Stobart Group has plunged to a £42.6 million annual loss after it was impacted by rising aviation costs and depreciation.

The transport firm fell to the pre-tax loss for the year to March 2019, from a £14.3 million loss the previous year, as it moved ahead with transformation plans.

The group, which will launch flights from Carlisle airport on July 4, made a £15.5 million loss on discontinued operations during the period, including Stobart Air and its aircraft leasing business Propius, which it sold to Connect Airways in February.

It said there were a number of issues which contributed to the group loss, including:

  • £10.2m of costs in aviation, related to airline marketing, and Energy, associated with maintaining the supply chain during third-party plant commission delays, and £5.2m of legal costs mainly associated to the shareholder dispute.
  • Non-cash items included £16.3m of depreciation from continuing operations, impairment charges of £7.8m related to infrastructure assets and £3.2m of loan note impairment charges.

The dispute saw a campaign last summer by Stobart's former chief executive Andrew Tinkler to attempt to oust current chairman Iain Ferguson.

However, it said highlights included its part in the consortium which successfully bid for Flybe.

It added: "Simultaneously selling Stobart Air and entering into an agreement to sell Propius. Following this transaction, Stobart Group

has a 30 per cent investment in Connect Airways, which will identify cost synergies between Stobart Air and Flybe, reset

the cost base and develop a London connectivity strategy that will involve London Southend Airport."

Post year end, the group monetised its holding in Eddie Stobart Logistics plc through the issuance of a five-year exchangeable bond secured over its shares raising £53.1m, pre fees, and in excess of £50m of cash.

It added: "Stobart Group now has a clear plan to invest in accelerating the growth of its core operation divisions, and the cash

resources with which to fund that investment this year."

It said Stobart Aviation was now focused entirely on airports and aviation services.

Its principal asset, London Southend Airport, saw a 33 per cent increase in passenger numbers. easyJet flew around a million passengers at London Southend Airport in 2018. Ryanair flights began in April, and Loganair flights in May 2019.

ninety seven per cent of the renewable energy plants that Stobart Energy supplies to have now started commissioning and 90 per cent have

reached commercial operations.

Stobart Energy reached a year end run rate of 1.7m tonnes per annum as a result of more consistent plant performance, the firm added.

The Mersey Bioenergy and Margam plants are expected to reach commercial operations in the near term. Port Clarence is yet to start commissioning.

Chief executive Warwick Brady said the firm has "significantly strengthened its board and management team" following the dispute, and has taken the opportunity to deal with "legacy issues" with rigour.

He said: “This has been a transformational year for Stobart Group.

"We have significantly strengthened the board and management team and taken the opportunity to deal with legacy issues while putting in place appropriate operational rigour within the business.

"As a result of the disposals and impairments in the year, the group has de-risked its balance sheet.

“Stobart Group has a clear focus on developing infrastructure assets in the aviation and energy sectors.

"These are high growth assets with strong market positions that are now well positioned to become increasingly cash generative.

“We will invest in accelerating the growth of our aviation and energy businesses through existing cash resources and further non-core asset sales. By doing this, we can deliver sustainable operating cash flows and significant long-term value for shareholders.”