Overcapacity still blights the commercial jet market and sales visibility is poor, but it's still making lots of money for Air Partner (AIP), despite a drop in revenue. With a tight grip on costs, underlying pre-tax profit grew by 8 per cent to £1.33m in the first six months and, now in the seasonally stronger second half, management thinks it will make the £3.8m of profit and adjusted EPS of 23.8p forecast by broker Oriel Securities. That not only underpins the dividend, but justifies our positive stance, too.
Less work from the Ministry of Defence and in the troubled eurozone explains the 11 per cent drop in Air Partner's income from commercial jets to £65m. Still, the US presidential election helped increase revenue in the US by almost a third and the division's profit actually rose 14 per cent to £719,000. Air Partner is flying more oil and gas workers around, too, and contracts with a number of European tour operators, including Club Med, will boost the bottom line this summer.
So will the private jet broking division if the first half is any indicator. Revenue there rose 12 per cent to £22.7m and profit soared 30 per cent to £431,000, driven largely by business in the US, France and Germany. In fact, selling another 17 of Air Partner's all-inclusive Jet Cards to well-heeled clients added £2.6m to its cash pile.
AIR PARTNER (AIP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 324p | MARKET VALUE: | £33.4m | |
| TOUCH: | 315-333p | 12-MONTH HIGH: | 359p | Low: 230p |
| DIVIDEND YIELD: | 5.8% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 136p | NET CASH: | £17.3m | |
| Half-year to 31 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 120 | 2.26 | 14.8 | 5.50 |
| 2013 | 102 | 1.33 | 8.0 | 6.05 |
| % change | -15 | -41 | -46 | +10 |
Ex-div: 31 Mar Payment: 26 Apr | ||||
