Ups and downs in the air

Alpha Airports' share price remains overhung by the 25 per cent holding in the airline catering company retained by Forte, its erstwhile parent. The share price performance since flotation a year ago resembles a domestic UK flight: take-off at 140p, a quick climb to 177p, followed by a swift descent to 138p, where it landed yesterday, down 7p.

Yesterday's announcement of an 11.5 per cent increase in pre-tax profits to £21.4m for the year to 31 January was in line with market forecasts. The total dividend is 4.6p, which should rise to 5.05p for 1995/96 to give a prospective yield of 4.98 per cent.

Business is steady as far as it goes. There are very few large in-flight catering contracts coming up for tender this year, and airlines are still squeezing suppliers. Retail operations are sauntering along, and the company is on a learning curve with its fledgling Sky Retailing operation on planes.

There was nothing in the results to warrant a change in previous projections that profits would hit £25m for the current year, putting the shares on a market average multiple of 12.2.

Unless Forte solves the problem by selling its stake, Alpha's short-term share performance is unlikely to be more than pedestrian. The only other possible liftwould come if Alpha managed to buy the catering side of the soon-to-be privatised Qantas state airline in Australia.