A surge in demand during the pandemic has seen Alliance flying high.
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The company has been having an off couple of days, down over 5% yesterday and a further 0.36% – resulting from the release of its FY21 full-year results. Alliance, unlike Qantas, made a profit this year, and a rising one at that. For the year it made $51 million, which is up 25.3% on the prior corresponding period (pcp).
Let’s take a closer look.
Alliance is overperforming the Qantas share price
For FY21, Alliance had the following results:
Revenue up 3% on the pcp to $308 million.
Underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $90.5 million – up 15% on the pcp
Operating underlying cashflow of $75.9 million, which is 73% higher on the pcp.
Underlying earnings per share (EPS) 22.6 cents a share but no dividend paid for the year.
Alliance is a Queensland-based airliner that specialises in charter flights and group travel. While first established to meet the needs of fly-in, fly-out (FIFO) mine workers, it has since expanded into government, tourism, and corporate travel. The Australian reports that Alliance’s service has even been sought by the NRL and the Australian Open in their attempts to keep their competitions running during the COVID pandemic.
The company has a fleet of 4 aircraft, which have been in high demand during the pandemic as people struggled and/or avoided commercial flights. This has seen the Alliance share price rise to record highs, which is the converse of the Qantas share price experience during this global viral outbreak.
What did Alliance management say about the results?
Alliance Managing Director, Scott McMillan, said
Alliance has produced a record result at a time when we are investing heavily in supporting the growth of the business. The underlying business, utilising the Fokker fleet, continues to reap the benefits of past planning and investment and is the financial and operational foundation on which the E190 expansion has been built. This expansion program will provide the Company with an increase in annualised flight hours of up to 3 times by the end of FY2022.
Alliance and Qantas share price snapshot
Over the past 12 months, the Alliance share price is 18.5% higher while the Qantas share price is 26% greater. The contrast between the 52-week figures and the year-to-date figures are stark and show how quickly things can change.
At the same time, the S&P/ASX 200 Index (ASX: XJO) is 14.1% higher year-to-date and up 25.2% over the year.
Alliance Aviation has a market capitalisation of $666 million and Qantas has one of $8.5 billion.
Should you invest $1,000 in Alliance Aviation right now?
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Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.