Originally Posted by
SEN Observer
What about the share price other than it closed 0.25 per cent up yesterday?
The share price is high because Stobart pay out £60m a year in dividends. They do this by selling off assets. Of course this can't last for ever (they will run out of assets to cover the dividend in the next 3 years).
So investors look to what the board have said about profitability. Where will the dividend payments come from in the future? The story being spun to analysts, who then punt it on to investors, is that the airport will see 2.5m pax by 2019, and 5m pax by 2022. And the proof of this growth can be seen in Flybe starting up new routes this year at the airport.
Of course, anyone with just an ounce of intelligence will look further than the analysts recommendations and understand that the Flybe new routes are in fact that airport owner's new routes, but it still makes for a good story.
The clock is ticking. Make the airport profitable before the assets available to sell run out. The recent sale and leaseback of the Stobart aircraft was another example of selling assets to pay the dividend.
The 2017 pax numbers forecast looks to be around the 1m figure. So next year they aim to more than double that. And then double it again by 2022.
I can't see how they will do that. They have mentioned a 4th based Easy aircraft and have mentioned Whizz. But will that double numbers in a year?