Shares at Aer Arann investor Stobart dive nearly 9pc
Shares in Stobart, the UK transport and logistics group that has stepped in to assist troubled airline Aer Arann, tanked nearly 9pc in London yesterday after it pared its full-year forecasts because of spending cuts implemented by Network Rail.
Chief executive Andrew Tinkler said the company had "slightly reduced" its full-year profit expectations as result of Network Rail's reduced spend and increased overall finance costs.
"We are also cautious that 2011 may see volumes affected by the increase in VAT rate and the government spending review," he added. "However, in the long term we see this as positive for the economy and our business."
UK chancellor George Osborne yesterday unveiled sweeping job cuts at the civil service over the next four years as well as reduced welfare payments as he plans to slash £83bn (€94bn) from budget spending.
Despite easing expectations for next year, Stobart said profit for the current year would still be significantly ahead of last year's.
In the six months to the end of August, the firm's revenue from continuing operations rose 11.7pc to nearly £244m (€277m), while earnings after fleet financing costs rose 26pc to £17m (€19.3m).
Among Stobart's assets is London Southend Airport. Earlier this month, the company said it would provide €2.5m in funding to support the launch of Aer Arann services to the facility, beginning next March.
Aer Arann is currently poised to exit examinership after a reorganisation of the business.
The five-year deal between Stobart and Aer Arann aims to generate 300,000 additional passengers a year at Southend Airport, where Stobart is nearing completion of a new control tower and a railway station.
That station is due to link the airport to Stratford, the site of the 2012 Olympics, and to London's Liverpool Street station.
Shares in Stobart closed down 8.6pc at £1.43 (€1.63) yesterday.