Liberum says Flybe improves but has more work to do

11th Jun 2014 09:30

Liberum Capital has increased its price target on Flybe after the regional airline moved into the black, but said more work was needed.Liberum reiterated its buy recommendation on Flybe and lifted its price target to 190p from 175p.Flybe, which has axed hundreds of jobs and several bases to turn around its recession-hit UK business, on Wednesday unveiled adjusted pre-tax profit in the year to March 31st of £1.7m, against a £23.6m loss a year ago.UK passenger numbers rose 6.9% to 7.7m despite a 1.4% fall in seat capacity.Liberum said the results were "a clear improvement" on the substantial loss a year ago.Commercial initiatives were leading to better volumes and revenue per seat while a 21% cut in staff costs were reducing lower total and unit costs.But the broker said: "Further improvements are required, which we see coming from the return to profitable growth, to drive better aircraft use and pilot productivity."Shares fell 2p or 1.4% to 138p at 09:35 in London.PW