Stobart Group Ld Share Discussion Threads

[bit thick] 31/5/2019 10:48

" With Ryanair you will be able to go to Venice Marco Polo. That will bring lots of tourists" so do you think tourists will come from Venice to visit Southend?

[lpavlou] 30/5/2019 20:30

Much larger volume today which is encouraging to see. Last time I used Southend it only took me 20 minutes from parking up to getting into the departure lounge. There is huge scope for increasing passenger numbers without capex, but to get to 10m passengers sounds a tall order, but a great target to aim for. Heathrow expansion won't be ready for another 10 years at best.

[cascudi] 30/5/2019 16:07

I see a big future for Southend airport. Everybody I know they love the simplicity of the airport. With Ryanair you will be able to go to Venice Marco Polo. That will bring lots of tourists. Stansted is nightmare and not pleasure airport to fly from

[lpavlou] 29/5/2019 21:38

Minerva, I agree the bonds are a bit odd, but they must be confident of securing higher levels of return by investing in the airport. That excludes the £44m saving from the dividend cut.Good to see some director purchases today even though they are small beer. The uncertainty of the delayed results resulted in the share price dropping from £150 to £103, so expect the share price to recover back to that level over the next 3 months.

[minerve 2] 29/5/2019 12:51

Post balance sheet events

On 3 May 2019, the Group placed GBP53.1m of secured guaranteed exchangeable bonds (Bonds) issued out of its wholly owned subsidiary Stobart Finance PLC. The Bonds will have a five-year maturity and will be unconditionally and irrevocably guaranteed by the Company and will be exchangeable into ordinary shares of 1 penny each in the capital of Eddie Stobart Logistics plc (ESL). The Bonds were issued at par, in principal amounts of GBP100,000 and integral multiples of GBP1,000 in excess thereof,➡A039; and will bear interest at 2.75% per annum, payable semi-annually in arrear in equal instalments. The issuer will also pay holders of the Bonds a cash amount equal to the gross value of all cash dividends attributable to the ESL shares during the term of the Bonds. ⬅️ Unless previously exchanged, redeemed, or purchased and cancelled, and subject to a share redemption option of the Group, the Bonds will be redeemed at par on 8 May 2024. The Group intends to make the ESL shares underlying the Bonds available to bondholders for hedging purposes and will lend such ESL shares under a stock lending arrangement



That is a pretty steep interest rate if you ask me.

Interest 2.75% plus ESL dividend at current share price c7.952% = 10.702% per annum.



So the questions/issues are:

(1) Why such a high interest rate for a supposedly safe asset generating supposedly good forward earning streams?
(2) Why are the assets secured against ESL and not Stobart?
(3) Be aware that they have now lost the dividend income from ESL and the bonds mature in 8 May 2024.
(4) Presumably they will also be locked into not selling their stake in ESL for the period which means the £53M has to be spent wisely or we are in trouble. If dividends are uncovered they could easily disappear going forward.
(5) Another observation: Stobart accounts are a mess IMO.

[bluemango] 29/5/2019 08:14

Market appears satisfied/pleased anyway.

Point about dividend cover made earlier is valid, of course, but one also needs to take into account future revenue drivers, with Stobart having the potential for great growth from varying business areas.

Market watchers will be eyeing them closely over coming months to see if delivery matches expectations.

[slaccs] 29/5/2019 07:38

elliotset - Not sure we're looking at the same results!

[tomps2] 29/5/2019 07:35

Video: STOB FY results overview by Warwick Brady, CEO



Highlights, with a brief overview of each division.

[elliotset] 29/5/2019 07:17

Great results , progress in the company , onwards and upwards

[anony mous] 28/5/2019 21:18

I have no position but read this, might be of interest....snippet...,Tuesday 28 May 2019Interactive Investor TalkBy Tom Bailey from interactive investor.Geffen fears that many other supposedly "safe" dividend-paying companies are also likely to face a cut, citing falling levels of dividend cover as his key concern.As a rule of thumb, shares with a dividend cover score of above 2 are considered reliable dividend payers.Meanwhile, a number of companies on our Dividend Danger Zone screen all have dangerously low dividend covers.The worst offender is Stobart Group (LSE:STOB), with a dividend cover of 0.5 times. That means that half of its dividend is being paid for with borrowing. The infrastructure and support services company already cut its dividend last December, citing a lack of cash. Further cuts, it seems, may still be ahead.

[chris79] 28/5/2019 19:28

Is there an idiot's guide (few notes from a kind person here?) on the difference / inter related workings between STOB and ESL? Does buying STOB give any exposure to the lorries for example?

[john09] 28/5/2019 13:37

A good move

[lpavlou] 24/5/2019 21:55

I picked a few up this afternoon. I was waiting for the share price to hit 1pound, but took the plunge at 1.05. Will continue to add if the share price remains around this level as the fall from 1.50 has been over-done if the last statement issued is accurate. At least the 6p dividend is more sustainable.

[gaffer73] 24/5/2019 19:01

No it's a bit strange but it could be due to the airline sector in general. We'll see next week with the results.

[porsche1945] 24/5/2019 13:30

Back to a quid, boy did I call this pos right or what?

[stur7672] 24/5/2019 13:13

Hopefully just someone dumping to fund a legal bill or a fund manager selling down to fund customer withdrawals? I just hope those who were fortunate to see something in the tealeaves 2 /3 days ( when this recent decline commenced) before the results delay RNS haven't seen something else detrimental.

[gaffer73] 24/5/2019 12:44

"Stobart Group is confident of delivering full year revenue, underlying EBITDA performance and the recommendation of a final dividend in line with management expectations. In particular, management is pleased with the ongoing commercial progress within its Aviation and Energy divisions."Can't see any reason for the recent drop. This will be back to 150p in no time imo.

[john09] 23/5/2019 14:56

Market cap of £400m. Seems a good price

[rounder2] 23/5/2019 11:37

I like this chap . Followed him @ Speedy Hire and think he has his head screwed on the right way . The only thing that is " slightly " concerning and makes me think there may be bad news to come ( narrative / results / situation ) is that DS is regarded as a " TurnAround Specialist " .....mmhhhhhhh

My point : Why does a currently " well run " company with a clearly defined strategy , working to a plan , need a " TurnAround specialist " ...


Skills and experience
David is an experienced independent director, corporate financier and turnaround specialist. He is non-executive Chairman of Aberdeen New Dawn Investment Trust plc and the Scottish Edge Fund. David was previously senior partner for Scotland & Northern Ireland and a UK Executive Board member of Deloitte LLP, Co-Chairman of Martin Currie (Holdings) Limited, Chairman of Mouchel Group plc and Crest Nicholson plc and a non-executive director of City Inn Limited in each case standing down after completing the successful restructuring of these businesses. He was also non-executive Chairman of Liberty Living Group Plc, Liberty Living Finance plc, Senior Independent Director of Renold plc, STV Group plc, Superglass Holdings plc and Scottish Financial Enterprise, a non-executive director of Mithras Investment Trust plc and a Governor of The Glasgow School of Art.

[rounder2] 23/5/2019 11:29

Seems to have found some support at 107/109 , bounced off this twice now .
Very interesting .

[john09] 23/5/2019 10:45

Oooo cheaper and cheaper. 90p bottom?

[rounder2] 21/5/2019 14:23

Ouch !!

Must be missing something here methinks

In any event 105 seems like an excellent entry point

I'll be buying

[john09] 21/5/2019 06:18

The dividend cuts have hammered this one down. Those 18p dividends were crazy , the cut to 6p was quite a cut!