Member Info for Beo1

Its no coincidence that EZJ see this and are trying to grow that side of the business. Considering the backlash on the plane procurement. Imagine getting most of your earning from low capital parts of the business. Obviously not privy to the commercial aspects but I assume they are just taking a cut of any business they throw at hotel's perhaps taking on the credit risk. but very little capital required there.

Im not disputing the scale and poor messaging of this procurement is the reason behind the drop. People interpret things badly in the shades of grey.

EG only 157 of the 257 are definitive orders, so not all the $19b is 100% committed capital. more like 60% of it, the remaining 40% will likely be only order on the back of the P&L performance / growth being achieved, if we achieve that £1b profit number then that in part pays for the additional 100 planes. The problem is you are guessing one thing, I am guessing another and all thats 100% correct is that we are both probably wrong. So that in itself causes the SP movement we have seen. In the absence of better information people will air on the side of caution and that caution makes the FCF / future SP worse that it might have been with the more information

Plus on current performance they are looking at free cash flows of approx £500m per year x 5 years before the first planes need paying for, plus the fact some of these are replacement planes, so yes we'll probably sales & leaseback them and pay monthly lease costs but the airplanes they replace will stop having lease payments means its not as an extreme picture as your painting. The issue it the unknowns, we dont know the incremental cost of new vs old in the cashflows, so brokers guess it and they appeared to guess at a pessimistic view

They had £40m net cash at he H1 point. Since then they have generated a profit in Q3 of £203m and a profit in Q4 of £650m. Add back non cashflows and I'd guess the net cash position at Y/E is nearly £1b now

Unfortunately, aviation is a high captial intensity business and safety goes a long way. Airplanes will have a finite life and need to be replaced. They benefit by the company create an ROCE on that investment that exceeds the cost of capital, which it will. Thus the cashflows either stop because the planes become obsolete or they generate a return on that capital. Its no different to any company, can I generate a ROCE greater than cost of capital for this investment? Yes go for it, No? return the money to the shareholders

3.9m volume sent it up

Suddenly gone from 1% down to over 1.5% up, whats the score?

Not quite, but it looks like it has some upward support but the overall FTSE downward pressure is forcing it back down

I agree the projected FCF has took a hit with the plan for new planes. But i think your reading of the current situation is wrong. It would be silly to hold 100% equity in the planes, in nearly all instances debt is cheaper to finance than equity. and there paying down of debt recently shows its manageable.

Time in the market beats timing the market.

If EZJ deliver on the future profit guidance then the SP will move up. 1b of profit puts it on a pe of 3. No chance SP stays at these levels as results deliver on the guidance

Reminder of my comments. NO ONE CARES. You've shown numerous times that you don't have a clue what your on about. Like most people, pension funds hold stocks for more reasons than Dividend Yield. They are about creating value over x years. So if you see value in the medium term why wouldn't they?

Not sure how we can beat or miss a EPS now? we have issued a Q4 update saying profit will be £440m to £460m for the full year. Shares in issue is a pretty matter of fact number at 758m shares. So maths tells us the EPS as told to us by EZJ themselves will be between 56p and 62p. Anything outside of this range makes no sense given the Year is over and they have provided the market with the profit range

Or is there one off's in the H1 loss that will be stripped out in the adjusted EPS?

Where do you get 89p though. Consensus is £440m to £460m for the full year isn't it. HL has shares in issue of 758m so thats and EPS of 58p to 62p. Which still puts on a PE ratio of 6. Which seems very low even with the industry risk

Seriously SK you should keep quiet. every time you open your mouth you show your lack of knowledge

EPS and Dividends are totally 2 seperate things. The EPS is Profit / Shares in issue.

Disappointingly that didn't last long.

Go on then. Share your pearls of wisdom! Or just come on to moan?

So from your perspective only downside risk on TUI SP? IE they reward the shareholders as you want and the SP stays flat, or they go the more prudent route like EZJ and the share price tanks the same, seeing as thats what you think drove the SP drop?

You keep spouting the same thing and your wrong. There is very little chance the borkers / MM's / Analysts sliced 10-15% of the SP for the sake of 2 to 3 months timing on a dividend, THAT WOULD NEVER HAVE BEEN DECLARED AND PAID IN A TRADING UPDATE!

And those who do value holidays over other things, if your looking to then make it cheaper your going to look at the no frills option over the more expensive providers. IMO