The trajectory of shares in Flybe (FLYB) mimicked that of an extremely short-haul flight on the day of its half-year results: a positive reaction to the pre-tax profit number soon gave way to a sombre appraisal of the cautious outlook statement. But over the longer term, investors' fortunes depend on the end-game of the airline's four-chapter overhaul plan. Flybe has restructured, modernised its brand and dealt with excess aircraft. Now it has to achieve "profitable growth".
Chief executive Saad Hammad's warning that "competitive pressures are expected to grow in the second half" suggests the group has a tough task ahead. But there were positives to draw from the interim numbers. Capacity rose 13 per cent to 5.9m seats flown, while passenger numbers rose 10 per cent to 4.5m. The group also saw costs per seat fall 7 per cent on a constant-currency basis, helped by fuel but also by the removal of £14.5m in surplus aircraft costs after the group put three excess aircraft to use as part of its Project Blackbird.
This plan involves putting Flybe's six remaining excess aircraft to use across the UK from March 2016. But bookings for the third quarter so far are at 51 per cent of the total seats, compared to 56 per cent the prior year, and passenger revenue per seat for the admittedly brief period are also down by 6 per cent year-on-year.
Analysts at Numis expect pre-tax profits of £3.3m for the year to March 2016, leading to EPS of 1.5p, compared to a £35.6m loss and a loss per share of 6.2p in FY2015.
| FLYBE (FLYB) | ||||
|---|---|---|---|---|
| ORD PRICE: | 92p | MARKET VALUE: | £198m | |
| TOUCH: | 91.5-91.75p | 12-MONTH HIGH: | 136p | LOW: 52p |
| DIVIDEND YIELD: | nil | PE RATIO: | 32 | |
| NET ASSET VALUE: | 78p | NET CASH: | £76m* | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 308 | -3.3 | -7.1 | nil |
| 2015 | 340 | 22.9 | 12.3 | nil |
| % change | +10 | - | - | - |
Ex-div: na Payment: na *Includes restricted cash of £8m | ||||
