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Risk Management
Nature of Lease Obligations
Stobart Group has a number of warehouse and operating
depot leases which represent a significant cost commitment
and contribute to material fixed costs.
Where possible, the Group sublets facilities in back-to-back
arrangements with end customers to minimise financial risk.
The warehouses are predominantly on standard commercial
property terms and include periodic upwards only rent reviews.
Fuel Prices
Fuel prices represent a high cost in the Group. The impact of
fuel price movements on financial performance in 2009/2010
and 2010/2011 has been negligible due to the use of fuel
price escalators within all customers contracts.
Commercial Property
The Group currently holds an interest in a number of
commercial property assets. These properties are subject to
the general property market climate. The values have been
substantially written down in previous years following the
downturn in the commercial property market. The Group has
seen in increase in value in a number of the properties during
the year. The commercial property Joint Venture interests had
previously been written down to £nil.
Acquisitions
The enlarged Stobart Group was formed by a merger in
September 2007 and has, since then, completed a further five
major acquisitions.
The synergistic benefits from the merger and acquisitions will
be derived from successful integration of the various interests.
The Group has adopted detailed integration plans to ensure
the integrations are successful.
Capital Expenditure
The successful development of the Group’s assets at London
Southend Airport, Carlisle Lake District Airport, Widnes and
the Port of Weston at Runcorn will depend on securing
funding for the proposals. The Group manages its capital
and debt and believes it is in a strong position to realise the
potential of these assets.