Cantor Fitzgerald maintains 'hold' on Flybe, turnaround on track

10th Jun 2015 14:02

Broking firm Cantor Fitzgerald says Flybe's turnaround appears on-track and has kept a 'hold' rating on the budget airline stock.Flybe posted an adjusted LBT (loss before tax) of £25.4m which compared with Cantor Fitzgerald's like-for-like forecast of £25.7m (in-line).While Flybe has not provided hard financial metrics for the 2015/16 year, capacity will increase 13% in the first quarter and 65% of seats have already been sold.In a research note e-mailed to clients, Cantor analyst Robin Byde said while 2014/15 proved to be a tough year for trading, the airline has made solid progress. The twelve months to 31 March marked the first full financial year of a three -year cost-cutting plan."However, despite weakness in the shares and solid progress, we still need to see more evidence of earnings progress to be convinced of the investment merits of this regional carrier model."Byde said an increase in load factor from 5.5% to 72.5%, and revenue per seat up 3.3% to £51.35 indicated the business is starting to focus on profitable areas for growth.The full-year results were complicated by a number of one-offs, and on-going surplus aircraft costs. On the key issue of extra E195 jets, Flybe found uses for half of the 14 surplus planes it had, the broker pointed out.Despite tough trading the balance sheet remains strong with year-end cash of £195.9m, Cantor highlighted.Shares in the airline were up 2.9% to 57.62p at 2:08 on Wednesday.