Canaccord Genuity says Air Partner has 'firepower for growth'

Canaccord Genuity said Air Partner's freight charter unit had delivered stronger-than-expected trading, leading to full-year 2022 pre-tax profit, net cash and earnings per share upgrades.

As Air Partner delivers on its strategy, the Canadian bank thinks this will allow investors to assign a greater probability of compounding growth prospects. Critically, even though stronger trading has a 2021-22 effect only, Canaccord thinks the cash generated opens the way to accelerate growth and shareholder returns and that, as a result, longer-term the shares could then surpass 240.0p as the PER re-rates upwards.

"We project unchanged 2023E EPS 37% > FY20 EPS (pre-COVID-19) despite ~20% dilution from new shares issued since - with quality EPS from FCF (av. ~11% FCF yield FY22E-24E) and RoE over 20%," said the analysts.

"With a PER ~10x FY23E (and ~3% DPS), we estimate this asset-light, diversifying company offers scope for good total return prospects."