A sharp drop in demand, oversupply of planes and fierce competition made this a tough year for Air Partner's (AIP) core commercial jet broking business. With no Arab Spring or Japanese tsunami to boost demand, profits there halved. Still, cutting costs and poaching key staff from rivals is paying off and the numbers weren't as bad as some analysts had feared.
Ignore £0.9m of one-off credits and Air Partner's pre-tax profit fell 44 per cent to £3.2m. Just £1.6m of that came from commercial jet broking compared with a record £3.3m in 2011. However, revenue from private jet broking grew 8 per cent to £44m, driven by brisk business in the US where turnover soared by two-thirds to £9.2m. The company's all-inclusive JetCard scheme should underpin growth in the region, and in continental Europe, too, where management expects to grow sales fast and dramatically increase its 2 per cent share of the £650m market - new, well-connected recruits in Spain and Russia are already generating business. Bosses also want to replicate a local partnership in India across high-growth markets within Asia and South America. A drive to fly more oil workers should help, too.
Having trimmed forecasts by 5-6 per cent, broker Oriel Securities now expects current year adjusted pre-tax profit of between £3.7m and £3.8m, giving adjusted EPS of around 23.5p-24.1p (from £3.2m and 21.3p in 2012).
AIR PARTNER (AIP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 262p | MARKET VALUE: | £27m | |
| TOUCH: | 260-265p | 12-MONTH HIGH: | 345p | LOW: 230p |
| DIVIDEND YIELD: | 6.9% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 137p | NET CASH: | £15.7m | |
| Year to 31 Jul | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 251 | 9.24 | 62.6 | 30.0 |
| 2009 | 187 | 5.64 | 45.9 | 30.7 |
| 2010 | 230 | 2.73 | 26.4 | 15.0 |
| 2011 | 282 | 5.26 | 32.5 | 16.5 |
| 2012 | 228 | 4.14 | 29.1 | 18.2 |
| % change | -19 | -21 | -10 | +10 |
Ex-div: 14 Nov Payment: 14 Dec | ||||
