FTSE falls amid renewed trade fears and Stobart takes off

“The FTSE 100 started firmly on the back foot on Wednesday, taking its cue from weakness in Asia overnight as China appeared to reheat tensions over trade with the US. Sterling was also under pressure as jockeying in the Conservative leadership battle continued,” says AJ Bell Investment Director Russ Mould.

Stobart

“Southend Airport owner Stobart is taking flight this morning as it begins to emerge as a more streamlined business.

“Having put some testing boardroom battles behind it and agreed to funnel regional airline Stobart Air into its 30%-owned Connect Air joint venture, the company is free to concentrate on its 2022 target of getting five million passengers through Southend a year from around one million today.

“Assuming these passengers spend the £8 each the company is hoping they will, this could have a dramatic impact on the company’s profitability. The target is underpinned by a partnership with low-cost carrier Ryanair and by the big demands on airport infrastructure around London.

“The company is also being rewarded for thinking in the long term, with shareholders seemingly prepared to take the pain associated with a cut to the full year dividend in order to reap the benefits of investment in the business later on.

“One fly in the ointment for Stobart, which operates across the infrastructure services space, is the sluggish performance of its rail and civil engineering business, although a strategic plan is in place to turn things around here.”

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