A struggling domestic economy and sharply higher fuel prices have already forced profit warnings from Flybe, and conditions remain tough. Still, these results weren’t quite as bad as feared and the share price descent, which began last summer, could well have run its course.
Last year's £5.7m pre-tax profit at the core UK operation did, however, morph into a £2.2m loss, despite a 2 per cent increase in passenger numbers. Half a year’s trading from the Finnair joint venture added £63.5m to the fledgling European division’s top line, but Flybe’s share of the losses cost it £3m, and a new £1.2m training academy meant the support business lost money, too. Fuel costs rose 15 per cent and airport charges added an extra £4.5m.
But management hasn't been idle. Managing costs and capacity are "mitigating the impact of the economic downturn in the UK," reckons chairman and chief executive Jim French. Flybe also sold planes, introduced fuel surcharges and announced new routes following bmibaby's demise. Taking on more contract flying is de-risking the business, too.
Investec Securities expects adjusted pre-tax profit of £0.5m in 2013, giving EPS of 0.5p (2012: £7.4m loss/10.1p loss per share).
FLYBE (FLYB) | ||||
|---|---|---|---|---|
| ORD PRICE: | 65p | MARKET VALUE: | £ 48.8m | |
| TOUCH: | 65-66p | 12-MONTH HIGH: | 200p | LOW: 48p |
| DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
| NET ASSET VALUE | 119p | NET DEBT: | 33% | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 571 | 24.6 | 42.0 | nil |
| 2011 | 596 | -4.30 | 6.40 | nil |
| 2012 | 615 | -6.20 | -8.50 | nil |
| % change | +3 | - | - | - |
