Sharechat Logo

Daily ShareChat: Auckland Airport

By Jenny Ruth

Monday 21st February 2011

Text too small?
 Jenny Ruth

Auckland International Airport's (AIA) retail operations are likely to be the feature of Auckland International Airport's first-half result when it reports on Thursday, says Geoff Zame at Deutsche Bank.

The airport's disruptive airside retail development was completed in December and the two airside duty-free stores have been operational and performing strongly for all of the first-half, Zame says.

"Our retail revenue forecasts remain unchanged but arguably AIA should be able to comfortably hit their aspirational full-year 2011 target for retail revenue of $105 million (Zame's forecast is $104 million), assuming passenger growth continues to track around current levels."

Favourable anecdotal feedback and firsthand experience of the quality of the new retail offering and the fact extended international departure check-in times mean passengers are in the retail area for longer back his view.

Zame is forecasting first-half net profit will be $57.9 million, up 7.3% on the same six months a year earlier.

"Earnings risk is to the upside in calendar year 2011 in our view with AIA's aspirational target for retail revenue no longer a pipe dream," he says.

He values AIA's retail business on a stand-alone basis at about $1.3 billion using a capitalisation rate of 6.5% and says it compares favourably with Sydney and Melbourne airports.

Recommendation: Buy.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Auckland International Airport Limited (NZX: AIA)
Auckland Airport sees growth in luring Asian travelers, tapping landbank
Auckland Airport shares climb to 6-year high on better earnings, higher dividend
Auckland Airport boosts FY profit 25 percent as property values rise, ups dividend
Auckland Airport expected earnings just within regulator's tolerance
Ex-Fonterra chairman van der Heyden to lead Auckland Airport board
Auckland Airport's 8 percent expected returns 'reasonable', regulator says
Auckland Airport 1H profit rises 11 percent on growth in domestic passenger traffic
Pre-Offer Announcement - Auckalnd International Airport
Auckland Airport flags $100 mln bond offer