Hangar 8 Share Discussion Threads

[gargleblaster] 11/11/2014 16:41

Good call pastybap -here's Tommo

Shares in Aim-traded Hangar 8 (HGR8: 325p), one of Europe's largest operators of privately owned jet aircraft, have been firmly in the ascent since I recommended buying at 225p ('Ready for take-off', 12 May 2014). In fact, they have smashed through my upgraded target price of 300p ('Profit from an earning lift off', 2 July 2014) and hit an all-time high of 375p ahead of a bumper set of full-year results at the end of last week.

The share price advance is certainly warranted by the company's operational performance: adjusted pre-tax profits of £2.6m and EPS of 22p for the 12 months to end June 2014 represented a near-30 per cent profit uplift on the previous financial year. And with cash generation strong - operating cash flow pre-working capital movements jumped almost £400,000 to £2.3m - this lifted net funds up by a fifth to £4.6m, or the equivalent of 49p a share. Strip that sum out from Hangar 8's current share price of 328p, and the shares are being rated on an historic cash-adjusted PE ratio of 12.7. That's hardly a punchy rating for a company that is clearly benefiting from a strong tailwind. It is also one that will be paying out a maiden dividend of 2.3p a share in January.

The focus on heavy jets certainly looks a smart move as this reduces reliance on the more volatile, spot charter business and focuses the business on the more lucrative and faster growing intercontinental business air travel market. The Oxford-based company now has 47 planes under management, of which 27 are long-range heavy aircraft. Operating from 17 bases across Europe, the Middle East and Africa, Hangar 8 offers customers 12 different types of aircraft, including 15 super heavy jets (greater than 20 tonnes) that can fly up to 9,000km without the need for refuelling.

And given Hangar 8's customers generally sign up for contracts of between one and five years, this improves the quality of the company's revenue stream. In fact, contracted gross margin of £7.8m in the financial year just ended represented 87 per cent of the total.

Analyst estimates are now under review, but it's only reasonable to expect another year of decent progress. Also, small-cap income funds will now be able to buy into this growth story with a dividend on the way to add further support. So trading on a four point discount to the support services average of 17 times earnings, I would run your bumper profits. Hold.

[rivaldo] 11/11/2014 08:15

Cheers someuwin, and gargleblaster.

Good to see a Buy rec in the IC - no doubt it'll appear in Friday's print edition.

However, they appear to have muddled up their forecasts, basing the P/E for 2015 on the historic 22p EPS for 2014.

Cantor's most recent forecast for this year is 30p EPS, so that's a P/E of only just above 10.

Which makes their new 400p price target - a P/E of 13 - fairly modest given the growth.

I suspect it gives them room to increase further after more acquisitions or on another trading statement.

[someuwin] 11/11/2014 07:20

Cantor reiterates BUY and issues new 400p target.

11 Nov 2014
Hangar8 HGR8
Cantor Fitzgerald
Buy
Old target -
New Target 400.00
Reiterates

[gargleblaster] 11/11/2014 00:50

Good hammer formation in place. Should bounce Tuesday.

Here's the IC piece

Global jet-setters are clamouring for private planes capable of flying long-haul. Satisfying that demand helped private-plane operator Hangar 8 (HGR8) grow its operating profit by 29 per cent in the year to 30 June.

Hangar 8 took on the management of four more "heavy" aeroplanes, which can fly farther than lighter models, taking the total to 27 of its 47 aircraft. The result was a 26 per cent rise in revenue at its aircraft management and logistics division to £54m.

The group's goal is to secure more long-term contracts, diversify its services and expand internationally. It has already internalised engineering services, such as maintenance and planning, and now offers them to other aircraft operators. And it widened its European footprint by purchasing charter operator Oasis Flight Malta.

Hangar 8 benefited from strong corporate demand for flights to troubled countries. It completed almost 1,500 charter flights - up 51 per cent - which sent charter sales soaring more than a third to £6m. The group also added a Bombardier Challenger outfitted with medical equipment to its fleet, and plans to introduce a long-range aircraft capable of transferring Ebola patients safely.

Hangar 8's shares trade at 14.5 times forecast earnings for 2015 - a "modest premium" to the wider market, says broker Cantor Fitzgerald, which has put its forecasts under review.

IC VIEW:
Hangar 8 is growing sales and profits, and its broader range of services should support further growth. Its shares are up two-thirds since our buy advice (197p, 17 Jan), but we expect them to climb further. Buy.

[macarre] 10/11/2014 20:05

Nice shooting star today. Trend line providing good support, making me more positive about share price Got high hopes for tomorrow.

[pastybap] 10/11/2014 16:23

Definitely seen the bottom of this one. Buy reiterated on Friday in IC, and expect Simon Thompson to update his recommendation soon, which usually gives it a kick up the backside.

[ayl30] 10/11/2014 15:29

Thks gorilla, at least its got back to where it started today

[alphatrend1] 10/11/2014 15:08

Nice shake out below £3, the 50dma and bottom trend line, bouncing back above all three, bottom is in imo.

[gorilla36] 10/11/2014 10:45

Ayl30 - I suspect a lot of traders got in, in the last month in the expectation of good results, which were duly delivered. This interest forced the price up really quickly in October. Those traders have now moved on to pastures new, so I would expect the price to stabilise around the £3 mark. The up trend from April this year is still intact so I would expect a gradual resumption of that upward curve. Just my opinion of course.

[ayl30] 10/11/2014 10:38

Good results , but now a continual decline. Any reason, I cant see why?

[rivaldo] 09/11/2014 19:17

Cantor reiterate their Buy rec:



Agreed Igoe14 - we're already almost halfway through this year in which HGR8 are forecast to achieve 30p EPS.

Plus we may get further acquisitions from the cash pile.

Plus HGR8 will presumably benefit significantly from (1) the fast-dropping price of oil and (2) the increase in spot charter usage.

[igoe104] 07/11/2014 09:27

The company had may as well come in EPS 12p, don`t think the share price could have done any worse? Or if EPS was 32p it would have still tanked, folks had it in there heads to sell what-ever the results.

Anyway it`s only a matter of time before it creeps past pervious highs.

[michaelwhight] 07/11/2014 09:16

All this good news is bad news.

[igoe104] 07/11/2014 08:28

Pamalajane how can the valuation be high when the p/e for june 2015 is less than 11,and a 4.6 million cash-pile.

I can never understand the mentality of short term-trader`s it would surely make sense to take a profit of the penultimate day of results ?

[igoe104] 06/11/2014 23:00

Hangar 8 PLC’s Buy Rating Reaffirmed at Cantor Fitzgerald Europe (HGR8)

[pamelajane] 06/11/2014 19:11

Could it be the fall is to do with the fact the valuation is high? 22 x PBT to MCAP for a relatively small Aim listed company that's only just started to pay a dividend.

[michaelwhight] 06/11/2014 08:46

Well my top up showing as a sell but I wasn't able to buy at the bottom. I'm expecting a good recovery from here.

[rivaldo] 06/11/2014 08:41

Bouncing now. The MMs taking advantage of a few results-day profit-takers is all that happened.

Remember that we're already almost halfway through the current year!

Which is forecast to make 30p EPS - a P/E of only 11, and probably only 9 or so taking into account the cash pile.

It's bizarre that a stock like IGP, which also reported today, has a £55m m/cap despite moving back into losses, whereas HGR8 has just a £33m m/cap even after its recent rise. The stock market never fails to surprise me.

[adamb1978] 06/11/2014 08:40

People focussing on headline EPS rather than adjusted or forecast?

[twirl] 06/11/2014 08:33

Normal for a fall on results day.

Hard to buy any online so mm's probably taking stock to return to those who have lent stock over the last month - will be interesting to see if Directors buy today.

[igoe104] 06/11/2014 08:21

Looks the trader`s are jumping ship.
some folks are hard to please.

[brownie69] 06/11/2014 08:21

SP getting hammered now. I though results were OK v expectation but someone doesn't like them.

[adamb1978] 06/11/2014 07:59

Yes, very strong set of results. Look very good.

My only two gripes from a quick flick through:
- I'm not an accountant but I dont particularly like their change in revenue reporting. It more than doubles turnover but including rechargeable expenses.
- Stripping this out, gets to my second one concern which is that gross margin in H2 fell to 34.4% from 39.2% in H1. Not sure at the moment the reason behind this...

Still I think they did about 12.6p EPS in H2 alone, which was a lot stronger than H1 so 30p looks a comfortable estimate for the current year. Given the growth and balance sheet, the multiple looks quite undemanding. Annoyed I took some money of the table in the October market jitters!

[igoe104] 06/11/2014 07:33

A lot more upside over the coming year/year`s, I won`t be selling any of my shares for for a good while yet.


Positive outlook

We entered the current financial year with a great deal of optimism. The decision to move away from our more traditional, but volatile, spot-charter business and the implementation of our strategy to focus on heavy jets and diversify our service offering now has real momentum. We have continued to grow the quality and visibility of our future earnings by focusing on long-term contracts while benefiting from a more positive economic and market outlook. This leads us to look forward to the current financial year with confidence