Flybe Share Discussion Threads

[wanttowin] 08/7/2016 18:52

Good post KMann, imo for what it is worth the share price here is little short of ridiculous. Cash value of the company is nearer 80p, and despite having a large holding I will be adding again early next week. My funds not come through yet, so missed the 35p opportunity today. With hindsight my top up at 49p before Brexit was a mistake, I was convinced we would vote in and see a bounce but hey ho.

[salpara111] 08/7/2016 17:16

A 20p target does seem a little extreme as it is really saying that you are pricing for bankruptcy.
If it gets to 30p I think I will take a stake as it is pretty much option money at that point.

[kmann] 08/7/2016 11:04

worth a read, from pre results, but makes note of the fuel and currency hedges through to 2017 ...

Flybe (FLYB) has seen its share price fall steadily since the start of the year, and at close to 12 month lows I definitely think it is worth another look.

Its trading statement, released at the end of January, sent the shares into a spin and has seen tyhe share price drop from the mid-80s to the current level of around 56p and a market cap of just £125 million.

The company has had its share of problems in recent times, including having hedged at high levels prior to the collapse in fuel prices, plus its Project Blackbird was costing £26 million per annum, but that finally ended last November when the company decided to keep on six of the Embraer E195 jets and use them on existing routes to replace old aircraft. The cost of doing so has been significantly reduced as well, costing £20 million for 2015/16, £10 million the year after, and dropping to £4 million by year four.

Given that at the last set of financials for the six months up to the end of September 2015, the company made a net profit of £26.8 million, with an operating profit of £21.9 million, the current market valuation would seem to be on the low side, especially as it is reducing its costs and liabilities – in March the company bought three planes for $34 million as part of its plan to move to outright ownership rather than leasing (at a cost of £37 million for six months, as per the interims).

It doesn’t have huge amounts of debt, with around £111 million in total at the last accounts and only £12.4 million of that as a current liability (£6.4 million loan repayments were made during that six month period as well), and total finance costs of £1.3 million for the period.

At the end of March the company still had cash and equivalents of £171.3 million, so is in a strong position there.

The latest trading update also didn’t have any nasty surprises and mentioned that full year results to the end of March 2016 were expected to be in line with expectations, despite events such as the Paris bombings causing temporary blips in passenger numbers. The forward looking statement for the coming summer showed that additional seating allocated is being sold as planned, with 21% already sold by the start of April and with a 17% increase in capacity compared to 2015.

The company has also hedged 90% of its 2016/17 fuel and currency exposure, which reduces any risks on that front and makes up a big chunk of its annual costs, at around $120 million for fuel and $315 million in US Dollars, even though the subsequent rise in the Dollar has so far impacted operating costs by £7 million since the start of the year – that could all change though and could look a good move in months to come!

In the past Flybe has been quite heavily shorted, but currently there are no notifiable shorts in excess of 0.5%, plus a number of institutional investors and funds hold fairly large amounts of shares.

There are still plenty of risks with this company as it is in a very competitive market with tight margins, meaning it wouldn’t take a lot of bad luck to return to making a loss again, but at the current market cap I view that as a risk worth taking due to the potential upside. The last time this company recovered from a big dip the share price quickly headed back to the 90p area, and I see no reason why it can’t do so again as long as things go to plan.

[kmann] 08/7/2016 10:49

Noticed the hsbc 20p (from 30p, did they read the same results?, they could be a pound out imo!), now that is priced to go bust cheap. Could be overly cauatious. Looks like a worst case scenario price (remember the banks, oilers, miners getting doomsday target prices). I think we should all thank hsbc for a short siren call. Fun starts when shorts start closing.

[bulltradept] 08/7/2016 10:03

Really? Any links please. That would possibly explain the chunky sells going through this am then from frightened PI's.

[ayl30] 08/7/2016 09:55

Read that HSBC have called this at 20p?

[bulltradept] 08/7/2016 09:29

Why 30p why not 25p

[kmann] 08/7/2016 09:16

waiting for 30p or better for a truly nuts valuation. Being short sold.

[bulltradept] 08/7/2016 09:09

Getting slapped again!

[kmann] 08/7/2016 08:24

Keep nibbling

[onething] 06/7/2016 16:03

I've joined the party today. I see a good chance of a significant profit.

[sandoval] 04/7/2016 17:11

600% rise in bums on seats from Cardiff and increase in flights from Belfast announced today. Not overpriced imo :)

[luckymouse] 02/7/2016 12:26

If the momentum lifts - buy it - it the base breaks exit

free stock charts from uk.advfn.com

[muffinhead] 02/7/2016 11:16

AGM resolution
The proposed Reduction of Capital will involve the cancellation of the amount standing to the credit of the Company's capital redemption reserve in the sum of £22.5m


Digitalook has dividend pencilled in for 0.44p this year which which leaves a lot of money for "reserves to support the allocation of Ordinary Shares under the Company's share schemes."


comments?

[kumala] 30/6/2016 11:20

Flybe along with others in the sector have taken a bashing over recent months...the tide will turn as it always does. Patience is required.K

[kmann] 30/6/2016 10:01

Been buying Flyb, thought results showed promise. Could be a significant rise to the upside.

[amorruso] 28/6/2016 15:10

The problem with FLYBE at present is that there are no directors buying which is strange considering that they bought at far higher levels a couple of years ago.

[sandoval] 28/6/2016 14:54

Really need a chart showing to 2019 :)

[bulltradept] 28/6/2016 13:22

Not sure, there is value here though as others have suggested.

[lw425] 28/6/2016 12:58

Red close?

[bulltradept] 28/6/2016 12:46

Think it's very much the uncertainty:

Routes to Europe, Fuel costs, possible (more £) devaluation, is Flyb going to be welcome in Europe etc etc..

This should be chart support, but things have now changed.

[sandoval] 28/6/2016 12:04

Down 2/3rds in 6 months which makes it even better buy imo unless it really is the end of the world. Excellant analysis to dwell while we (or just me) wait for reality to return

[billiam] 28/6/2016 08:37

Now down over two thirds compared with 18 months ago, despite company successfully working through recovery plan.

[luckymouse] 27/6/2016 22:46

Loving the tractor :)