,245

 

 

 

Total assets

665,950

562,573

 

 

 

Non-current liabilities

 

 

Loans and borrowings

(133,072)

(48,892)

Defined benefit pension scheme

(5,705)

(2,708)

Other liabilities

(21,600)

(19,786)

Deferred tax

(21,083)

(18,290)

Provisions

(8,176)

(4,699)

 

(189,636)

(94,375)

Current liabilities

 

 

Trade and other payables

(61,487)

(38,239)

Loans and borrowings

(18,287)

(8,958)

Corporation tax

(7,098)

(7,090)

Provisions

(1,908)

(242)

 

(88,780)

(54,529)

 

 

 

Total liabilities

(278,416)

(148,904)

 

 

 

Net assets

387,534

413,669

 

 

 

Capital and reserves

 

 

Issued share capital

35,434

35,434

Share premium

301,326

301,326

Foreign currency exchange reserve

2,766

(179)

Reserve for own shares held by employee benefit trust

(330)

(330)

Retained earnings

48,338

77,418

 

 

 

Group shareholders' equity

387,534

413,669

 

 

 

 

 

 

 

Consolidated Statement of Changes in Equity

For the year ended 28 February 2017

 

 

 

Issued share capital

Share premium

Foreign currency exchange reserve

Reserve for own shares held by EBT

Retained earnings

Total

equity

 

£'000

£'000

£'000

£'000

£'000

£'000

Balance at 1 March 2016

35,434

301,326

(179)

(330)

77,418

413,669

Loss for the year

-

-

-

-

(9,184)

(9,184)

Other comprehensive income/(expense) for the year

-

-

2,945

-

(2,574)

371

Total comprehensive income/(expense) for the year

-

-

2,945

-

(11,758)

(8,813)

Employee benefit trust

-

-

-

-

587

587

Share-based payment credit

-

-

-

-

1,000

1,000

Tax on share-based payment credit

-

-

-

-

857

857

Sale of treasury shares

-

-

-

-

15,042

15,042

Purchase of treasury shares

-

-

-

-

(81)

(81)

Dividends

-

-

-

-

(34,727)

(34,727)

Balance at 28 February 2017

35,434

301,326

2,766

(330)

48,338

387,534

 

 

Consolidated Statement of Changes in Equity

For the year ended 29 February 2016

 

 

 

Issued share capital

Share premium

Foreign currency exchange reserve

Reserve for own shares held by EBT

Retained earnings

Total

equity

 

£'000

£'000

£'000

£'000

£'000

£'000

Balance at 1 March 2015

35,434

301,326

(1,016)

(330)

70,834

406,248

Profit for the year

-

-

-

-

8,794

8,794

Other comprehensive income/(expense) for the year

-

-

837

-

(621)

216

Total comprehensive income/(expense) for the year

9,010

Share-based payment credit

-

-

-

-

648

648

Tax on share-based payment credit

-

-

-

-

79

79

Sale of treasury shares

-

-

-

-

17,360

17,360

Dividends

-

-

-

-

(19,676)

(19,676)

Balance at 29 February 2016

35,434

301,326

(179)

(330)

77,418

413,669

 

 

 

 

Consolidated Statement of Cash Flows

For the year ended 28 February 2017

 

 

Year ended 28 February 2017

Year ended 29 February 2016

 

£'000

£'000

Cash (used in)/generated from continuing  operations

(1,720)

159

Income taxes refunded

-

3,246

Net cash (outflow)/inflow from operating activities

(1,720)

3,405

 

 

 

Purchase of property, plant and equipment and investment property

(14,496)

(45,283)

Proceeds from grants

3,925

-

Proceeds from the sale of property, plant and equipment and investment property

47,063

7,340

Proceeds from disposal of assets held for sale

7,328

7,359

Acquisition of subsidiary undertakings (net of cash acquired and fees)

7,664

-

Proceeds from sale and leaseback (net of fees)

-

16,769

Refundable deposit advanced

(1,618)

-

Distributions from joint ventures

2,926

4,264

Non-underlying transaction costs

(400)

-

Equity investment in associates and joint ventures

(12,455)

-

Net amounts advanced to joint ventures

-

(3,768)

Other loans advanced

-

(300)

Interest received

302

29

Cash inflow from discontinued operations

(235)

-

Net cash inflow/(outflow) from investing activities

40,004

(13,590)

 

 

 

Dividend paid on ordinary shares

(34,727)

(19,676)

Repayment of capital element of finance leases

(10,942)

(8,402)

Net drawdown from revolving credit facility

15,197

26,812

Sale of treasury shares, net of costs

14,961

17,360

Interest paid

(1,978)

(1,767)

Net cash (outflow)/inflow from financing activities

(17,489)

14,327

Increase in cash and cash equivalents

20,795

4,142

Cash and cash equivalents at beginning of year

9,858

5,716

Cash and cash equivalents at end of year

30,653

9,858

 

 

 

 

 

 

Notes to the Consolidated Financial Statements

For the year ended 28 February 2017

 

Accounting Policies of Stobart Group Limited

 

Basis of Preparation and Statement of Compliance

 

The principal accounting policies adopted in the preparation of the financial statements are set out below. The policies have been consistently applied to all the years presented, unless otherwise stated.

 

These Group financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs and IFRIC interpretations) as adopted by the European Union ('adopted IFRSs').

 

The financial statements of the Group are also prepared in accordance with the Companies (Guernsey) Law 2008.

 

Stobart Group Limited is a Guernsey registered company. The Company's ordinary shares are traded on the London Stock Exchange.

 

Going Concern

 

The Group's business activities, together with factors likely to affect its future performance and position, are set out in the Chief Executive's Statement and the financial position of the Group, its cash flows and funding are set out in the Financial Review.

 

The Group has considerable financial resources, together with contracts with a number of customers and suppliers. The financial forecasts show that the Group's remaining borrowing facilities are adequate such that the Group can operate within these facilities and meet its obligations when they fall due for at least 12 months.

 

After making enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the financial statements have been prepared on a going concern basis.

 

Segmental Information

 

The reportable segment structure is determined by the nature of operations and services. The operating segments are Stobart Energy, Stobart Aviation, Stobart Rail, Stobart Investments and Stobart Infrastructure.

 

The Stobart Energy segment specialises in the supply of sustainable biomass for the generation of renewable energy.

 

The Stobart Aviation segment specialises in the operation of commercial airports, airline operations and aircraft leasing.

 

The Stobart Rail segment specialises in delivering internal and external civil engineering development projects including rail network operations.

 

The Stobart Investments segment holds a non-controlling interest in a transport and distribution business.

 

The Stobart Infrastructure segment specialises in management, development and realisation of a portfolio of property assets as well as investments in biomass energy plants.

 

 

The Executive Directors are regarded as the Chief Operating Decision Maker. The Directors monitor the results of each business unit separately for the purposes of making decisions about resource allocation and performance assessment. The main segmental profit measure is underlying EBITDA, which is calculated as profit/(loss) before tax, interest, depreciation, amortisation and before fuel swaps and non-underlying items. The aircraft leasing business joint venture was included in the Investments segment in the prior year's annual report segmental information note. This business became a subsidiary during the year and has been included in the Aviation segment in the segmental analysis in the current year. The prior year figures for the aircraft leasing business, which were included in the Investments segment in the prior year's annual report, have been restated to be consistent. This is considered to better reflect the management of the business.

 

Income taxes, finance costs and certain central costs are managed on a Group basis and are not allocated to operating segments.

 

 

 

Year ended 28 February 2017

 

Energy

Aviation

Rail

Investments

Infrastructure

Adjustments and eliminations

 

Group

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

Revenue

 

 

 

 

 

 

 

External

60,811

27,499

30,527

-

5,532

5,034

129,403

Internal

6,905

599

17,547

-

493

(25,544)

-

Total revenue

67,716

28,098

48,074

-

6,025

(20,510)

129,403

 

 

 

 

 

 

 

 

Underlying EBITDA

10,242

107

3,919

9,378

18,934

(7,598)

34,892

(Loss)/gain on fuel swaps

-

(11)

-

-

-

1,365

1,354

Depreciation

(3,794)

(4,186)

(1,045)

-

(84)

(269)

(9,378)

Interest

8

(533)

(179)

-

1,613

(516)

393

Underlying profit/(loss) before tax

6,456

(4,623)

2,695

9,378

20,463

(7,018)

27,351

New business and new contract set up costs

(2,999)

-

-

-

-

-

(2,999)

Restructuring costs

(83)

-

-

-

-

-

(83)

Transaction costs

-

-

-

-

-

(2,003)

(2,003)

Bad debt write-off

(1,869)

-

-

-

-

-

(1,869)

Amortisation of acquired intangibles

(221)

-

-

-

-

(3,717)

(3,938)

Impairment of goodwill/credit for business purchase

-

-

-

-

-

(21,646)

(21,646)

Non-underlying items included in share of post-tax profits of associates and joint ventures

-

-

-

(2,839)

-

-

(2,839)

Profit/(loss) before tax

1,284

(4,623)

2,695

6,539

20,463

(34,384)

(8,026)

 

 

 

 

Restated

Year ended 29 February 2016

 

Energy

Aviation

Rail

Investments

Infrastructure

Adjustments and eliminations

 

Group

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

Revenue

 

 

 

 

 

 

 

External

66,009

22,864

28,783

-

4,090

4,984

126,730

Internal

7,439

11

17,374

-

219

(25,043)

-

Total revenue

73,448

22,875

46,157

-

4,309

(20,059)

126,730

 

 

 

 

 

 

 

 

Underlying EBITDA

9,085

3,665

3,393

9,780

10,459

(6,431)

29,951

Loss on fuel swaps

-

-

-

-

-

(2,184)

(2,184)

Depreciation

(2,909)

(3,957)

(1,276)

-

(48)

(245)

(8,435)

Interest

(22)

(180)

(216)

-

1,006

(1,547)

(959)

Underlying profit/(loss) before tax

6,154

(472)

1,901

9,780

11,417

(10,407)

18,373

New business and new contract set up costs

-

(1,214)

-

-

-

-

(1,214)

Transaction costs

-

-

-

-

-

(395)

(395)

Amortisation of acquired intangibles

(221)

-

-

-

-

(3,717)

(3,938)

Non-underlying items included in share of post tax profits of associates and joint ventures

-

-

-

(2,835)

-

-

(2,835)

Profit/(loss) before tax

5,933

(1,686)

1,901

6,945

11,417

(14,519)

9,991

 

No segmental assets or liabilities information is disclosed because no such information is regularly provided to, or reviewed by, the Chief Operating Decision Maker.

 

Inter-segment revenues are eliminated on consolidation.  Included in adjustments and eliminations are net central costs of £6,754,000 (2016: £10,257,000) and an intra-group profit of £264,000 (2016: £150,000). There is also external income within adjustments and eliminations which comprises brand licence income, merchandising income and income from other business services.

 

Business Combinations

 

On 24 February 2017, the Group acquired the remaining 33.3% of the ordinary shares in Propius Holdings Limited (Propius). Propius is registered in the Cayman Islands. The principal activity of Propius is aircraft leasing. Together with the existing 66.7% already owned by the Group prior to the acquisition, this gave the Group control over Propius.

 

Control was only deemed to be obtained on 24 February 2017, due to the existence of a previously held shareholder agreement.

 

The primary reason for the acquisition was to give the Group more control over its ability to grow and develop its aviation operations across the UK, Ireland and Europe.

 

The provisional fair values of the identifiable assets and liabilities of Propius as at the date of acquisition are as follows:

 

 

 

 

 

 

 

 

Provisional

fair value

recognised on

acquisition

Book Value

 

£000

£000

 

Property, plant and equipment

Trade and other receivables

Cash and cash equivalents

Loans and borrowings

Trade and other payables

Maintenance deposits

Deferred tax liabilities

Net identifiable assets and liabilities

 

 

41,263

34,464

 

 

 

             

 

 

 

 

 

 

Consideration paid:

 

 

 

 

Cash

Fair value of existing equity interest

Total consideration

 

 

39,912

 

 

             

 

Excess fair value of net assets over consideration

 

 

1,351

 

 

 

             

 

 

The consideration comprised cash of £11,763,000 and the existing owned proportion of the fair value of the net assets at acquisition date of £28,149,000. There was no contingent consideration as defined in IFRS 3 'Business Combinations' in connection with this acquisition. The Group incurred acquisition-related transaction costs of £1,402,000. These costs have been included in non-underlying other operating expenses in the Group's Consolidated Income Statement.

 

Immediately prior to this acquisition, the Group owned 66.7% of Propius which was disclosed as an equity accounted joint venture with a carrying value of £22,771,000.

 

The difference of £5,378,000, between this carrying value of £22,771,000 and the existing owned proportion of the net assets at acquisition date of £28,149,000, has been recognised in the Consolidated Income Statement within impairment of goodwill/credit for business purchase.

 

The excess of fair value of net assets over consideration of £1,351,000 has been taken to the Consolidated Income Statement, and is disclosed within impairment of goodwill/credit for business purchase. Due to fair value adjustments and the transaction being completed at a later date than the price being agreed, net assets exceeded consideration.

 

In the four days to 28 February 2017, the subsidiary contributed net profit of £34,000 to the consolidated loss for the year. If the acquisition had occurred on the first day of the accounting period, Group revenue would have been an estimated £12,152,000 higher before elimination of intra-group trading and net profit would have been an estimated £1,811,000 higher, excluding share of profits already recognised.

 

 

Acquisition of Everdeal Holdings Limited

On 8 February 2017, the Group acquired the remaining 19% of the ordinary shares in Everdeal Holdings Limited (Everdeal). Everdeal is registered in Ireland. The principal activity of Everdeal is the operation of an airline. Eight of the aircraft in the Everdeal fleet are leased from the group headed by Propius Holdings

Limited.

 

Control was only deemed to be obtained on 8 February 2017, due to clauses within the Articles of Association.

 

The primary reason for the acquisition was to give the Group more control over its ability to grow and develop its aviation operations across the UK, Ireland and Europe. Although Everdeal had book value net liabilities of £26.9m on acquisition, the Directors are satisfied that their future actions can have a positive impact on the financial position and performance of this business.

 

The acquisition had the following effect on the Group's assets and liabilities:

 

 

Provisional fair value recognised on

acquisition

Book value

 

£000

£000

 

Property, plant and equipment

Inventory

Trade and other receivables

Cash and cash equivalents

Loans and borrowings

Trade and other payables

Maintenance reserve liability

Deferred tax liabilities

Provisions

Net identifiable assets and liabilities

(27,811)

(26,886)

 

 

 

             

 

 

 

 

 

 

Consideration paid:

Cash

Fair value of existing equity interest

Total consideration

 

 

564

 

 

 

 

 

Goodwill

 

 

28,375

 

 

 

 

 

The consideration comprised cash of £564,000 and the existing owned proportion of the fair value of the net assets at acquisition date of £nil. There was no contingent consideration as defined in IFRS 3 'Business Combinations' in connection with this acquisition. The Group incurred acquisition-related transaction costs of £200,000. These costs have been included in non-underlying other operating expenses in the Group's Consolidated Income Statement.

 

Immediately prior to this acquisition, the Group owned 81% of Everdeal which was disclosed as an equity accounted associate with a carrying value of £nil. There was no resulting gain or loss taken to the income statement following remeasurement of this investment.

 

In the 20 days to 28 February 2017, the subsidiary contributed a net loss of £1,064,000 to the consolidated loss for the year. If the acquisition had occurred on the first day of the accounting period, Group revenue would have been an estimated £111,364,000 higher and net profit would have been an estimated £1,177,000 higher.

Following an impairment review, during which the future forecasts of the business were reviewed, the goodwill arising on acquisition was written off in full in the Consolidated Income Statement and disclosed within impairment of goodwill/credit for business purchase.

 

 

Non-Underlying Items

 

Non-underlying items included in the Consolidated Income Statement comprise the following:

 

Operating expenses

2017

2016

 

£'000

£'000

New business and new contract set up costs

2,999

1,214

Transaction costs

2,003

395

Restructuring costs

83

-

Bad debt write-off

1,869

-

Amortisation of acquired intangibles

3,938

3,938

Impairment of goodwill/credit for business purchase

21,646

-

 

32,538

5,547

 

 

 

 

 

 

Share of post-tax profits of associates and joint ventures

2017

2016

 

£'000

£'000

Amortisation of acquired intangibles

2,839

2,835

 

2,839

2,835

 

New business and new contract set up costs comprise costs of investing in major new business areas or major new contracts to commence or accelerate development of our business presence. The costs in the current year were in relation to the development of the Energy business, principally pre-contract costs and excess costs incurred due to delays in customer plants becoming operational.

 

Transaction costs comprise costs of making investments or costs of financing transactions that are not permitted to be debited to the cost of investment or as issue costs. These costs include costs of any aborted transactions.

 

Restructuring costs comprise costs of integration plans and other business reorganisation and restructuring undertaken by management. Costs include cost rationalisation, site closure costs, certain short-term duplicated costs and other costs related to the reorganisation and integration of businesses. These are principally expected to be one-off in nature.

 

The bad debt write-off relates to a significant receivable, written off due to the customer entering administration.

 

Amortisation of acquired intangibles comprises the amortisation of intangible assets including those identified as fair value adjustments in acquisition accounting. The charge in the year is principally in connection with amortisation of the brand assets.

 

 

Impairment of goodwill/credit for business purchase comprises the following:

 

 

2017

2016

 

£'000

£'000

Everdeal goodwill

28,375

-

Propius credit for business purchase

(1,351)

-

Revaluation gain on equity accounted investment in Propius

(5,378)

-

 

21,646

-

 

Non-underlying items included in the share of post-tax profits of associates and joint ventures all relate to the investment in Greenwhitestar Holding Company 1 Limited. Amortisation of acquired intangibles includes amortisation of the customer relationships.

 

Dividends

 

Dividends paid on ordinary shares

2017

2017

2016

2016

 

Rate

 

Rate

 

 

p

£'000

p

£'000

Interim dividend paid 20 January 2017

3.0

10,630

-

-

Interim dividend paid 7 October 2016

3.0

10,327

-

-

Final dividend for 2016 paid 8 July 2016

4.0

13,770

-

-

Interim dividend paid 4 December 2015

-

-

2.0

6,559

Final dividend for 2015 paid 3 July 2015

-

-

4.0

13,117

 

10.0

34,727

6.0

19,676

 

An interim dividend of 3.0p per share totalling £10,630,000 was paid on 7 April 2017. A final dividend of 4.5p per share totalling £15,945,000 was declared on 11 May 2017 and subject to shareholder approval will be paid on 7 July 2017. Neither of these dividends are recognised as a liability as at 28 February 2017.


Financial Assets and Liabilities

 

Loans and borrowings

2017

2016

 

£'000

£'000

Non-current

 

 

Fixed rate:

 

 

-      Obligations under finance leases and hire purchase contracts

7,847

6,608

-      Bank loans

64,269

-

Variable rate:

 

 

-      Obligations under finance leases and hire purchase contracts

19,252

15,902

-      Bank loans

41,704

26,382

 

133,072

48,892

Current

 

 

Fixed rate:

 

 

-      Obligations under finance leases and hire purchase contracts

1,401

2,295

-      Bank loans

6,975

-

Variable rate:

 

 

-      Obligations under finance leases and hire purchase contracts

9,911

6,663

 

18,287

8,958

 

 

 

Total loans and borrowings

151,359

57,850

Cash

30,653

9,858

Net debt

120,706

47,992

                                                                                                                                                                                               

The obligations under finance leases and hire purchase contracts are taken out with various lenders at fixed or variable interest rates prevailing at the inception of the contracts.

 

During the year, the £50,000,000 variable rate committed revolving credit facility with a facility end date of January 2019 was amended to £65,000,000 and extended to an end date of January 2020. This facility was drawn at £42,200,000 (2016: £27,000,000) at the year end.

 

The Group was in compliance with financial covenants throughout both the current and prior year.

 

 

Note to the Consolidated Cash Flow Statement

 

 

Year ended 28 February 2017

Year ended 29 February 2016

 

£'000

£'000

 

 

 

(Loss)/profit before tax

(8,026)

9,991

 

 

 

Adjustments to reconcile (loss)/profit before tax to net cash flows:

 

 

 

 

 

Non-cash:

 

 

Gain in value of investment properties

(2,898)

(8,441)

Realised profit on sale of property, plant and equipment and investment properties

(15,196)

(183)

Share of post-tax profits of associates and joint ventures accounted for using the equity method

(6,876)

(8,295)

(Profit)/loss on disposal of/loss in value of assets held for sale

(2,747)

16

Profit on sale and leaseback

-

(1,893)

Release of deferred profit on sale and leaseback

(772)

-

Depreciation of property, plant and equipment

9,378

8,435

Finance income

(2,925)

(1,343)

Finance costs

2,532

2,302

Release of grant income

(313)

(302)

Release of deferred premiums

(3,045)

-

Impairment of goodwill/credit for business purchase

21,646

-

Amortisation of intangibles

3,938

3,938

Charge for share based payments

1,000

648

(Gain)/loss on fuel swaps mark to market valuation

(1,820)

1,497

 

 

 

Working capital adjustments:

 

 

Decrease in inventories

215

1,535

Decrease/(increase) in trade and other receivables

5,767

(3,747)

Decrease in trade and other payables

(1,578)

(3,999)

 

 

 

Cash (used)/generated from continuing operations

(1,720)

159

 

Related Parties

 

Relationships of Common Control or Significant Influence

 

WA Developments International Limited is owned by W A Tinkler. During the year, the Group made purchases of £344,000 (2016: £nil) relating to the provision of passenger transport and the Group levied recharges of £38,000 (2016: £41,000) relating to the recovery of staff costs and expenses to WA Developments International Limited. £nil (2016: £nil) was due from and £nil (2016: £nil) was due to WA Developments International Limited at the year end.

 

Apollo Air Services Limited is owned by W A Tinkler. During the year, the Group made purchases of £388,000 (2016: £525,000) relating to the provision of passenger transport and sales of £35,000 (2016: £19,000) relating to fuel to Apollo Air Services Limited. £nil (2016: £nil) was owed by the Group and £7,000 (2016: £nil) was owed to the Group by this company at the year end.

 

During the year, the Group made purchases of £2,000 (2016: £4,000) and sales of £9,000 (2016: £54,000) to WA Tinkler Racing, a business owned by W A Tinkler, relating to car hire. £2,000 (2016: £nil) was owed to the Group and £nil (2016: £nil) was owed by the Group at the year end.

 

During the year, a number of close family members of W A Tinkler were employed by the Group. The total emoluments of those close family members, including benefits provided as part of their employment, amounted to £33,000 (2016: £53,000).

 

Associates and Joint Ventures

 

The Group headed by Greenwhitestar Holding Company 1 Limited, which owns Eddie Stobart Logistics Limited, is an associate undertaking. During the year, the Group made sales of £4,138,000 (2016: £11,962,000), mainly relating to cost recharges (see below), and purchases of £1,006,000 (2016: £5,160,000), mainly relating to haulage costs and cost recharges (see below). A balance of £156,000 (2016: £475,000) was owed by the Group and £741,000 (2016: £684,000) was owed to the Group at the year end. These balances are shown within current trade and other receivables/payables. The Group has guaranteed certain obligations under leases for properties operated by Eddie Stobart Logistics.

 

Significant examples of cost recharges are time apportioned staff costs, truck and trailer hire costs, property leases, office space rental charges, fuel and car costs, IT hardware and software costs and payroll processing costs.

 

On 8 February 2017, the Group acquired a controlling interest in Everdeal Holdings Limited which was previously classified as a joint venture. Prior to acquisition, the Group had loans, not part of the net investment, outstanding from companies within the group headed by Everdeal Holdings Limited, with a book value of £6,538,000 (2016: £6,538,000). The loans were unsecured and due for repayment within one year. Prior to acquisition, the Group made sales of £693,000 (2016: £nil) to the Group headed by Everdeal Holdings Limited, mainly relating to the provision of aircraft, fuel and landing charges, and purchases of £75,000 (2016: £nil).

 

The Group had loans, not part of the net investment, outstanding from its associate interest, Shuban Power Limited, of £5,250,000 (2016: £5,250,000) at the year end, disclosed within trade and other receivables in non-current assets. The interest outstanding at the year end was £1,475,000 (2016: £1,055,000) and is disclosed within trade and other receivables. The loans are unsecured, will be settled in cash and have no fixed repayment date.

 

The Group had loans, not part of the net investment, outstanding from its associate interest, Shuban 6 Limited, of £849,000 (2016: £849,000) at the year end, disclosed within trade and other receivables in non-current assets. The interest outstanding at the year end was £112,000 (2016: £45,000) and is disclosed within trade and other receivables. The loans are unsecured, will be settled in cash and have no fixed repayment date.

 

The Group had loans, not part of the net investment, outstanding from its associate interest, Mersey Bioenergy Holdings Limited, of £7,302,000 (2016: £7,302,000) at the year end. This balance is disclosed within trade and other receivables in non-current assets. The interest outstanding at the year end was £1,967,000 (2016: £838,000) and is disclosed within trade and other receivables. The loans are unsecured, have a ten-year term ending in November 2024 and will be settled in cash.

 

There were no other balances between the Group and its joint ventures and associates during the current or prior year.

 

All loans are unsecured and all sales and purchases are settled in cash on the Group's standard commercial terms.

 

Post Balance Sheet Events

 

In April 2017, the Group entered an arrangement to sell and leaseback eight ATR 72-600 aircraft. The Group received net proceeds of $62.7m (£50.2m) after repayment of existing financing in respect of the aircraft of $85.3m, including refundable deposits withheld of $3.8m (£3.0m) and $1.0m (£0.8m) in rental payments. The leases are for a ten-year term with an option to terminate after six years. Aggregate payments under the leases will amount to $15.4m (£12.3m) per annum. The Group will continue to operate all eight aircraft within its airline, primarily providing flights under the Aer Lingus franchise agreement.

 

On 25 April 2017, the Group disposed of its 49% investments in Greenwhitestar Holding Company 1 Limited and Greenwhitestar Finance Limited for consideration comprising cash of £113.3m and a 12.5% shareholding in Eddie Stobart Logistics plc. Eddie Stobart Logistics plc was admitted to AIM on 25 April 2017 and the 12.5% shareholding was valued at £71.5m on admission.

 

There were no other events after the reporting period that are material for disclosure in the financial statements.

 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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