Stobart shares spiral on widening losses as boardroom battle takes its toll

Southend Airport owner Stobart Group saw its losses increase by almost half in the six months to August, weighed down by ongoing legal disputes and an investigation into reports of bullying.

Shares in Stobart fell over nine per cent as markets opened this morning.

The figures

Revenues at Stobart across its aviation, energy plants and civil engineering divisions rose 21 per cent to £151.3m, up from £124.6m in the same period in 2017.

However this included £15.7m in revenues from its franchising operation of domestic airline Flybe, which the group has now ended as it prepares to launch new agreements with Easyjet and Ryanair.

The group's loss for the period rose to £17.5m from £11.9m, as it continued to invest heavily into Southend Airport. 

Passenger numbers to the London airport rose 37 per cent to 838,742.

Its energy division reported a profit increase to £6.5m, up from £2.5m last year, while its civil engineering division swung to a loss of £4.8m after recording a profit of £1.4m in 2017.

Why it's interesting

Stobart has been hit heavily by its ongoing dispute with former chief executive Andrew Tinkler, who is alleged to have led a conspiracy against the company in an unsuccessful attempt to topple chairman Iain Ferguson in July.

Tinkler had put forward Edinburgh Woolen Mill owner Philip Day for the role, but was narrowly defeated at the firm's annual general meeting where Ferguson won out with 51.2 per cent of the vote.

In a court hearing yesterday regarding Tinkler's dismissal from the firm, Tinkler's lawyers argued his dismissal from the company's board shortly after June's meeting was invalid.

Stobart, on the other hand, claimed Tinkler had made decisions while he was chief executive regarding the failed takeover of Flybe last year to "enrich himself". They have accused him of a "breach of contract and of fiduciary duty".

Today's results also revealed the conclusion of an independent investigation into reports of bullying at the firm, which it said proved to be false.

What the company said

Chief executive Warwick Brady said:

"We have remained focused on operational progress in our Aviation and Energy divisions, which have both performed well in the period.

"Having invested in the infrastructure for these divisions, we are now well placed to accelerate our commercial growth plans and demonstrate the value of the Group's excellent operating businesses."