Stobart Group Ld Share Discussion Threads

[fenners66] 11/11/2020 08:46

"Luddenden7
11 Nov '20 - 08:17 - 2275 of 2276

at a cyclical low yes it was, highly unlikely to be losing money once theyve reorganised the business, sold off non core assets and the economy returns to a degree of normality"

Have you even read the accounts for the last 3 years ?

They have only made money on selling off Eddie Stobart shares.

The businesses pre-covid were at a cyclical High !
and they were still losing money.

Read the accounts the proceeds of ES sale were to be used to pay a generous dividend Until they could make a profit - which is once again years away and the dividends have stopped the cash all used up !

[gaffer73] 11/11/2020 08:19

Good buy if they can roll the vaccine out before spring. Can you imagine how many people are going to be booking holidays, it will be bedlam and prices will be high.

[luddenden7] 11/11/2020 08:17

at a cyclical low yes it was, highly unlikely to be losing money once theyve reorganised the business, sold off non core assets and the economy returns to a degree of normality

[fenners66] 10/11/2020 20:13

But Stobart was already losing money...

[garycook] 10/11/2020 11:28

All Shorter,s must being closing,or closed by now with this rise.Were only under 0.5% recorded Shorter,s anyway.

[rayg5] 10/11/2020 09:03

Scientists do not work in isolation. I believe complementary vaccines - not competing ones - will become available. On that assumption trading this share is now muck riskier.

[rayg5] 10/11/2020 08:40

I am a former user of this hub. Flights to Spain were always full to capacity.

[rayg5] 10/11/2020 08:30

The Southend route was profitable for easyJet. I figure they'll be back there in due course.

[stockriser] 10/11/2020 08:29

I reckon 40p this week ;-)

GLA SR

[y1phr1] 10/11/2020 08:25

Steady as she goes

[andrzejs1] 10/11/2020 08:11

Boom ? time

[y1phr1] 09/11/2020 13:00

30p will be a good start

[luddenden7] 09/11/2020 12:23

and there we have it, a successful vaccine, COVID over, can this please now re-rate to somewhere near fair value, ie. 40p for starters

[lpavlou] 05/11/2020 21:34

Only 56percent of the fundraising was taken up with the under-writers picking up the rest which may explain why the share price has halved since then. Nothing is going to change until March when the summer flight schedules are announced and we'll know how many flights are planned. Amazon flights have helped but the money is in commercial flights. I'm staying out until there is more certainty

[tnw78] 05/11/2020 17:22

It's just a play on Covid isn't? Quick vaccine, world gets back to normal, offload Stobart Air, thing is worth a lot more than 20p.

Otherwise... dead money at best, maybe much worse.

My sense is there are much cleverer ways of playing a quick Covid recovery.

[fenners66] 05/11/2020 11:06

As I said
"The underlying assets may well be worth lots down the line - but to whom?"

The to whom bit , is who gets to sell them?

Businesses with assets with future value go bust all the time , they run out of cash.
Lenders know this.
Short term pain becomes long term gain for them.

I cannot see Stobart making a profit for years.
I cannot see them making a meaningful profit for many years.
I can see them begging someone for more cash - why not be a lender and wait the covenant test failure then take the assets....and wait a few years.

Equity investors see the value of their short term investment falling and being diluted - surely their are better short term rewards elsewhere ?

[luddenden7] 05/11/2020 10:59

Fenners66

You are looking at this from a very extreme perspective. For one, the airport is attractive to the world's infrastructure funds, and there are many and that list grows, along with the size and spread of SWF's looking for long duration cash flow businesses with high barriers to entry such as an airport

Meanwhile the biomass unit is only going one way as the world continues to make the ESG transition. Granted both divisions are not worth today what they worth back in January, take a 50% haircut, but does this year's loss really impair the long viability of these businesses and their cash flows 10-20 years out? no it doesn't in my view, and i would suspect it doesn't impair the view of an infrastructure fund manager either. On the contrary.

[garycook] 05/11/2020 10:02

fenners,I think Toscafund would not be very happy !!!

[fenners66] 05/11/2020 09:57

Luddenden7

Whilst the airport and biomass businesses may have been worth that much - they are really only worth what anyone wants to pay for them.

But who would want to buy at that valuation now?

Fundamentally though you are trying to apply the enterprise value of the businesses to get a share value.

In good times value businesses remove debt and balance = shares.

In bad times when the businesses are losing cash and losses are continuing?

The underlying assets may well be worth lots down the line - but to whom?
Existing shareholders may well get diluted again - so shares could be worth less.
Alternatively - Mike Ashley learned from Debenhams that owning the shares did not give him any power - it was the debt holders that took the company from the shareholders.


Given the losses - it may well be the smart place to be.
Lend more cash , enforce covenants , take the company - lose on the debt but gain ALL the assets and sell down the line at a huge profit.

Shareholders shafted.....

[luddenden7] 05/11/2020 08:23

I dont agree. They didnt even plan to raise so much (initially £80m) during the fund raising but after pressure from Tosca and Polygon they settled for a £100 raise. They had no trouble filling this. At the end of the day you have a number of tangible/hard assets here, the airport (last valued at £750mn pre COVID), the energy unit (£150-£200mn), take out all of the debt and you're left with a company trading below the value of all of these entities. The company can either be valued on this base, sum of the parts or just the cash flows of these businesses through DCF. Profits from the two are clearly cyclically depressed right now, but they wont be forever

[lpavlou] 04/11/2020 20:01

Biomass would have been worth 200m if they had maintained the profit level as the best prices are paid by infrastructure funds that like low risk investments with guaranteed cash flows.The first lockdown where construction sites were closed meant that Stobart had to buy in wood to maintain supply as opposed to being paid to take the wood. They were lucky to get the fundraising away

[y1phr1] 04/11/2020 19:05

Looking like straight back to 24p

[luddenden7] 04/11/2020 13:27

"Going Concern. The base case forecasts indicate that the Group will have facility headroom of c.GBP47m at February 2022. However, there is a forecast breach of some covenants in November 2021."

"This forecast indicates that the Group may require additional funding by February 2022 and may breach some covenants in May 2021. "

> Thats assuming they dont make any further divestments and therefore de-risk the balance sheet even further, the biomass/energy unit was last valued at £200mn alone.

[nige co] 04/11/2020 12:55

I took a very small £102 profit this morning at 20.837p. GL to all.