The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Article here (in Spanish) from "OKDiario" : The former king of Spain seems to have been a client of Air Partner.
A scandal around his trips and what he gets up to....but, hey, "dinero es dinero"!
https://okdiario.com/investigacion/orleans-utilizo-pais-falsa-cortada-pago-vuelos-privados-rey-juan-carlos-i-altruismo-5764469
From FT Alphaville:
"JP Morgan Cazenove turns positive on William Hill, a bookmaker:
Earlier this week WMH took advantage of a share price recovery (from the March low of 37p), raising capital to meet investment requirements in the US while curing a leverage problem in advance of looming regulatory threats in the UK. In our view, the £224m of gross proceeds from this week’s placing relax the constraints on WMH’s ability to chase the US sports betting (and gaming) opportunity, and bring down the uncomfortably high leverage. We believe the new capital structure is capable of absorbing a possible regulatory shock (e.g. the potential imposition of £2 online slots stake limits from April 2021) and weakness in the UK Retail estate. We upgrade William Hill from Neutral to Overweight, increasing our Dec-2020 TP by 25% from 160p to 200p, and now regard William Hill as our top pick in the Online-led Gaming sector."
Note: "(we) " now regard William Hill as our top pick in the Online-led Gaming sector."
https://ftalphaville.ft.com/2020/06/19/1592570471000/Markets-Now---Friday-19th-June-2020/
The new sports betting ETF in the US, BETZ, is including WMH in its portfolio:
https://seekingalpha.com/article/4354331-betz-this-new-sports-betting-etf-is-worth-look-now-live-sports-return
I believe the All-Party Parliamentary Group is, despite its seemingly "official" title, actually a kind of ad-hoc set-up which appears to be funded, not from public money but instead from business parties with obvious vested interests of their own to push and promote. I understand that funding is at present received from land-based casinos, obviously opposed to the growth of online gambling. This article from "The Independent" in respect of the APPG's previous campaign against FOBT refers to the funding they received from such parties on that particular occasion. Don't be fooled by the group's title, don't automatically assume impartiality of judgement here in the reports and recommendations they come out with.
https://www.independent.co.uk/news/business/comment/bookies-blast-mps-fobt-report-over-funding-by-rival-gambling-outfits-a7554921.html
"William Hill is raising £200 million of new equity in a move that will strengthen its balance sheet and give it the firepower to step up the pace in America.
In a move neatly coinciding with the first day of Royal Ascot, Britain’s second biggest betting group said that it intended to place new shares equivalent to up to 19.99 per cent of its existing share capital. Analysts predicted an issue price of 125p to 130p, a modest discount to last night’s close of 139p, up ¾p, or 0.6 per cent.
As part of the issue, which is being handled by Barclays and Citigroup, directors and senior management plan to invest £200,000, while retail investors will get the chance to participate via the Primarybid platform at a minimum subscription of £100 per investor.
Trading levels are returning to normal after the lockdown that closed its betting shops and stopped all the sporting events that the bookies rely on to coax punters into parting with their cash."
"William Hill, which was founded in 1934, is increasingly focusing on digital gambling. Last year, it was forced to close 713 shops in response to the £2 stake limit on fixed-odds betting terminals and today its estate stands at about 1,560.
Its British online sports staking business was at 30 per cent of normal levels when there was no significant sport, rising to 50 per cent when Germany’s Bundesliga restarted and trending back to normal levels after the return of racing in Britain. It expects to get back to pre-lockdown levels with today’s resumption of Premier League football. Its English betting shops reopened on Monday.
In a trading update for the 23 weeks to June 9, William Hill said that overall net revenues had fallen by 32 per cent. It said that it expected the trading backdrop to remain uncertain, but it was “encouraged to see both online and the US performing ahead of our initial expectations”.
In America, where it is targeting a market worth an estimated $7.5 billion, it has built a 24 per cent market share and is planning to seek licences in all states planning to allow sports betting over the next 12 to 18 months."
https://www.thetimes.co.uk/article/william-hill-raising-200m-equity-for-us-expansion-tdxd53w9g
William Hill can pursue growth more aggressively with new funds, says Jefferies After William Hill announced that it intends to issue up to 19.99% of its existing ordinary share capital for proceeds estimated to be about GBP 250M, Jefferies analyst James Wheatcroft said the combination of the net proceeds of the placing, together with a GBP 200M VAT refund, will almost double the company's liquidity. Post the placing and VAT refund, William Hill's balance sheet "is sufficiently robust to weather its downside scenario," while also giving the company firepower to invest as U.S. sports betting legalization accelerates, Wheatcroft tells investors. The analyst, who said William Hill now has the scope to pursue the U.S. growth opportunity "more aggressively," keeps a Buy rating on the stock with a 305 GBp price target.
Read more at:
https://thefly.com/landingPageNews.php?id=3111441
Aberforth down to zero! Good news! There must have been a ready buyer, eager to take the shares, for 10% to have been disposed of in one day. Especially so, given the placing as well. Institutions must be waking up to the value here.
https://www.investegate.co.uk/air-partner-plc--air-/rns/tr-1--notification-of-major-holdings/202006151410009982P/
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https://www.ft.com/content/07966ea1-0e8e-4d5b-a8ee-950dfaa7b443
By contrast, there are always a few businesses which benefit from dark times. It’s an ill wind that blows no good, as the saying goes. In the early stages of Covid-19, Air Partner fell to 17p as all airline-associated stocks plunged. However, it has clearly had an excellent start to the year, with the company heavily involved in organising repatriation flights and facilitating the worldwide freight movement of PPE and industrial parts.
As a broking business with relatively stable overheads, increased activity quickly flows to the bottom line, boosting both profits and cash. Unsurprisingly AP shares have taken off and are now around 80p. Hopefully, there should be further to go — including, perhaps, a resumption of dividends."
https://www.ft.com/content/07966ea1-0e8e-4d5b-a8ee-950dfaa7b443
"Look beyond the accepted wisdom. We think it’s largely right that the gaming sector will enjoy a V-shaped recovery as sporting events resume. But that argument is now well understood, and share prices have reacted accordingly, rallying hard from the COVID-19 market lows. It’s now time, we think, for investors to be more selective: while there are opportunities, we should not ignore other concerns that lie ahead. History shows that a recession is not good for gaming spend and, in the background the European regulatory mood music appears to be getting slightly worse. There’s also the potential threat of higher taxation being levied on the sector as countries seek to repair their debt levels.
The valuation buffer is diminishing. Valuations look full vs. history, even excluding US losses. We screen the risks to valuations through our SOTP prism. On that basis, it’s hard to argue that there’s much room for comfort and this makes us more nervous about the outlook than we were previously. Also, it’s clear to us that markedly different outlooks are being applied to the three groups’ US businesses: GVC and William Hill are ascribed relatively little, while FLTR is given a fulsome long-term value.
Taking a more cautious stance. The sector has rerated from its COVID-19 low prices and it is now time to take a more cautious stance. The operator that still has the most upside is William Hill, in our view (Buy, 230p TP). We think its US business is underappreciated and the European online business is in better shape than commonly perceived. We downgrade GVC to Hold from Buy given the strong recent share price performance as regulatory threats loom in Germany. For Flutter, the performance in the US is impressive, but it’s becoming harder to justify the current valuation given that it faces similar macro headwinds to the wider sector."
https://ftalphaville.ft.com/2020/06/09/1591698256000/Markets-Now---Tuesday-9th-June-2020/
"William Hill price target raised to 230 GBp from 150 GBp at HSBC HSBC analyst Joseph Thomas raised the firm's price target on William Hill to 230 GBp from 150 GBp and keeps a Buy rating on the shares."Read more at:https://thefly.com/landingPageNews.php?id=3107562
There have been lots of articles about repartriation flights of stranded tourists and other citizens back to their home countries and Air Partner seems to have done quite well out of that. However, it seems that there are about 400,000 seamen of different nationalities stranded on ships or in foreign ports who need to be returned to their bases or repatriated and reassigned in order to avoid serious disruption to global supply chains. Sea transport accounts for 80% of global freight. I wonder whether this represents one more income stream for Air Partner.
https://www.stripes.com/news/us/ship-crews-are-stuck-in-lockdown-straining-global-supply-chains-1.625188
Lots of comment here from Mike Hill, Director-Group Freight. It seems that business is still booming with the routes changing as the successive outbreaks of the Chinese virus (true description, isn't it?) roll around every part of the world:
https://www.stattimes.com/news/cargo-charters-standing-right-on-the-frontline-to-fight-covid19-air-cargo/
"Air Partner takes off after virus grounds big airlines"
"Despite the turbulence affecting airlines and aircraft makers there are still some pockets of the aviation sector that are flourishing.
Air Partner, the global aviation services group, for example, confirmed in a trading update yesterday that April was a record month for the company and that “the business has continued to perform well ahead of budget in May”.
For the first four months of the year, it expects to make an underlying pre-tax profit £7.5 million, mainly due to high levels of activity in the freight and group charter divisions as well as “some early signs of recovery within private jets”.
Founded in 1961, Air Partner originated as a training school converting military pilots for civil aircraft duties. It is best known now for chartering aircraft large and small for Europe’s football and rugby clubs, grand prix motor racing teams, rock bands, politicians and government officials, oil and gas companies and the wealthy.
It also specialises in procuring anywhere-anytime freighters and has expanded into being a second-hand aircraft dealer and a provider of aviation training services. Based at Gatwick, it employs 450 people at 16 locations worldwide.
Air Partner said that a large proportion of current demand is for corporate shuttles, as companies in the UK and America seek to safeguard their employees. In the private jets division the company reported that enquiries for future flight bookings had doubled last month compared with April.
The aviation company added: “We have enjoyed a strong start to the financial year, however visibility beyond June remains limited. While we expect crisis work to slow down in the second half, we expect this to be replaced by a recovery in activity in our core freight business, private jets and safety and security.”
At the end of May, the Air Partner had cash in the bank of £16.5 million and also had access to a total debt facility of £14.5 million.
The shares closed up 6p, or 7.8 per cent, at 82½p."
https://www.thetimes.co.uk/article/air-partner-takes-off-after-virus-grounds-big-airlines-gn9pvv6c2
Perhaps on track for £10m PBT for H1.
Super!
Is that really a purchase of 1m shares at 82p today?
Many stocks seem to be priced on hope and not much more but as long as the butler (in the form of central banks) is still coming round with the drinks, the guests will keep drinking, while keeping their coats on and edging ever closer to the exit.
Engadine closed a great chunk of their short on Friday.
https://shorttracker.co.uk/
It rates it as a "speculative buy", mentioning the very positive recent statement from the company, Breakwell's purchase of 295k shares at close to 30p, the likely recapitalisation of the group rather soon, the normalisation this year of investment spend which will improve cash flow and transfer value from debt-holders to shareholders, the changed debt and recapitalisation environment for AA now that so many companies are raising capital themselves, that AA is still investment grade despite the very large debts and the PE of only 2, obviously high risk but generally rather encouraging. The person running SCSW has a holding in AA.
This was tipped in the SCSW newsletter for June.
"The Government’s quarantine plans face a Tory revolt when they reach the Commons this week, as a senior MP warned it was the “wrong policy” that will damage the economy.
Priti Patel, the Home Secretary, will on Tuesday lay the regulations in Parliament enacting the quarantine under which all international arrivals, including returning Britons, will be required to self-isolate for 14 days.
However, more than 20 Tory MPs including at least seven former ministers are demanding a rethink of the plans that are scheduled to come into force on June 8 and the introduction of “air bridges” with low-risk countries.
Huw Merriman, Conservative chair of the transport select committee, said: "Personally, I think it’s the wrong policy at this time and disproportionately impacts the economy"
https://www.telegraph.co.uk/politics/2020/05/31/quarantine-plan-faces-tory-revolt-reach-commons-week-senior/