Results for the 6 months ended 31 August 2021

David Shearer
Executive Chairman, Esken

"We are pleased to report an improved financial performance and are executing our focused strategy to deliver long term growth. Following the successful completion of the capital raise and refinancing the Group has £90.5m of liquidity available to it at the half year – ahead of management expectations.

As previously indicated, Stobart Energy has had a strong start to the year with profitability and cash generation improving significantly and returning to pre COVID-19 levels. Improving gate fees and increased wood supply from the construction sector gives us confidence we should reach £18-20m of EBITDA in FY22 after Group recharges.

Continued global logistics income coupled with the long term strategic partnership with Carlyle provides LSA with optionality to focus on securing the right commercial airline agreements for Esken’s shareholders. LSA continues to progress positive discussions with airline partners and is confident in its offering including its cost efficient operating base, proven routes, award winning passenger experience and proximity to London.”

Financial highlights

  • Positive EBITDA from our two core operating divisions, increasing from £1.5m in the six months ended 31 August 2020 to £9.9m, driven by a strong performance at Stobart Energy and management of costs and £3.5m of one off receipts within the Aviation businesses.
  • Loss for the period of £6.4m compared to a loss of £88.1m for the six months ended 31 August 2020. The comparator period includes £73.0m of losses associated to discontinued businesses (Stobart Air, Propius and Stobart Rail & Civils).
  • The £6.4m total loss during the period reflects £5.6m of positive EBITDA and a tax contribution of £9.0m, £10.1m of depreciation and an increase in net financing costs from £2.4m to £8.0m.
  • Completed refinancing that included strategic funding in relation to LSA together with a new working capital facility and equity raise. This enabled Esken to repay all outstanding bank debt and will allow the business to meet its ongoing working capital requirements, whilst underpinning the business plan going forward. The management of costs associated with Stobart Air, following its liquidation in June 2021, and Propius, and work to dispose of the £39m portfolio of non-core assets remain in line with management expectations.

Financial Summary

£'m20212020% change
Revenue by division
Revenue for two core operating divisions51.046.79.2%
Investments and Non-Strategic infrastructure0.30.8(61.7%)
Group central and eliminations0.40.5(39.3%)
Total revenue51.748.07.7%
EBITDA by division
EBITDA for two core operating divisions9.91.5573.1%
Investments and Non-Strategic infrastructure(0.5)(0.8)31.9%
Group costs and eliminations(3.8)(4.5)16.2%
Total EBITDA5.6(3.8)246.6%
Loss before tax(12.5)(16.1)21.9%
Discontinued operations, next of tax(2.9)(73.0)96.0%
Loss for the period(6.4)(88.1)92.7%
Non-cash loss on acquisition of Stobart Air and Propius-(14.3)-
Net debt - excluding IFRS 16(123.4)(89.2)(38.4%)
Net debt - total(230.0)(223.7)2.8%
Cash and undrawn banking facilities90.5119.124.0%


    • Stobart Energy experienced a strong financial recovery in line with management expectations at the time of the Company’s refinancing. Revenue is up 14.8% to £38.1m and EBITDA is up 279.1% to £9.1m with market conditions returning to pre-COVID-19 levels as expected, with improvements in waste wood supply, gate fee pricing and plant availability.
    • It supplied 706k tonnes of biomass fuel to energy plant customers during the period, representing a 14.5% increase in volumes compared to the six months ended 31 August 2020.
    • Stobart Energy has continued to deliver on its biomass plant supply contracts whilst navigating market challenges, including the well-publicised HGV driver shortage.


    • Passenger numbers reduced by 63.2% to 46k during the period with the airport delaying a restart in commercial passenger operations to the start of Summer flying in April 2022, allowing the airport to minimise costs and cash burn during the traditionally quieter Winter period.
    • Despite the market backdrop and the global retraction in airline operations, EBITDA improved by 181.4% during the period to £762k. This reflects the performance from the global logistics operation, continued cost management including a reduction in airline marketing support, and £3.5m of one off receipts associated with Connect Airways and the conclusion of its partnership with Teesside International Airport.
    • LSA continues to retain £19.7m of ring-fenced cash following the completion of Esken’s refinancing in July 2021.

    ESG progress

    • Esken has put in place a new ESG governance structure to provide performance visibility at Board and Audit Committee levels. ESG performance KPIs for the Executive Team and Division Boards will be agreed ahead of the new financial year.
    • Esken is collecting data to enable it to report on Scope 1-3 environmental data at the time of its full year results, when it also intends to report on financial disclosure on climate change ahead of government requirements.
    • Esken’s divisions have each appointed charity partners for the year and are organising a series of fundraising events. Esken colleagues have also been supporting local schools with careers fairs and mentoring programmes.

    Board and Senior Management changes

    Esken also announces today an updated management structure which follows the resignation of Warwick Brady as Chief Executive Officer in February 2021. The Board has carefully considered the leadership requirements of the business given the simplified structure of the Group with two core operating divisions and has consulted with a number of its major shareholders.

    It has been decided to retain the existing structure with some amendment to responsibilities. David Shearer will remain as Executive Chairman with responsibility for stakeholder management, execution of strategy and executive leadership. Lewis Girdwood, CFO, will take on the additional role as Executive Director - Aviation with main board responsibility for that division. Nick Dilworth, COO, will take on the additional role of Executive Director - Energy with main board responsibility for that business, in addition to his Executive responsibility for ESG.

    The changes have the support of major shareholders and the Board believe it is in the best interests of investors. In order to maintain strong corporate governance, David Blackwood will become Deputy Chairman and Senior Independent Director so that the Board and shareholders have a point of reference independent from the Chairman. These changes take effect immediately.


    Stobart Energy has had a strong start to the year and Esken is now able to provide guidance for FY22.

    Esken anticipates Stobart Energy will achieve EBITDA in the range of £18-20m after Group recharges based on the expectation it will maintain a supply run rate of 1.5m tonnes, normalised winter gate fees and that the plants that we supply do not experience any further unplanned outages. Esken further anticipates that Stobart Energy is well placed to build on the FY22 outlook as it continues to improve profitability.

    The easing of travel restrictions due to the successful roll out of the COVID-19 vaccination programme means the outlook for aviation is becoming more positive. Whilst we do not expect to see any pick-up in activity during the traditionally quiet Winter season, the Group remains focused on a steady improvement in passenger numbers from the Summer season 2022, which commences in April 2022. LSA has £19.7m of ring fenced cash to support its development through to a cash positive position, which is targeted for FY24.