The Alliance Aviation Services Ltd (ASX: AQZ) share price was up 5% yesterday afternoon with management announcing that the company expects to achieve a new record profit this financial year.
What Does Alliance Aviation Do?
Alliance is Australia’s leading provider of contract, charter and allied aviation services, employing nearly 600 full time staff throughout Australasia and Europe. The company currently operates a fleet of 38 aircraft which is set to increase to 44 by the end of 2019.
Alliance specialises in tailored aircraft charters for the resource industry along with inbound and domestic group travel across Australia, New Zealand, the Pacific Islands and South East Asia.
Trading Update
Alliance has said that it is expecting net profit before tax for the 2019 financial year to be in excess of $32.5 million. This would constitute an increase of more than 25% on last year’s figure of $26.1 million. CEO Lee Schofield was especially pleased with the ongoing success of their diversification strategy and credited the strong profit growth to the company’s on-time performance record and a continued focus on safety.
Flying Under The Radar
Alliance might be a relative minnow on the ASX with a market cap of approximately $330 million but it has delivered handsome profits to its shareholders over the past couple of years. Based on a 30% effective tax rate, Alliance is trading for 14x 2019 earnings and with a trailing fully franked dividend yield of 5% it may be one ASX share flying under the radar that’s worthy of further consideration.
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Disclosure: At the time of writing, Luke does not have a financial interest in any of the companies mentioned.
