22 March 2022

Esken Limited

("Esken" or "the Group")

Trading update and notice of results

Esken, the aviation and renewable energy infrastructure group, issues the following update on trading ahead of the publication of its full year results for the twelve months to 28 February 2022, which will be announced towards the end of May 2022.

Energy

Stobart Energy continues to play a critical role in the UK's energy value chain and supporting the transition to a low-carbon economy by sourcing waste wood to supply to biomass plants which generate c.2% of the country's energy.

The business ended the financial year trading at the upper end of management's guidance range for EBITDA of £18-20m. This performance was driven by improved gate fees, increased supply of waste wood and a robust operating performance from its biomass plant customers.

Whilst there is no direct relationship between energy price increases and Stobart Energy's long term RPI-linked biomass fuel supply contracts, stronger and more profitable customers are a positive for Stobart Energy. Higher energy prices are also a key driver for plants to maximise output to the fullest extent,  thereby requiring greater fuel supply. 

Aviation

It is encouraging that the majority of European travel restrictions have been lifted and airlines have been seeing an improvement in booking volumes for Summer 2022, although the impact of higher fuel prices on both customer demand and airline flying capacity is currently unclear.

London Southend Airport is well positioned for the recovery and longer-term growth in air travel and, as volumes recover and more established London airports begin to face capacity constraints once again, London Southend Airport's London catchment area and strong transport links support positive growth prospects.  Wizz Air recently decided not to restart its flights from one destination to London Southend Airport for Summer 2022. However, the airport will benefit from the return of easyJet flights, with tickets already on sale for flights to Malaga and Palma, and flights to Faro were put on sale on 17 March 2022. The Company also continues to have active dialogue with a wide range of airlines with a focus on delivering the right airline agreements for Esken for Summer 2023 onwards.  

While flying was constrained during the traditionally quieter winter period, the airport continued to benefit from global logistics income. Esken has maintained strict financial discipline, underpinned by £14.4m of ring-fenced cash, which will be used to support the airport as it works toward a positive cash contribution.

Balance sheet and liquidity

Esken had £72.7m of liquidity available to it at the year-end (31 August 2021: £90.5m), which is ahead of management's expectations and includes the £14.4m of ring-fenced cash in LSA (31 August 2021: £19.7m), and a £20.0m Revolving Credit Facility. Esken has £48.6m of outstanding liabilities payable through to FY24 associated with the liquidation of Stobart Air and ongoing Propius leases and their related costs as of 28 February, 2022. As of 28 February 2022, Esken retained £38.8m of non-core assets held for sale.

Enquiries:

Tulchan Communications                                                                                            +44 (0)20 7353 4200

Olivia Peters / David Allchurch                                                                                    esken@tulchangroup.com