Stobart Group shares hit 10-year high

The revival in the share price is a vindication of chief executive Andrew Tinkler's strategy to refocus the infrastructure and support services group.

The shares were trading at 177p yesterday, the highest since February 2007 when the share price reached a peak of 183p.

That was followed by a spectacular collapse, which saw the shares plunge to 73.5p by December 2008.

Although a recovery followed, they plunged again to 75p in April 2013 in the wake of a profits warning and boardroom changes.

The collapse saw Stobart Group ejected from the FTSE 250.

But the company's fortunes changed following a major restructure in 2014 when Stobart completed a £280 million deal to sell a majority stake in the Eddie Stobart road haulage business to a private-equity investor in the Isle of Man.

The deal released £195.6m in cash, which the company used to reduce debt, buy back shares and invest in its other interests including aviation, rail maintenance, and biomass, which it saw as having more growth potential.

Investors began to take notice when Stobart announced last year that it was to double its dividend and switch to paying quarterly dividends.

And their enthusiasm for the shares was boosted further by half-year results, announced in October.

Stobart Group made £10.8m before tax in the six months to August, up from £0.6m in the same period of 2015.

Underlying profits, which ignore one-off items and give a truer picture of the business' profitability, rose 252 per cent from £4.6m to to £16.2m.

Looking ahead, Mr Tinkler remains confident.

Commenting on the latest annual results, he said: “We are on track to deliver our strategy by 2018 and drive shareholder value through our three growth operating divisions of energy, aviation and rail, while generating a cash surplus through the exit of our infrastructure and investment portfolios at the right time allowing increasing returns to shareholders.”