Air Partner

HOLD

14/10/2011 Ben Jaglom

Amidst a number of 'unusual trading circumstances' aircraft broker Air Partner (AIP) grew sales by £52m to £282 million for the year to July.

The fully-listed group reports pre-tax profits of £5.3m (2010:) for 2010-11, which it ended with cash down by £4.5m to £7.2m. Earnings per share grew from 26.4p to 32.5p and Air Power has upped the total dividend for the year from 15p to 16.5p per share.

Chief executive officer Mark Briffa notes that the 'unusual circumstances' Air Partner benefited from included the Arab Spring, which saw a number of governments and companies turn to the group to help broker flights out of those countries involved in the turmoil. Briffa remarks 'We were involved in carrying out evacuations in countries including Bahrain and Libya' in addition to flights for those affected by the tsunami in Japan.

On trends in the airline industry itself, Briffa maintains that 'You are seeing a number of customers downgrade from using a medium to large sized jet to a small jet'. He adds there is also a 'Big focus on customers trying to save money'.

Analysts at broker Peel Hunt are forecasting pre-tax profits of £5.1m (for earnings of 34.9p a share) on revenues of £258.6m for the year to July 2012. In 2013 profits of £6.4m (for earnings of 45.2p a share) on sales of £300.5m are penciled in.

Shares in Air Partner have sunk from a 2011 high of 520p to 335p as investor confidence in the companies involved in the airline business has subsided. A debt-free, dividend-paying company, Air Partner has a number of strengths. However with the airline industry as a whole experiencing considerable pressure the shares face a considerable downside risk. Hold.