Originally Posted by
Roger
$500m the mid point of their forecast range gives 32 cps after tax. The reason for my work on free cash flow and capex was to establish whether the company is in a position to pay 20 cps in dividends going forward. $400m, the bottom end of their forecast range gives 25.6 cps. They have the balance sheet strength to pay that dividend for the foreseeable future and they're already broadly in a neutral new capex position relative to depreciation taking into account progress payments already made on new aircraft so perhaps the question is why wouldn't they ? Obviously the Government like their share of cash, (its not an accident they paid out the full proceeds of the Virgin sale). Interestingly on your last point Qan declined to give a profit forecast and last year the company didn't give a half year forecast until the annual meeting at the end of Sept, so as you say its a good thing that they're being so forthcoming so early in the year but people I am sure can understand because its so early in the year they had to give a wide range to account for a wide variety of possible future scenario's, hence the $400 - $600m.
Winner you are absolutely right. This pure bred hound has had to endure listening to highly experienced investors bleating for years that AIR can never make money because of their high current and future capex....to the point where it made my ears hurt. Those investors don't seem to have been able to understand the basic's that AIR are thoroughly modernising their fleet, go figure ?
Now I've shown their capex is broadly neutral for the next 3 years and then we can subsequently look forward to approx half a decade of tremendous cash flow with minimal capex its funny how they've gone quiet isn't it.
If Raz one of our favourite resident horse traders is looking at this stock more and more as an investment maybe long term investment in this airline isn't as crazy as it sounds after all.