topend3
27th Nov 2003, 10:34
SKYWEST is again dusting off its float plans following a bumper first quarter profit and renewed investor appetite for share offers.
The regional WA airline yesterday unveiled a better than expected net profit of $745,000 for the September quarter - $200,000 more than its maiden full year profit in 2002-03 - and said it remained on track to post a full year profit of $2.4 million.
Chief executive Scott Henderson said the board was now seriously examining the potential to float early next year, given Skywest's good prospects and above-budget earnings in the past two quarters.
"We're now agreed that the business fundamentals are there, the market is there, so we're looking very seriously at when we're going to do that," he said before addressing shareholders at Skywest's annual meeting.
"We can't really make a commitment, but we're probably looking at the March period next year."
Mr Henderson said it was still too early to say how much capital Skywest would target in any float, but that it would be determined by growth plans.
"So there's quite a large range of capital we might raise during an IPO (initial public offering) but we'll leave a substantial amount on the table for new investors in the company," he said. Heavy demand for shares in Virgin Blue also boded well for a float.
Mr Henderson said Skywest's big September quarter, in which operational cash flow came in $800,000 above forecast at $2.3 million, coupled with extensive balance sheet restructuring in 2002-03, had built an excellent platform for future growth.
"We basically now have zero net debt, which is driving a position that this airline is one of the strongest in Australia. That is just a remarkable turnaround from 12 months ago," he said.
"And if you look at cash flow from operations, it has been quite an extraordinary result . . . and is an indication of the strength that is in this business."
Mr Henderson said Skywest saw strong opportunities to grow organically, largely through an expansion of its jet services to the North West.
Passenger numbers on its thrice-weekly Perth-Broome jet service, launched last month, had been twice as high as initially expected, he said.
The company now hoped to introduce jet services to Karratha and other towns such as Exmouth next year once its second Fokker 100 jet came into service.
The regional WA airline yesterday unveiled a better than expected net profit of $745,000 for the September quarter - $200,000 more than its maiden full year profit in 2002-03 - and said it remained on track to post a full year profit of $2.4 million.
Chief executive Scott Henderson said the board was now seriously examining the potential to float early next year, given Skywest's good prospects and above-budget earnings in the past two quarters.
"We're now agreed that the business fundamentals are there, the market is there, so we're looking very seriously at when we're going to do that," he said before addressing shareholders at Skywest's annual meeting.
"We can't really make a commitment, but we're probably looking at the March period next year."
Mr Henderson said it was still too early to say how much capital Skywest would target in any float, but that it would be determined by growth plans.
"So there's quite a large range of capital we might raise during an IPO (initial public offering) but we'll leave a substantial amount on the table for new investors in the company," he said. Heavy demand for shares in Virgin Blue also boded well for a float.
Mr Henderson said Skywest's big September quarter, in which operational cash flow came in $800,000 above forecast at $2.3 million, coupled with extensive balance sheet restructuring in 2002-03, had built an excellent platform for future growth.
"We basically now have zero net debt, which is driving a position that this airline is one of the strongest in Australia. That is just a remarkable turnaround from 12 months ago," he said.
"And if you look at cash flow from operations, it has been quite an extraordinary result . . . and is an indication of the strength that is in this business."
Mr Henderson said Skywest saw strong opportunities to grow organically, largely through an expansion of its jet services to the North West.
Passenger numbers on its thrice-weekly Perth-Broome jet service, launched last month, had been twice as high as initially expected, he said.
The company now hoped to introduce jet services to Karratha and other towns such as Exmouth next year once its second Fokker 100 jet came into service.