January 11, 2024
Readers of this website will know Air Partner mostly for its fixed-rate jet card and on-demand passenger private jet charters.
However, a spike in its freight business charter business has caused the U.K.-based aviation services group to provide a trading update just three weeks after its last report.
In the positive development, the company noted, “As a result of continued strong customer demand throughout December, the Board of Air Partner now expects that underlying profit before tax for the 12 months to 31 January 2022 will be materially ahead of market expectations at the time of the December 2021 trading update.”
According to Air Partner, “December’s performance has again been driven by high levels of Freight bookings, notably for the continued transportation of vaccines.”
The group’s cash position “remains strong” with net cash of £12.9 million, up from £9.8m in July. The figure includes cash held in a separate account for prepaid jet card deposits.
Air Partner stock price
Analyst Canaccord Genuity writes, “We now project FY21/22E PBT of £8.6 million – up 10% from our previous forecast £ 7.8 million). Our 2023E PBT and EPS projections are unchanged so we see 2023E EPS 38% great than FY20 EPS pre-COVID-19 despite a 20% dilution from new shares issued since with quality EPS from FCF (average about11% FCF yield FY22E-24E) and RoE over 22%.”
While continuing to rate Air Partner as a buy, the analyst notes, “[C]ontinued commercial passenger airline long-haul schedule changes (e.g. Cathay Pacific and Lufthansa Q1-22 cuts) mean the unclear and unpredictable belly-hold capacity of long-haul flag-carrier network airlines combined with supply chain backlogs could create future revisions for the Freight charter broker sector, in our view.”
Looking ahead, Canaccord says, “We think that longer-term the shares could then achieve greater than 240p – as the PER re-rates upwards.”
I closed yesterday at 90p. Canaccord’s current target is 120p.
