VistaJet for sale

[Global_Global]

Exclusive: VistaJet in talks with banks on possible $900 million sale - sources | Reuters (http://www.reuters.com/article/2014/07/14/us-vistajet-sale-idUSKBN0FJ1QD20140714)Interesting: Valuations for the sector are hard to come by, as the firms involved are largely privately-owned. But Bombardier last year sold FlexJet for $195 million in a deal estimated by analysts to be worth between 8 and 9 times core earnings (EBITDA).
VistaJet has core earnings of around $100 million, one of the sources said, giving a deal value of up to $900 million at those multiples.
So profit or a future does not matter but turnover does.... :ooh:

That is business aviation for you :rolleyes:

[galaxy flyer]

Earnings would be called "profit", so the earnings are $100 million. Pay attention, please.

GF

[Global_Global]

Pay attention, please: we are talking Vista Jet here....

All smoke and mirrors and nobody understanding that they make any money... :8

[Booglebox]

That equals about $7k of profit / aircraft / day.
Hmm. I think it's plausible. Do others?

[wondering]

It says core earning (EBITA) - earnings before interest, taxes, depreciation and amortization. That´s not profit.

[HyFlyer]

Exactly......real profit is only AFTER you have covered all the costs of actually doing the business.


Or put another way.

I borrow $10 million at 5% a year...=$500,000

I buy an $8 million jet and have $2 million for setup/fixed ($1 million) and offsetting operational costs.

I sell flights at $2000/ hour that really cost $3000/hour to fly.

I fly 1000 hours, because customers love a bargain....so $2 million of Revenue....and needing $1million to offset the operating costs.

Hence. $2million revenue but $2.5 million of costs which in the real world is a loss of $500,000......and a business doomed to fail.

...but on this basis it would be a business for sale at $9million.......!!!!

(I haven't even considered the deprecation of the aircraft asset, nor any corporate taxes due in the above...which only make the picture worse.)

EBITDA is a useful accounting number for analysis purposes, but of little worth for understanding real profitability without other data.

[Boabity]

So, having established that the numbers are bull, then there's a very good chance the source is equally full of it.

[Global_Global]

You mean me or Reuters? :E