Esken Share Discussion Threads

[1kevinm] 29/10/2021 12:10

Heathrow have annouced they want to increase passenger costs through Heathrow Airport. Southend howver is low cost airport into the South East from Cambridge down to Kent. It is a popular airport with passengers due to the transport links into London. More importantly it is not on the motorway system and avoids the hold ups and delays that on the Motorway to Heathrow and also Gatwick. Although Ryanair and Easy Jet have yet to announce the flight schedules for 2022. There are other low cost airlines that this would be very attractive. Wizzair (who are exapnding)and also jet2 are likely candidates. As big hairy spider said Southend has city status and locals also hope this will bring added business. The South East is home to a large group of the Baby Boomer Generation. They support heavily thh low airlines out of season

[bighairyspider] 28/10/2021 15:42

We've just stayed at the Southend Airport hotel which appears to be booming. This overlooks the runway and the views are pretty impressive. There is a retail park to one side which is just as busy. BA has aviation parts manufactured nearby, and rumours locally suggest they are interested in investing further. Now that Southend has city status locals also hope this will bring added business. That said the airport looks like a ghost town, We saw a couple Ryanair flights land, but other than that just a scattering of light aircraft dotted around. All the aircraft parks and embarking areas are empty, same with the car parks. Shame as it looks a thoroughly modern airport with a rail link to London literally sat at the end of the terminal.

[lpavlou] 02/10/2021 12:01

As far as I can work out it's only Ryanair using Southend at the moment serving 6 destinations and their final flight is the end of October.

[fenners66] 01/10/2021 23:59

Energy making a small profit , aviation losing a fortune ?
Where are head office costs ?
Included or charged separately ?

[lpavlou] 30/9/2021 20:57

You know when they start an RNS with the Energy division, it's not going to be good news, but shows it's the most valuable part of the business at the moment. With Furlough ending today, I imagine they have made staff redundant given they are closing the airport for 6 months. They need to start striking deals now for summer 22 or the cash will run out.

[thepiedpiper1] 28/9/2021 12:19

It just keeps giving

[john09] 27/9/2021 19:12

Bowl forming?

[thepiedpiper1] 27/9/2021 16:24

Wow glad I bought more below placing price

[dominiccummings] 27/9/2021 10:14

Just bought in @15.7p

[toptomcat] 27/9/2021 09:10

Editor of SCSW certainly thinks so

[nw99] 27/9/2021 08:49

Time to buy

[lpavlou] 18/9/2021 14:08

Would have expected a small bounce yesterday given the relaxation of COVID travel rules.

[gaffer73] 13/9/2021 09:14

Spread is only .25p at the moment. If they did a 10 for 1 consolidation the spread would be about 5p

[lpavlou] 09/9/2021 14:49

Half penny spread on 12p is worse compared to 1p spread at 120p. On the former you need a 4 per cent increase just to get your money back.

[gaffer73] 08/9/2021 10:26

That would widen the spread

[lpavlou] 08/9/2021 09:14

They have to reduce the share count now as the spread is just too wide. I expect a 10 for 1 consolidation is necessary.

[stockriser] 07/9/2021 15:26

It's not huge at all compared to the fall!

[lyceeuk] 07/9/2021 15:22

Why the huge rise??

[fenners66] 03/9/2021 09:20

Agreed.
Only "the recovery" is to get back to 2019 loss making...

[lpavlou] 02/9/2021 19:42

Ryanair now focusing on Stansted for its new routes. There will be plenty of capacity at Stansted, so will delay the recovery at Southend. Management need to do a deal with Wizz Air to replace the EasyJet and Ryanair flights quickly or the recovery will be 2 years plus away plus more fundraising

[gaffer73] 02/9/2021 14:16

The BOD must be confident of getting the share price to 22p.

[lpavlou] 01/9/2021 17:55

Nothing to lose by giving away 6m shares to management. No recovery insight though for Southend and can't see much travel in 2022. They are going to need to drastically reduce their charges for airlines to use the airport and hope to take some cash off punters in the departure lounge.

[tomtum1] 31/8/2021 12:56

Peach excellent analysis, I agree, We just need a little momentum on travel. I'm a firm believer people are mad to get back on their holidays again.

[peach] 31/8/2021 11:26

Similar to tomtum1, I also bought recently.

My thinking is that is looks like an interesting set up: 1)at 14.5p mkt cap is c£150m ; and underlying NAV looks to be around £380m.
Tosca and Harwood are large shareholders that have recently participated in new issues so appear committed and motivated for realisations. Carlyle put in £120m for a 30% stake on London Southend airport. This released £100m to ESKN to pay down debt which together with the equity raise pretty much clears net debt. But it also points to the value of the airport being at least 280m for ESKN's remaining 70% share. Carlyle will be looking for a lot of upside and probably saw ESKN as a distressed seller here so the £280m should be conservative. The energy division has long term contracts and is returning to normal cashflow of c £20m. ESKN was going to sell this but decided to retain and do the capital raise. Makes sense, as the cashflow is needed to support the airport cash burn in the near term. I have no idea how to value the energy division but have stuck a 5x multiple on the £20m of EBITDA expected this year for a c £100m value. Given long term contracts it could be conservative. There are legacy liabilities (c 31m) taken on from some plane leases etc and some non-core assets (book value c40m) such as Carlisle Lake District airport etc. I'm assuming these broadly net out. Management set out a conservative cashflow forecast looking out a few years and they assume they get to some modest net debt (less than 1xEBITDA on energy division) a few years out. If they are able to sub-lease any of the planes there will be upside to this. So, this looks like 2.5x upside to fairly conservatively valued assets post a corrective equity raising, with motivated shareholders and a strong operator joining the equity of the airport. Interestingly, management noted Carlyle has been involved in more than 50 airport transactions so know their stuff and see an angle here. Also reading the notes on the deal it shows ESKN has drag rights on the airport but Carlyle will only permit it if they get something like a 3x return.... . There are clearly risks here around cash burn while there is a return to travel and how quickly the airport can replace airlines that have ended their slots at the airport. But Carlyle are aware of this and still closed the deal.