Investment: Air London loses altitude

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The Independent Online
THE FAINTEST hint yesterday of a drop in demand from City bankers for charter aircraft to whisk them from deal to deal was enough for Air London to lose altitude.

Shares in the aircraft broker dived 30p to 295p, undoing all the good work achieved by the results for the year to the end of July. These showed a 30 per cent jump in turnover and pre-tax profits up 39 per cent to pounds 3.22m.

Those figures included a non-recurring contribution of pounds 300,000 from finding planes for flights to and from the World Cup during the summer and charter flights pulling American personnel out of trouble spots in the Far East.

However, the results exceeded forecasts by at least the same amount, and analysts have upped their forecasts five times in the last two years.

Inevitably most of the business consists of one-off or short-term deals, but activities are well spread. More than half the turnover comes from core commercial business, which includes moving large numbers of people to conferences, motor shows and product launches as well as from inter- airlines broking.

According to executive chairman and controlling shareholder Tony Mack, Air London remained profitable throughout the last recession, and overall turnover to date is ahead of last year.

Air London plans to change its name next year to Air Partners to mark the success of its operations in France, Germany and the US and the growth opportunities there. Analysts left their profit forecasts for the current year unchanged at pounds 3.4m. They have pencilled in pounds 4m.

Earnings have grown by an average 17 per cent compound over the past nine years. On a multiple of 10 times next year's earnings, the shares are worth a look.

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