Stat's look reasonable to me but the headline should have read as above.
Note 3 to the Fy16 accounts shows AIR's remaining stake of just under 103m shares was revalued down to A20.5 cps as at balance date. They subsequently subscribed for their entitlement to the cash issue for another ~ $103m shares at $A21 cps so their stake would have cost / been valued at just on $A42.7m. Sold as noted in the monthly operating stat's for $A65.7m a profit of ~ $A23m by my calculations.
Quick back of the envelope check to see if this looks reasonable. Profit was ~ 54% above cost / book value of $A20.75 cps so that makes the sale price A31.95 cps which is close to what they sold the main tranche earlier for @ $33 cps so the profit on sale looks like a very good outcome to me considering the revised shareholding was diluted by the cash issue at 21 cps. Very nice sale at a very nice profit !
They will take this profit "above the line" as per associate company movement / realisation of movement in valuation so that's some $24.5m Kiwi of profit to help towards my revised target of $475m before tax for FY16 but perhaps more importantly this represents the final cleansing of this Ansett Mk2 initiated by former management from AIR's books and draws this unhappy matter to a conclusion.
I applaud AIR's current directors and senior management for having the courage to cleanse AIR of this "investment" which I remain of the view is systemically flawed because of its business model of paying substantial royalties to Sir Richard Branson and substantial bonus's and grossly excessive monetary compensation to senior pilots and management in a company that has shown an absolutely appalling history of lack of profitability.
The only people who have done well out of Virgin, in order are Sir Richard Branson, Senior management, senior flight crew, suppliers and various other parties including airline code share partners. For minority shareholders VAH has been a truly shocking investment and if they can't make money last year when operating conditions for airlines were the most favourable in half a century, when will they...
Reasonable stat's and reasonable yield considering the low fuel price. On track to meet profit guidance within the companies indicated range I'd say.
Profit on sale of VAH adds 2.2 cps to NTA of AIR by my calculations and about $70m Kiwi to the bank account and they still have code share flight arrangements with VAH so a win all round !
Dividend looking safer now
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