Stobart is set to invest up to £40m in London Southend Airport between 2018 and 2021 after its aviation division benefited from a 25 per cent increase in passengers.
Shares in Stobart were up three per cent at the time of writing. In its trading update the biomass energy said it would continue to invest in route development, branding, marketing and airline incentive deals at the airport, plugging in £10m for this year alone.
In January 2018 Stobart launched a new executive jet fixed based operation (FBO) at the airport which is expected to cater for 5,000 flights per year by 2022.
One million passengers travelled through London Southend Airport last year after a 25 per cent rise in passengers over 2017. The airport now flies to over 30 domestic and European destinations, with the most popular choices over the past 12 months including Rennes and Amsterdam.
Stobart said its strategy was to use disposals from its infrastructure and investment divisions to support the dividend to 2022. From then on, the dividend will be supported through income from its aviation, energy and rail divisions.
Following the results, Stobart said that subject to board approval it would issue a further quarterly dividend of 4.5p per share on 6 July 2018.
Chief executive of Stobart Group Warwick Brady said: "Stobart Group has made good progress during the last year. We continue to see growth in our aviation division, with a 25% increase in passengers at London Southend Airport, 10% increase in passenger numbers flying via Stobart Air, and we are excited to be welcoming passengers at Carlisle Lake District Airport from Summer of this year.
"Stobart Energy has proven its model and is on track to deliver at a run rate of 2m tonnes of renewable energy fuel per year by the end of 2018 and Stobart Rail continues to add value across the Group. We continue to realise value from our infrastructure and investment divisions and these disposals are expected to support the dividend up until 2022, when we expect our operating divisions to meet their targets for EBITDA contribution."
Stobart said its rail division was bolstered by its winning of £6m worth of devegetation contracts including along the Transpennine route upgrade, adding that there was "minimal financial exposure" from contracts with Carillion.