Stobart reports continued biomass growth in recent fiscal results

By Katie Fletcher | May 15, 2015

On May 14, the Stobart Group released its fiscal results for the 12 months ended Feb. 28, 2015, reporting its biomass division Stobart Energy supplied over 1 million metric tons of biomass, up 29 percent year-on-year.

This increase marks progress towards its objective of supplying more than 2 million metric tons of biomass annually by the 2017/2018 financial year. The company stated in the report that all volumes to deliver on its strategic aims are now secured, with clear visibility for supply volumes of more than 2 million metric tons of biomass into the biomass market by 2017-‘18 at an average price of £41.84 ($66.09) per metric ton.

In the report, Stobart also shared it secured four new long-term customer contracts in the last quarter to deliver an additional 1 million metric tons of biomass from March 2017. Additionally, the company developed a new biomass processing site in Pollington, England, to process 150,000 metric tons of wood waste per year. During the period, Stobart made an investment of £8.4 million in the biomass processing site.

“Our biomass fuel supply business has continued to progress strongly towards its volume and profit targets, said Andrew Tinkler, CEO of Stobart. “Our success is measured by the performance of contracts where delivery has commenced and by securing new long-term contracts for future delivery.”

Stobart’s biomass division reported total revenue of £68.4 million for the year ended Feb. 28, compared to £58.5 million in the prior year period. The total revenue consisted of £39.4 million on the supply side and £29 million for biomass transportation, compared to £28.1 million and £30.4 million respectively. Stobart Energy’s total underlying EBITDA was £7.8 million for the year ended Feb. 28, 2015 compared to £7.4 million for the year ended Feb. 28, 2014.

Stobart Energy’s total biomass tonnage sold last year was 1.17 metric tons, compared to 907,000 metric tons in the prior year. Revenue obtained per ton was £33.70, up slightly from £30.98 per metric ton in the period prior. “We expect to see further growth this summer as the Evermore plant in Northern Ireland commences, requiring 115,000 metric tons per annum, and we continue to increase volumes with existing plants in the U.K. as well as the export market,” Tinkler said in the report.

Overall, Stobart reported revenue from continuing operations up 17.6 percent over the past year to £116.6 million from £99.2 million in the prior year period. The company’s underlying EBITDA was £17.7 million over the 12 months ended Feb. 28, compared to £22.6 million in the comparable period before. Net debt was reduced by over 85 percent to £19.1 million with a gearing ratio of 4.7 percent. Basic earnings per share from underlying continuing operations of 2.6 pence (4 cents) were reported, compared to 0.6 pence for the prior year period.

Stobart ended its annual report with an outlook across each of its divisions. As for its energy division, Stobart intends to focus on delivery and supply chain management once target volumes are achieved. “We are focused on managing the sourcing, processing and delivery of wood biomass as efficiently and effectively as possible,” Tinkler said.  “Increases in landfill tax have tended to increase product availability and we expect market conditions, including the recovery of the construction industry, to continue to drive a healthy level of supply.  As market leader in this sector we have been able to select a portfolio of projects to support through to financial close in locations where we can match demand for fuel to the availability of material, minimizing the cost of logistics.”

These 2015 fiscal year results, follow Stobart’s 2014 annual report released earlier this year.