Member Info for DrMaze

More than this? What else can create a spike like that?

The big question is: is this really MSC or someone else and, more importantly, what is the offer?

Surely it is not about the 32 (come on!) shares bought by Jarvis yesterday..

According to Google AI:

IAG 2019

shares 1,800mil, net profits 1700 mil euro, EPS: 0.95

IAG 2025 (based on guidance for 2025)

shares 4,900mil, net profits 3300 mil euro, EPS: 0.67

EZJ 2019

shares 397mil, net profits 350 mil £, EPS: 0.88

EZJ 2025 (based on guidance for 2025)

shares 751mil, net profits 525 mil £, EPS: 0.69

IAg has a net debt of just over 5 billion euro, EZJ net cash of 800 million £.

According to AI, so DYOH and all that.

What a carefully crafted amount of rubbish.

If one digs into actual numbers, they would see that earning per share are indeed almost equal to 2019, while the SP is 50% lower. In the meantime, cash position is substantially improved, and there is still growth in EZJ holidays (plus further efficiency from new fleet etc). So those who bought on this fabled "post-covid bounce" you seem to mention so often were actually right from a business perspective.

Then suddenly in late 2025 people notice there is inflation! (and average wage growth still higher than inflation): exactly when inflation is no longer increasing and you actually were discussing deflation only this morning. BTW, good thing people did not notice inflation back in 2022, when it got to 10%...but incredibly EZJ survived. Imagine that. Actually, they kept growing as they said they would.

You have been saying the same story for years. Please find a new story.

Finally, even if it goes sub £4 (IF), there are no losses until you sell.

At that level EZJ would be a couple of years away from buying itself in net cash. Happy to increase my position if we get there.

If we ever get deflation, which is almost impossible, then rates are going to go so low and oil prices as well that such period would be the greatest time ever to hold EZJ. Can you imagine a situation where the so-called cost of living crisis stops? Or where government debt (and pensions) linked to inflation stops eating public expenditure? Amazing. Won't happen though.

Major risks here are the AI bubble popping, and dragging all down (even companies doing well and real things), or Putin stupid provocations.

Removing these macro aspects, the key question is why EZJ is moving between 450-550, rather than 550-650. That is the main issue here. Not a proble going through business cycles, but not fun to do so with a structural undervaluation on your head. Again, IMO, the board needs to think about how to change this perception in the market (partly connected to how easy it is to game the SP here). But I do not think they care too much about shareholder value.

The world is not going to end this winter (unless a couple of imbecilles decide to go there...).

First, what a joke.

Second, I would downgrade JP morgan. I mean, if they make forecasts so badly that they need to adjust it that much, they should just change jobs.

I suppose they have the same analysts that were following RR...

Great, more of this.

Plus Ryanair reducing flights to Spain.

Thank you.

Pity there is oficially no growht in the UK now, but I suppose this should be already priced in (or people are asleep).

Xhita, of course you are right re: Jet2, I should have been more precise, but my point largely remains the same: since Covid lows, they have increased significantly, not to talk about before Covid levels. Us, not so much.

More importantly, my point is not about a buyback as a magic bullet but as a message on confidence on future profitability (whereas stressing a few days of strike on results day as “very, very disruptive” does not inspire much confidence, even if technically true: we all know, why stress that so much?). Certainly I would not change the CEO. Imagine the panic. But at the same time, more of the same is not going to work well either.

What I am trying to say is that the business is doing well and the plan seems quite promising (which is why I am here), but for some reason the market either does not believe they can do it, or does not understand the plan.

Otherwise, how do you explain the incredibly low P/E and SP given the EPS that we currently have (and in theory should increase further given the growth plan mid-term)? EZJ is currently priced as if it were a mature company with no profit growth possible. I would argue we have more growth potential than many other 'peers'.

The board should think about what is missing here. Something is.

Or maybe I am the one missing something. Ideas to help me understand are welcome.

The BOD should not only manage the business, but also return value to shareholders (and I assume no one is here for a 2% dividend).

If the company is performing well (the business is, in line with expectations etc), but the SP is half of what it was before Covid (adjusted for number of shares) - with now almost equal EPS -, and with various competitors close to all time high (or external fears only matter for EZJ but not Jet2, RYAAY and IAG?) then the BOD should think carefully about what they could/should do better. In a listed company, the job does not end with running well the daily business. It is more than that.

Completely agree.

One thing is to run the business well, another is to run a listed company well. We get the former, not the latter. For a company like this, you have to have both. The current situation is just stupid. Cannot continue like this.

Yes, consumers are cutting back and the SP of airlines therefore have to fall: this is why IAG fell 0.18% (because they sell cheap flights, right?), WIZZ fell 0.4%, and even TUI fell 1.25%

Apparently, the only consumers that need to cut back are those flying EZJ (and Jet2).

Or maybe it is about EZJ holidays that are not going to grow as expected? Wait, that means that the SP before today was pricing in such growth. Right. Got it.

Our best hope is for EZJ to be bought out by EZJ. Management, use the cash to send a signal to the market that profit is very good, and you believe it will continue to be so!

First the minor point: the comparison regaridng inflation is not so simple. Inflation also matters for costs. Indeed, 2015 was a great year re oil prices. They are now almost 50% higher. Same for salaries etc.

For the investment case, surely what matters is earnings per share (EPS), and potential profit growth (so future income growth and future EPS).

In 2015, the peak for EZJ in terms of SP, there were 400 million shares, and profits of 550 million, so EPS roughly 1.37.

In 2024, share number is now at 750 million. With 450 million in earnings, EPS = 0.6. So roughly half than 2015, again a year with great oil prices and peak SP for EZJ.

But EZJ is going out of the covid crisis and delivering on his growth plan (easy holiday anyone?). So, guidance for 2025 is around 700 million. that would make EPS=0.93.

Still below 2015 (38% lower), but not 67% lower as the difference in SP suggests (adjusted for number of shares, as we are talking about EPS).

Let's take 2019, that is going to be fun. EPS with a 427 million profit (and 400 million shares) = 1.06

So if we get to 700 million this year, and EPS of 0.93, the difference in earnings per share is 13%, but the difference in SP is currently 50%.

This is leaving aside what I would say is a clearly stronger balance sheet. And any possible growth (which should be taken into account as we invest on future income streams, no?) is not taken into account. So, assuming no profit growht from easy holidays, more efficient planes etc.

Is EZJ perfect? Obviously not. They need to be more efficient in their use of capital, they should be more effective in managing costs (like RYAAY), with better communication to markets, etc. Long list.

Even with all this, the current SP is rather low in my view.

Back on envelope calculations, so DYOR.

To clarify, I agree that the plan is very clear (and I like it myself, which is why I am here). But when EZJ has EPS almost equal to pre-Covid though a SP almost 40% below (and no debt, plenty of net cash etc), the plan is not being heard by the market. Or really taken into account. That was my point, that management needs to ensure the plan is being heard. Guidance and use of capital (including buyback) to signal the plan is not a fable, but the reality increasingly taking form on the ground.

That's all for this philosophical debate, as it does matter very little at the moment in these turbulent times. GLA

The idea that management is trying to suppress the SP makes very little sense. 1) they have done very little to this end: just saying strikes are bad or not offering guidance would not be enough, and other companies (JET2) have done the same; 2) they are not clever enough; 3) it would be illegal; 4) it is almost 3 years of recovery: how long are they waiting for a buyer?

There is a much simpler answer here: the management is not very good at leading a listed company; they may have expertise in running the business from an operational point of view (I think they have done well here, especially the previous CEO during a massive polycrisis) but they do not understand markets, especially current markets that want to see plans for growth, efficiency and effective use of capital (eg: net cash is significant, partly this is needed to fund new fleet, but surely they could be more effective in their use of this?)

When all 'relative' competitors are close to ATH (IAG, RYAAY, JET2), and the only company moving similarly on their SP is TUI, it means the market sees EZJ as just a tourist operator, a utility company with no growth. A new plan in terms of vision and narrative are required to shake the market.

A share buyback would be useful here, as a wake up call to the market that we are making a lot of profits, and we are confident we will continue to do so, rewarding diluted shreholders, and removing shares from the market.

Or any other clear and strong message with confidence in profitability growth for the company.

Just my 2 cents.

You look at the SP increase across airlines, then look at EZJ and it seems quite clear the senior management at EZJ should be ashemed of themselves.

Yes, one hunder times yes. If senior management cares at all about shareholders (as it should be, but it is not currently the case here), then yes, we need a substantial share buyback. Resources are there. The use of cash and capital in EZJ is really not optimal at the moment.

This is why I wrote earnings per share.

If we compare 2024 to 2017 (you can take 2019, these being the two worst years pre-covid, when SP was roughly 80% higher than now), shares have gone from 400m to 750m, profit before tax: £400m in 2017 and £602m for 2024. EPS is down of course, from roughly 1 to 0.8. Per share. If we apply current guidance for 2025, then EPS go to 0.94. SP is still half though (without considering current net cash, low debt, growth in holiday, more efficient aircraft etc).

However, I agree that when we take ther years pre-covid, then profits and EPS are much better, but SP was also much higher (above 1). Maybe the market was more interested as they were seeing years of sudden profit growth, so EZJ was perceived as a growth story, whereas now it seems slow but steady mode?

Interesting.

ps: entirely possible my math is bad, I was doing back of envelope/in my mind calculations...

Stille, thanks for the comment. That is more or less my own reading of the whole situation. I think Jo Lundgren did a great job in a terrible time (not perfect, but not an easy task!), and his sense of stability was perfect in a time of turbulence. A calm man, with a plan, and enough charisma for the task.

Now things are very different. Personally, the new CEO does not seem to me like the right person to provide vision or energy (and have a look at the poor shareholders, which ultimately own the company). I am not disputing he is not qualified or good, but it seems he thinks a CEO is a CFO. This may not be ideal.

We'll see, but this aspect of EZJ is troubling me.

Thanks Xhita, your posts are always extremely valuable and interesting. Really useful to get an insight into that part of the business.

Having said that, I think it would be useful (at least for me) to have a parallel discussion on the share price. The business side of EZJ is strong. Demand is resilient. The holiday business has significant growth (to continue), cash-debt situation is strong, oil is relatively low, costs have increased but also efficiency and slowly but surely profits are now quite good. Average analyst target price is also much higher than current SP.

Yet, FTSE100 at record high, IAG at record high (post covid), RYAAY the same, JET2 the same, whilst EZJ languishes around 5 (I excluded WIZZ for obvious reasons).

Now, the question is, why is that? Clearly it is not that the market does not like low-cost or other carriers. Shorts? The others also have them.

We have gone nowhere from 2023. Our P/E ratio remains lower than pre-covid. Earnings per share are slightly lower than pre-covid (not much), but SP is much lower.

Anyone willing to offer a good explanation? Please, not of the sort 'things will come'.

I am personally in the camp of directors not good enough for a listed company (possibly good to run the day-to-day business: but this is not enough for a listed company).

But I would appreciate any other view offering a better explanation (or whether I am missing something obvious).

End of rant.

Jarvis is just a terrible CEO, a bean counter that is not able to have any kind of effective communication to the investment community, always whispering the good bits but clearly flagging any little expected hiccup to the world.

I will wait for the rise into summer and then sell, as after a few quarters it is clear he is not able to break the spell of negative investors on EZJ.