Air Partner Share Discussion Threads

[onthemarblecliffs] 15/6/2020 10:35

SI13, You may be missing the dilutive impact of the placing on the returns of individual investors, as although the enterprise value of the company is unchanged, there is a significant dilutive impact on the value of individual shares. Your own investment performance is separate to the company's EV. As an example, if AIR achieves £10m of PBT this year (as a round number) then EPS would have been ~15.2p on the old share count. Assuming the £7.5m raised is used to pay down debt (saving an interest cost of 3%) then the new PBT would be ~£10.23m - but pro-forma EPS would now be 13p (14% dilution). Instead of the stock trading on 6.6x PE at 100p it is in fact going to be trading at 7.7x, reducing the upside for us shareholders. If you participated in the placing then the dilution is different but it still impacts on your personal IRR.
I am somewhat annoyed about the share placing but more worried that management failed to participate meaningfully. Institutional investors will only re-evaluate the stock through better performance over a period of time. Doing well for 12 months due to covid will otherwise be regarded as a one-off. I bought into AIR as a value stock with upside on better management execution - that remains the case.

[discodave4] 15/6/2020 09:48

Was talking direct earnings impact.Your post came across like you do actually want a second wave as your investment here will benefit.

[studentinvestor13] 15/6/2020 09:45

Well that's not true. The enterprise value next week would be the same for investors as pre placing at the same share price (net of small raising fees). But I know what you are trying to say around return on capital even if the maths isn't like that. Be nice if they get some US election work...

I'm also starting to think private jets could run at 50-100% up yoy off the normal level through the rest of this year regardless of second wave or not

[discodave4] 15/6/2020 09:39

Only if they get 18.75% return on the capital they invest........which isn't likely, given its to be used primarily to pay down debt.

[studentinvestor13] 15/6/2020 09:28

No one wants one but it will happen in my opinion.

EPS goes down but we get cash in so the value of the company is the same.

[discodave4] 15/6/2020 09:22

Wouldn't want a second wave for love nor money, this is decent value without wishing for more deaths.EPS estimates drop 18.75% tomorrow.

[qs99] 15/6/2020 07:59

Hope so without wanting any more deaths from COVID naturallY!

[studentinvestor13] 15/6/2020 07:52

In the last few days there have been a few signs of a possible second wave in several countries.

In the next couple of months we begin the gradual process of expecting a more normal second half for Air Partner of this fiscal year to a stellar one....

[qs99] 15/6/2020 07:30

& great link above to zero hedge about the Russian charter company making hay air lifting pigs of all things! Capacity down figure was huge, new normal of supply chains re-locating was also fascinating.....thanks...

DYOR

[qs99] 15/6/2020 07:21

Agreed, ignore those sort of posts.....!

Look forward to some update news from AIR following placing....IMO, the IR around this if I were i/c, would be placing, followed reasonably shortly by RNS outlining 1 at a time some good news around the 3 areas they said they were going to invest in....let's see....

DYOR

[pireric] 14/6/2020 16:25

It's just a spam link posted across ADVFN to try and build up a twitter following with a secured twitter account

Eric

[trident5] 14/6/2020 15:46

Aren't Goldman Sachs top picks just a list of stocks they need to unload next week?

[discodave4] 14/6/2020 14:04

Thanks SI, very interesting and led me to take a butchers (no pun intended!) at CWK.

[studentinvestor13] 14/6/2020 08:17

An example of another industry player winning

[janekane] 14/6/2020 07:23

What’s that about .

[discodave4] 13/6/2020 15:15

Note 8The following sensitivities have been provided in relation to SafeSkys, being the only CGU where the Directors believe a reasonable change in assumptions could give rise to a further impairment in value. Goodwill and other intangible PV assets Impairment Scenario GBP'000 GBP'000 GBP'000 -------------- ------- ----------- ------------ Base case 1,775 3,660 (1,885) Sensitivity 1 1,598 3,660 (2,062) Sensitivity 2 1,064 3,660 (2,596) -------------- ------- ----------- ------------

[discodave4] 13/6/2020 15:09

SISorry but not certain they have.From year end results note8 - Before recognition of impairment losses, the carrying amount of goodwill for Safesky was just over £3m, they impaired £1.9m in 2020 and mention potential further impairment (sensitivity level 2) in Jan 2021 of about £700k if I've interpreted it correctly (I originally thought 100% write off but it's not that much).My main concern originally was the amount of likely future impairments given they had significant exceptional costs last FY with 50% attributable to impairments (Whats excluded from underlying does need to be justifiable IMO as it can/does influence investors).Not worried anyway now having looked further.Thanks

[discodave4] 13/6/2020 14:48

trident'What seemed surprising was that he eventually unloaded here at a very low price.'That's what was bugging me, average buy was 110 and sold at 57, some loss that in anybody's world.Thanks though really appreciate the feedback and happy it wasn't sold for any other reason/s.One other fairly minor thing I've noticed from the long term share price action is that it is very cyclical, and price spikes occur roughly every 3 years, last one was 2017!.

[studentinvestor13] 13/6/2020 14:44

Welcome. Yes of course you are right but it does not impact adjusted EPS for any company which is how investors normally value things. There won't be a further impairment of SafeSkys though because the goodwill carrying value is gone.

[discodave4] 13/6/2020 14:36

Sorry, Safeskys! not Skysafe (dyslexic lol).

[discodave4] 13/6/2020 14:33

Thanks for the info, and trident, about Castlefields/KAL sell off.SI - Any future impairment of goodwill for Skysafe will impact profits though (wasn't on about cash), £1.9m last year and possibly more to come, but as I said not a major worry now.

[trident5] 13/6/2020 13:48

Buffettology had three small caps - Driver, Rev Bars and AP.

And KAL decided that he didn't want to own such small caps anymore (presumably because of the growth in the fund's size would lead his holding in these to become disproportionate).

What seemed surprising was that he eventually unloaded here at a very low price. It is a tenet of Buffett though that once he decides to sell he just gets on with it, pronto.