The former chief executive of Exeter-based airline Flybe (FLYBE), Saad Hammad, declared a "major turnaround" had been achieved during his tenure when he left last month. It's true the group has come a long way since the problems it brought upon itself due to overexpansion, but it isn't entirely through the turbulent stage just yet. A lower load factor meant a 6.9 per cent decrease in passenger revenue per seat to £50.80 - greater than the 5.8 per cent reduction in costs per seat including fuel.
The lower value of sterling against the dollar was responsible for much of the drop in reported pre-tax profits as it led to increased costs of loans on aircraft, which are denominated in the US currency. But even without this, adjusted pre-tax profits dropped a quarter to £15.9m. The UK business, which accounts for about 95 per cent of revenue, increased seat capacity by 13.5 per cent even though executive chairman Simon Laffin acknowledged the aviation market was "tough", in part due to "excess seat capacity in the European short-haul market".
Analysts at Liberum cut their pre-tax profit forecast for the year to March 2017 from £6.5m to £4.3m, reducing EPS from 3p to 2p (£5.5m and 4.4p in FY2016).
| FLYBE (FLYB) | ||||
|---|---|---|---|---|
| ORD PRICE: | 36p | MARKET VALUE: | £78m | |
| TOUCH: | 35.5-36.3 | 12-MONTH HIGH: | 95p | LOW: 30p |
| DIVIDEND YIELD: | nil | PE RATIO: | NA | |
| NET ASSET VALUE: | 77p | NET DEBT: | 15% | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 340 | 22.9 | 12.3 | nil |
| 2016 | 383 | 7.0 | 6.2 | nil |
| % change | +13 | -69 | -50 | - |
Ex-div: na Payment: na | ||||
