Stobart Group will furlough 50 per cent of its staff as part of a range of measures implemented to protect the firm against the coronavirus pandemic, the industrial conglomerate announced this morning.
In addition to putting roughly 750 employees on the government’s job retention scheme, the firm, which owns businesses such as London Southend Airport, has also scrapped its financial guidance for the year.
Stobart’s board and senior management will all take a 20 per cent pay cut, whilst non-furloughed management will take a 10 per cent pay cut.
In a statement, the firm said: “These steps have been taken both to maintain the operational capability of our core businesses and ensure they are well placed to gear back up when the recovery takes place”.
At London Southend, the largest of the firm’s three airports, passenger services have ground almost to a halt, with the airport now only open three days a week after the collapse in demand for air transport.
Wizz Air and Loganair are currently running a combined nine flights a week from the airport.
The firm recently revealed that it was in talks to sell 25 per cent of the airport to German firm Avi Alliance, but said the sale would be delayed due to the pandemic.
Stobart added that while its energy business, which produces about two per cent of the UK’s electricity, continues to operate, the declining availability of waste wood due to the suspension of most construction activities could have an impact on pricing.
As a precautionary step, the firm said Force Majeure or Pre Force Majeure notices have been issued to the majority of our major renewable energy plant partners.
Chief executive Warwick Brady said: “Despite the current challenges presented by the COVID-19 virus, we continue to own and operate aviation and energy assets with significant underlying value.
“There remain significant medium and long-term opportunities to further increase the value of the assets for our stakeholders.
“We are maintaining regular communication with our partners and ensuring we are well placed to get back to full operation quickly once this exceptionally challenging time has passed.”
Shares in Stobart Group rose 3.7 per cent as markets opened.