(Reuters) - British airport operator Stobart Group (STOB.L) suspended its dividend to conserve cash and reported a bigger first-half loss on Thursday, hurt by impairment charges, sending its shares down 9%.
Stobart’s dividend has largely been funded from asset sales rather than operational cash generation, a practice which the company called unsustainable. The suspension will save the company £22 million per year.
The infrastructure and support services company intends to restore the dividend when it has much more cash at an operating level, but said it will continue to sell assets.
The company, which owns airline Flybe along with Richard Branson’s Virgin Atlantic, said its loss widened to £20.9 million in the six months ended Aug. 31, compared with a loss of £17.5 million a year earlier.
The loss includes an £8.5-million non-cash impairment of intangible assets in Stobart Rail & Civils, a £3.7-million non-cash brand amortisation and £7.4 million of new business and new contract set-up costs.
However, underlying core earnings rose 187% to £12.1 million, bolstered by growth in its core aviation and energy divisions.
Reporting by Tanishaa Nadkar in Bengaluru; Editing by Saumyadeb Chakrabarty, Bernard Orr