Expressflight,
You have stated the internal rent figures as quoted in the interim results correctly. However upon a closer examination it is clear that these figures need to be treated with caution (hence my earlier comment about them being "as clear as mud"). The internal rent figure is supposed to be closely linked to the asset value that is being used however neither this 6 month period's figure of £713k makes sense on a £100m+ asset, nor does the increase in the internal rent by a factor of x5 from the previous 6 monthly figures.
Either the infrastructure division is not making the most of the asset of the operating division is not paying for the use of the asset. If Stobart Group had maintained the previous EBITDA only reporting stance then no one would look at the internal rent but since it has been disclosed the figures are subject to scrutiny.
I've assumed a like-for-like earning potential on the airport as for other assets in the infrastructure division's portfolio. I calculate the internal rent on a like for like basis to be £1.56m. This is still represents a 77 year pay-back period for the investment in the airport but is a lot more realistic than the quoted £713k, which was undoubtedly used to show that the airport operations are making a modest profit.
The "muddiness" of the figures is not a concern for me. The statement that the new Flybe and Skyworks flights will not off-set the loss of Easyjet routes is. I think a radical rethink of the marketing strategy is in order. It is nice to see the management thinking about the City of London and hence business customers but a large number of business customers need early morning/late evening same day flights otherwise they will go elsewhere. The Easyjet Geneva offering is a classic example that won't attract a single business passenger. I think the golf club toting Malaga set have enough flights to satisfy them. What the airport now needs is early morning departures to key European business destinations (supported by a train service running early in the morning) and late evening return flights. Let's hope the management are thinking along the same lines!