Cube Report (18 Nov 2020) – So many pennies from IMB’s dividends

Cube Report (18 Nov 2020) – So many pennies from IMB’s dividends

Good afternoon!

I’ve decided to run today’s show at 6pm. Later than planned but I have to get my car tested this afternoon, so it’s the only way I can make it work.

See you then! Here’s the location:

An update from yesterday I want to mention:


  • Loading stock data...
Market cap £3.45 billion
RNS Final Results
Writer disclosure No position.

An update from yesterday that I want to mention.

  • Planned capacity: 20% for Q1 2021.
  • FY September 2021: passengers down 50% to 48 million
  • Load factor falls 4.3 percentage points to 87.2%.

I have to agree that it’s an impressive load factor in the circumstances. Flying activity was crushed, in line with reduced demand.

Though from what I understand, it’s not really illegal to go anywhere – is it? But you might be forced to quarantine in a place like Italy. Doesn’t sound fun.

Looking through the various metrics, I see that cost per seat increased by 21.7% to £69.03 – this is operational leverage in reverse, offset by a reduction in the cost of fuel.

Revenue per seat fell 10.6% to £54.35 – a solid H1 combined with a terrible H2.

Loss before tax: £1,273 million (or £835 million after adjustments).

Net debt: £3.1 billion. Available liquidity is £3.1 billion.

Outlook – “we retain the flexibility to ramp up capacity when we see demand return”. No specific guidance for 2021, which is probably fair enough.

My view

It’s obviously quite a grim situation.

It does continue to maintain that is has “a significant cost advantage compared to legacy carriers“.

The liquidity is impressive. Cash of £2.3 billion (Sep 2020), but the most recent quarterly cash burn was £651 billion. Cost cuts are obviously very important, in this situation.

Gross borrowings are £2.7 billion and there are lease liabilities of £710 million.

I can see it pulling through, with the help of the aforementioned cost cuts. The market cap of c. £3.5 billion appears to price that in, so I don’t find the shares too exciting at this level, I’m afraid.



That’s it, see you tomorrow!





Wordpress (4)
  • comment-avatar

    Graham I would be happy with 6pm like this evening. But most importantly I think, give yourself time to reflect and analyse the RNS’s etc. Your considered thoughts are more important to me than rushing to hit any artificial deadline

  • comment-avatar

    I wish I had £651 billion to burn in one quarter 🙂

  • comment-avatar

    Thanks Graham. Very interesting. I’m very much an amateur here so in addition to the company specifics I always find your analyses a useful reminder of how little I know.

  • Your Cart