Yesterday's news that Kiwi conglomerate Infratil, the owners of Chas 'n' Dave Margate International Airport, have reported a NZ$31m loss for the first six months of their financial year has cast a serious questionmark over their continued commitment to the 9,029 foot strip of concrete that sits on top of our lovely aquifer.
Infratil's portfolio includes energy, buses, and, of course, airports. In Europe, they have just sold Lubeck Airport in Germany back to the local authority, Prestwick in Scotland is suffering from much reduced passenger numbers, and Manston is losing £4m a year. The firm is currently in a joint venture to buy Shell's network of service stations in NZ to facilitate, according to Infratil boss Marko Bogoievski, the sale of more meat pies.
Although Infratil says it doesn't need any more dosh to complete that purchase, its investors are already expecting it to divest Prestwick and C 'n' DMIA in the near future and concentrate on core business activities such as energy assets in NZ and Oz. According to no less an authority than NZX, the New Zealand Stock Exchange, Bogoievski sent out 'a clear signal' at Monday's results meeting 'that non-energy assets, with the exception of Wellington Airport, could be sold'. The commentary on the NZX website continues:
Forsyth Barr head of research Rob Mercer said he expected Infratil's two problematic British airports, Glasgow Prestwick and Kent, would be sold within 12 months. Infratil's shares were trading at about a 30 per cent discount to net asset value of $2.25, indicating that the market had lost confidence in the company's ability to grow net tangible assets over the next 12 months.
The shares closed yesterday at $1.51, down 3c. The discount was equal to $480m, representing the combined value of the British airports, New Zealand Bus and 32 per cent owned Energy Development.
So, putting my wildly speculative hat on, if our beloved airport is sold, who's going to buy it? Another airport operator? Or would two operators in ten years unable to make a go of it convince prospective buyers that it's not a viable business? Is Infratil's current application to instigate night flights a cunning plan to beef up the sale price? And if it's not viable as an airport, what's Plan B? A business park? A world centre of eco-energy excellence? I think we should be told!
Click here to read more on NZX website