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Interim Results

Flybe adjusted pre-tax profits fall

09 November 2016 07:17

Flybe Group posts adjusted pre-tax profits of £15.9m for the six months to the end of September - down from £21.1m last time - but says it has completed the transformation programme which began three years ago.

The group said the fall in adjusted pre-tax profits reflected the impact of challenging external market conditions. Profit before tax of £7.0m (H1 2015/16: £22.9m) was affected by the fall in sterling, increasing the cost of USD loans on aircraft.

Financial highlights: - 12.8% increase in Group revenue to £383.0m, driven by higher passenger volumes in Flybe UK, further development of White Label operations and increased revenue in Flybe Aviation Services

- 15.4% increase in EBITDAR2 to £83.2m (H1 2015/16: restated2 £72.1m). · Cash outflow from operating activities £(0.5)m (H1 2015/16: £21.3m inflow).

- At 30 September, the Group's balance sheet remained strong with net assets of £167.1m (31st March 2016: £154.2m). Net debt was £(24.8)m at 30th September 2016 (31st March 2016: net funds of £62.2m) mainly reflecting the increased level of aircraft ownership.

Executive chairman Simon Laffin said: "We have completed the transformation, which started three years ago. Next year, for the first time since the IPO in 2010, we will have control over our aircraft capacity. We can begin to move from being a supply-driven business to a demand-driven business. This will free us for even greater focus on implementation excellence and refining route profitability. As passenger numbers are still rising across the industry, we see further revenue opportunities. The aviation market is tough at the moment, with excess seat capacity in the European short-haul market coupled with a weaker pound, and both business and consumer uncertainty impacting all airlines. However, Flybe has a robust balance sheet and cash position. From this strong position, over the next 12 months, we will open our first European base in Dusseldorf and continue to cautiously test routes to maximise the returns from our existing capacity. Our aviation services are growing well, particularly as we support the RAF A400M turboprop. White Label flying revenue is also growing, through delivery of the SAS contract. The Board is confident of Flybe's resilience in this market. Our strategy is unchanged and we will further secure our place as the leading European regional airline."

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Related Company: FLYB

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