Canaccord Genuity keeps Esken 'under review' following disposal news

Analysts at Canaccord Genuity took a fresh look at aviation and energy company Esken on Tuesday following the group's eagerly anticipated announcement regarding the future of Stobart Air and the Carlisle Lake District Airport.

Canaccord said the move removed "a significant amount" of financial risk and uncertainty, which had weighed on the company for the past 12 months or so, reducing the firm's monthly cash burn to roughly £2.0-2.5m and allowing management to focus on its core operations of Stobart Energy and London Southend Airport, as well as the aviation services business.

"Following today's news, Esken can focus on its near-term priorities of restoring the profitability of Stobart Energy and rebuilding passenger volumes at LSA once flight restrictions are substantially eased," said Canaccord.

"Post Covid-19, we expect LSA's passenger volumes to grow strongly and, combined with its expanding cargo handing business, we believe the airport is well placed to deliver profitable growth and drive shareholder value."

However, the Canadian bank added that due to the impact of the Covid-19 pandemic, and the resulting lack of visibility, its forecasts, target price and recommendation all remained 'under review'.