Easyjet Buyback
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Smallpilot - Wrong! Don't confuse a "profit warning" with "no cash in the bank"...RYR are VERY cash-rich, ok they might be worried about this year's PROFITS, but they would have the cash to buy eJ and enough left over for still more brand new 737-800s!
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Easyjet has huge commitments for aircraft, but no certainty as to where the passengers will come from or if they will pay the ticket price that Easy needs to keep afloat. The numbers looking forward don't add up. Public companies have to have accounts that are very transparent, so that investers know where they stand. The sort of help that Easy will need over the next few years from the banks would wipe out the share price and prevent any serious lending by the banks under their normal lending criteria. If they lend money and help Easy out of the pickle they are in, the banks would want a very large slice of the company profits(or assets if it fails) down the line. These deals are only available to private companies where the books are not available for public scrutiny. Negotiations are much easier when dealing with just one or two owners, especially if they have other businesses/assets to offer as collareral against loans.
Same thing happened at Virgin Atlantic about 15 years ago. Virgin survived, and the banks that helped Branson did very nicely too.
Same thing happened at Virgin Atlantic about 15 years ago. Virgin survived, and the banks that helped Branson did very nicely too.
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What 'pickle' are EZ in exactly?
A few hundred millions in the bank and secure finance for all remaining aircraft deliveries, 85% load factor.
It was a profit warning, not a loss warning!
What 'pickle' are EZ in exactly?
A few hundred millions in the bank and secure finance for all remaining aircraft deliveries, 85% load factor.
It was a profit warning, not a loss warning!
PPRuNe Knight in Shining Armour
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easyJet is the bedrock of the easy brand. If I were Stelios, and still interested in using the brand to launch other loco ventures, such as easyCruise, I'd certainly want to make sure it survived. The best way to do that, as said above, would be to take it away from the uncertainties of the public sector. All IMHO of course.
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easyJet PLC
07 July 2004
7 July 2004
easyJet passenger statistics for June 2004
Below are the easyJet passenger statistics for June 2004. This information is
published on the fifth working day of every month.
____________________________________________________________ _____________
Month ending June 2004 June 2003 Change
Passengers1 2,241,252 1,751,860 28%
Load Factor2 86% 86%
____________________________________________________________ _____________
Rolling 12 months ending June 2004 June 2003 Change
Passengers1 22,877,710 18,939,545 21%
Load Factor2 84% 84%
Revenue (unaudited)3 £1,030m £855m 21%
____________________________________________________________ _____________
Ray Webster, Chief Executive of easyJet said:
'These figures are in line with our statement in June. We continue to
capitalise on our market and financial strengths - last month we began new
services to Cologne, announced that we would base a further three new
aircraft at Berlin (bringing the total to nine) and added five new routes
from London Gatwick.'
1. Represents the number of earned seats flown. Earned seats include
seats that are flown whether or not the passenger turns up because
easyJet is a no-refund airline, and once a flight has departed a
no-show customer is generally not entitled to change flights or seek a
refund. Earned seats also include seats provided for promotional
purposes and to staff for business travel.
2. Represents the number of passengers as a proportion of the number of
seats available for passengers. No weighting of the load factor is
carried out to recognise the effect of varying flight (or 'stage')
lengths.
3. Represents statutory revenue (unaudited)
07 July 2004
7 July 2004
easyJet passenger statistics for June 2004
Below are the easyJet passenger statistics for June 2004. This information is
published on the fifth working day of every month.
____________________________________________________________ _____________
Month ending June 2004 June 2003 Change
Passengers1 2,241,252 1,751,860 28%
Load Factor2 86% 86%
____________________________________________________________ _____________
Rolling 12 months ending June 2004 June 2003 Change
Passengers1 22,877,710 18,939,545 21%
Load Factor2 84% 84%
Revenue (unaudited)3 £1,030m £855m 21%
____________________________________________________________ _____________
Ray Webster, Chief Executive of easyJet said:
'These figures are in line with our statement in June. We continue to
capitalise on our market and financial strengths - last month we began new
services to Cologne, announced that we would base a further three new
aircraft at Berlin (bringing the total to nine) and added five new routes
from London Gatwick.'
1. Represents the number of earned seats flown. Earned seats include
seats that are flown whether or not the passenger turns up because
easyJet is a no-refund airline, and once a flight has departed a
no-show customer is generally not entitled to change flights or seek a
refund. Earned seats also include seats provided for promotional
purposes and to staff for business travel.
2. Represents the number of passengers as a proportion of the number of
seats available for passengers. No weighting of the load factor is
carried out to recognise the effect of varying flight (or 'stage')
lengths.
3. Represents statutory revenue (unaudited)
Oh Shazbat!
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Shareholders - Who actually manages?
ib16uk - One of the problems with going public is that the shareholders, especially the large institutions like pension funds, put expectations on the management of the company that may be at odds with what could work best. The execs end up trying to move forward with one hand tied behind their back as they have to show growth in margin, increased dividend etc often before they can look at positive inward investment (something that grows the company but may include an element of risk - such as opening up ops at a new airport).
One major problem with the shareholders is that they measure companies in a sector against each other usually by numbers. For example if SWA and Ryanair are showing aggressive cost control whereby their operating costs are x% of turnover, then shareholders may look at other airlines and expect the same everywhere without looking too deeply at the underlying factors. EJ may well run a newer fleet of aircraft which probably cost more in leasing than Ryanair - from a shareholder perspective thats not good news, yet from a passenger perspective I know which I would sooner travel on.
Also where execs have good ideas, they have to go back to the city to finance them. If Stelios is bring the company back into private ownership, a little lkike Branson did, then financing new ideas becomes easier (Stromin Norman has the right track there).
Personal perspective here is that a lot of organisations get more flexibility when privately owned than publicly. I suspect that if this happens then it could put EJ on a more competitive footing again.
One major problem with the shareholders is that they measure companies in a sector against each other usually by numbers. For example if SWA and Ryanair are showing aggressive cost control whereby their operating costs are x% of turnover, then shareholders may look at other airlines and expect the same everywhere without looking too deeply at the underlying factors. EJ may well run a newer fleet of aircraft which probably cost more in leasing than Ryanair - from a shareholder perspective thats not good news, yet from a passenger perspective I know which I would sooner travel on.
Also where execs have good ideas, they have to go back to the city to finance them. If Stelios is bring the company back into private ownership, a little lkike Branson did, then financing new ideas becomes easier (Stromin Norman has the right track there).
Personal perspective here is that a lot of organisations get more flexibility when privately owned than publicly. I suspect that if this happens then it could put EJ on a more competitive footing again.
Paxing All Over The World
Branson said that one of the reasons he was taking VS private again was that he was fed up of having to run off to the boys in the City to explain his every move and get their approval.
The stock market often makes the best profits for an individual when they invest for a prolonged period of time. New companies have to duck and dive (as batninth explains so well) and are less well suited to the Market. Mature companies can handle the Market better.
In the 1980s, the Thatcher/Reagan Axis managed to convince too many people that the Stock Markets were the way forward but thay are not universal and equal in their treatment of people and companies. The youngsters that are actually operating the market (analysts/stock brokers/jobbers etc.) only make money when the stock is moving. If people are buying and selling, then the folks in the middle make money. They do not care whether it is going up or down. In the process, thousands lose money and people's jobs are put at risk. In fact, many of the layoffs of PLCs are soley to appease the City.
So, whilst some folks may lose out on share options, others may gain in job security!
--------------------
"I tell you, we are here on Earth to fart around, and don't let anybody tell you any different." Kurt Vonnegut, Jr.
The stock market often makes the best profits for an individual when they invest for a prolonged period of time. New companies have to duck and dive (as batninth explains so well) and are less well suited to the Market. Mature companies can handle the Market better.
In the 1980s, the Thatcher/Reagan Axis managed to convince too many people that the Stock Markets were the way forward but thay are not universal and equal in their treatment of people and companies. The youngsters that are actually operating the market (analysts/stock brokers/jobbers etc.) only make money when the stock is moving. If people are buying and selling, then the folks in the middle make money. They do not care whether it is going up or down. In the process, thousands lose money and people's jobs are put at risk. In fact, many of the layoffs of PLCs are soley to appease the City.
So, whilst some folks may lose out on share options, others may gain in job security!
--------------------
"I tell you, we are here on Earth to fart around, and don't let anybody tell you any different." Kurt Vonnegut, Jr.
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No new easy HQ
I understand that Mr Webster has stopped all plans to relocate easyJet HQ (easyLand) at Luton from the old domestic terminal and Portakabins, to a new site close to the old Vauxhall works.
This must save easy a few bob?
This must save easy a few bob?
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Easyjet are going to nead a lot of money over the next few years - new routes, new aircraft, training etc etc. Some of this was going to be paid for out of expected profits. These profits are now going to be less than expected. This is where the banks come in, because Easy will need to borrow/obtain guarantees etc. The city and the banks won't let Easy borrow more than a certain proportion of the 'value' of the company. If the shares are low, then the value of the company is low - less can be borrowed. A few hundred million in the bank is virtually meaningless. Take BA. BA a few years ago had £1 billion in the bank, and the city marked the shares at less than £1 each (a third of what they are now). BAs problem was £5 billion of outstanding loans, a £1 billion pension defict, no profits being made, and a dodgey future with war in Iraq etc. Things are looking up now - they make a profit and have only £4 billion debts, having sold off buildings etc. Cash in the bank is a small but important part of the equation. I have quite a large bank balance, but unfortunately I have a huge mortgage and it is possible that house prices might drop soon. Want to buy into my family?
If Easyjet were doing as well as some would like us to believe, the share price would be high, profits would be good and Stelious would not be selling blocks of shares whenever he can.
If Easyjet were doing as well as some would like us to believe, the share price would be high, profits would be good and Stelious would not be selling blocks of shares whenever he can.
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Its unknown how much readers know about investing or the easyJet business plan.
At the moment the Discounted Cash Flow technique of valuing easyJet dictates a valuation of about 140p. The DCF tool is good when it come to mature companies with predictable income. But it falls down slightly when it comes to rapidly expanding companies in sectors experiencing unsustainable competition.
The growth will ease and much of the competition will go bust.
Thereby restoring share value to the levels seen at about the time of flotation. Namely 350p.
For investors with money to spare for 2 years 142p at presents excellent return potential. Spice it up with the prospect of Stelios taking it private for 202p then the share is tempting.
At the moment the Discounted Cash Flow technique of valuing easyJet dictates a valuation of about 140p. The DCF tool is good when it come to mature companies with predictable income. But it falls down slightly when it comes to rapidly expanding companies in sectors experiencing unsustainable competition.
The growth will ease and much of the competition will go bust.
Thereby restoring share value to the levels seen at about the time of flotation. Namely 350p.
For investors with money to spare for 2 years 142p at presents excellent return potential. Spice it up with the prospect of Stelios taking it private for 202p then the share is tempting.
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Right enough Ben when I think back it wasn't that long ago that BA was down at 96p vs, they are 2.50 odd at present.
easyJet is a very strong brand, delivering a good product with the critical mass to push further into Europe, their future either public or private is likely to be secure.
easyJet is a very strong brand, delivering a good product with the critical mass to push further into Europe, their future either public or private is likely to be secure.
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Maybe this statement is the only real posting in this thread:
From: Stelios Haji-Ioannou
9th of July, 2004 1740h
Recent reports in the press have claimed that I am considering (even "seriously" considering, according to one Italian paper) taking easyJet private, and I wish to clarify the position on this issue.
While taking easyJet private is "a possible option, but no decision has been made yet", as my office confirmed to a journalist a few days ago, frankly the media have read too much into this.
easyGroup and members of my family hold about 41% of the shares in easyJet. The easyJet share price has fallen substantially in recent months, for various reasons, as have other airline stocks. Like any large shareholder in any company we are very keen to protect our investments, and we keep our investment in easyJet under review. All sensible options are considered from time to time.
Taking easyJet private at this stage would, in my view, be something of an extreme measure. There are many other steps which could be considered before going private. For example I still have the contractual right to be Chairman of the Board of easyJet, a position I voluntarily stepped down from a couple of years ago and something I would only reclaim in extreme circumstances. Therefore, contrary to some press reports, it is not a job that I am after, it is about protecting shareholder value. My current view is clear having discussed it with both the Chairman and the Chief Executive of easyJet. I wish to work with and support the Board and senior management in order to protect and improve shareholder value and I believe the Board will be taking measures to achieve those ends. There is no current plan on the part of easyGroup and my family to take the Company private.
While we will continue to support the Board at this time, if there were a further deterioration in the share price, deviations from what we understand to be the Board's plans to improve shareholder value or other material changes in circumstances, we would obviously be free to take a different line.
From: Stelios Haji-Ioannou
9th of July, 2004 1740h
Recent reports in the press have claimed that I am considering (even "seriously" considering, according to one Italian paper) taking easyJet private, and I wish to clarify the position on this issue.
While taking easyJet private is "a possible option, but no decision has been made yet", as my office confirmed to a journalist a few days ago, frankly the media have read too much into this.
easyGroup and members of my family hold about 41% of the shares in easyJet. The easyJet share price has fallen substantially in recent months, for various reasons, as have other airline stocks. Like any large shareholder in any company we are very keen to protect our investments, and we keep our investment in easyJet under review. All sensible options are considered from time to time.
Taking easyJet private at this stage would, in my view, be something of an extreme measure. There are many other steps which could be considered before going private. For example I still have the contractual right to be Chairman of the Board of easyJet, a position I voluntarily stepped down from a couple of years ago and something I would only reclaim in extreme circumstances. Therefore, contrary to some press reports, it is not a job that I am after, it is about protecting shareholder value. My current view is clear having discussed it with both the Chairman and the Chief Executive of easyJet. I wish to work with and support the Board and senior management in order to protect and improve shareholder value and I believe the Board will be taking measures to achieve those ends. There is no current plan on the part of easyGroup and my family to take the Company private.
While we will continue to support the Board at this time, if there were a further deterioration in the share price, deviations from what we understand to be the Board's plans to improve shareholder value or other material changes in circumstances, we would obviously be free to take a different line.
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Easyjet shares closed today at 143.50p down 6.50p (4.3%) My guess is you may see them fall further. Sounds like the crucial Summer period is not going to be a bumper one? Ther's an old city saying about profit-warnings coming in 3's - have we had 2 so far?
