Financial analysis based on simply regurgitating comments from a company media release will yield insights commensurate with the effort that went into it.
Among the notable issues evidenced in Rex's HY23 results are:
- For a six month period of generally favourable conditions, during which they generated their highest ever revenue (just shy of $340m), Rex returned an operating loss of $4.795m.
- Rex's selling and marketing costs rose by just over $12.5m. This almost certainly reflects the selling costs associated with the Flight Centre deal. Total jet ops revenue for the corresponding period was likely around $150m. Given that some of that revenue would have been booked directly with Rex, that seems to indicate a pretty high cost of sales through their travel agency partner(s). The full year results will flesh this picture out.
- Rex's net debt position is now at an all-time high, around $285m. This was driven almost entirely by a nearly $80m draw down on their loan facility with Westpac.
- Retained earnings of $36.165m are at a decade-long low. They are less than 30 percent of the HY20 (pre-COVID) number off of more than twice the revenue.
- Total equity fell by nearly $20m (12.8 percent).
None of that augurs particularly well, but well, never say never. It is, however, difficult to find which lever or levers Rex is hoping to pull to turn things around in the second half of the FY.