(Alliance News) - Although Air Partner PLC is on the way to surpass market expectations on profit for its soon-to-end financial year, there are still doubts on whether the stronger trading will continue long into its next trading period, Canaccord Genuity said on Friday.
For the year ending January 31, the Gatwick, England-based aviation services firm expects underlying pretax profit to be materially ahead of market expectations, as a strong performance in the second half to date was bolstered by high levels of Freight bookings in December.
In mid-December, Air Partner also pointed to high Freight bookings as the reason for the strong second half results, in addition to strong levels of trading in the Private Jets division in both the US and UK.
However, tour operators, automotive and meetings, incentives, conferences and exhibitions activities have not yet returned to pre-pandemic levels.
In light of this, Canaccord Genuity raised its own forecast for Air Partner's pretax profit to GBP8.6 million from GBP7.8 million, even though this still marks a 26% drop from the GBP11.6 million reported the year before.
The broker still remains cautious over the limited duration of strong Freight bookings, season supply chain disruptions and Covid-19 vaccine shipments, judging by its unchanged outlook for its next financial year.
"However, charter brokers benefit from volatility and supply chain disruptions. So, continued commercial airline long-haul schedule changes mean the unclear and unpredictable belly-hold capacity of long-haul flag-carrier network airlines combined with supply chain backlogs could create future revisions for the Freight charter broker sector," Canaccord said.
"Our caution on freight is balanced by recently deflated expectations for airport traffic in Q1-22E, which could dampen the Safety & Security market outlook. As Covid-19 becomes more endemic than pandemic this outlook could improve as airport demand lifts."
Air Partner's shares were up 2.3% at 88.00 pence on Friday afternoon. The stock is up 27% over the past 12 months.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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