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Amadeus' revenues have been hit but it says it will resume paying dividends
July 2, 2020

James Dow, co-manager of Scottish American Investment Company (SAIN), explains why he continues to invest in Amadeus IT (AMS:MCE) despite its involvement in the tourism and travel industries.

“Amadeus is listed in Spain and is the leading provider of software to the airlines industry for functions such as ticketing and baggage [handling],” said Mr Dow. “Its revenues have taken an extremely big knock in the past few months so it has paused [paying] dividends.

When you’re an income investor you have to consider what you are going to do with such holdings. We’re taking the long-term view and considering what is going to happen on the other side of [the coronavirus pandemic]. Do we think people are going to fly again? Yes we do. Do we think that Amadeus is still going to be a really strong business on the other side of it? Yes, and that it is going to come out of this even stronger than it went in [against] its competitors.

And Amadeus has said that it’s going to resume paying dividends.

So despite what an extreme event it’s been through we’re going to hold onto it because in the long term we think it is still going to do very well.”

Amadeus accounted for 0.6 per cent of Scottish American Investment Company’s assets at the end of April.

Amadeus IT provides a computerised reservation system for booking airline seats, hotel rooms and travel-related services, and technology solutions that automate core processes for travel providers. Its customers include airlines, hotel managers, rail operators, cruise and ferry operators, travel insurers and car rental companies. Although Amadeus IT is listed in Spain it operates globally through subsidiaries in Europe, the Americas, Asia, Africa and Australia.

 

Also read our interview with James Dow, co-manager of Scottish American Investment Company