Stobart Group posts €20m loss as courtroom showdown looms
Stobart Group, the UK transport group whose air unit operates the Aer Lingus Regional service, posted a £17.5m (€19.8m) loss in the first half of its year, compared to a £111.9m (€126.7m) profit a year earlier, as it emerged from a bruising boardroom bust-up during the summer.
Revenue at the group rose 21pc to £151m (€171m) in the first half, but that included £15.7m (€17.7m) generated from Stobart's franchise agreement with Flybe, which is coming to an end in 2020.
The company - whose interests range across aviation, railway engineering and biomass - said that it incurred an £18m cost related to its investment in its London Southend Airport during the first half of the year.
Its net debt also doubled to more than £75.5m (€85.5m) in the first six months of 2018.
However, Stobart said passenger numbers at Southend rose 37pc in the period to 838,742.
The group sealed a deal earlier this year with Ryanair, which will operate a base from the airport starting next summer, with three aircraft flying 13 routes. Easyjet also operates from London Southend.
But Stobart's aviation division posted a loss of £2.7m compared to a £3.6m profit in the first half of 2017, with £18.1m (€20.5m) of the most recent loss related to the group's Flybe franchise operation.
Its energy division posted earnings before interest, tax, depreciation and amortisation (ebitda) of £6.5m, compared to £2.5m a year earlier.
CEO Warwick Brady said the company had remained focused on its aviation and energy units.
"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," he said.
The company also said that it plans to "grow its valuable relationship" with Aer Lingus and "maximise its revenue potential and improve load factors on established routes".
Stobart sacked its former CEO, Andrew Tinkler, as a director of the group last June.
The group then stated that it would be imminently issuing legal proceedings against Mr Tinkler for alleged "breach of contract and breach of fiduciary duty".
Stobart also claimed that Mr Tinkler had made decisions regarding a failed takeover plan for Flybe earlier this year "to enrich himself".
Mr Tinkler has denied the allegations and is also counter-suing Stobart claiming that his dismissal as a director in June was invalid. Legal representatives for the two sides attended a hearing in London on Tuesday. A trial is scheduled to take place next month.
After a dramatic showdown at Stobart's annual general meeting in Guernsey in July, Mr Tinkler, and his backers, narrowly failed in their efforts to have incumbent chairman Iain Ferguson removed from the board.
Mr Tinkler owns 7pc of Stobart, which has a market capitalisation of £734m (€832m). He has claimed that key information has been withheld from shareholders.