Macquarie Airports (MAP) Share Trading Update

Submitted by Craig Strzelecki on 14 March, 2007 - 17:54

Macquarie Airports (MAP) have an unchanged price target of $4.21 per share from analyst Citigroup Investment Research (CIR). Despite tracking in-line with the analysts' estimate for the first three quarters of FY06, Rome Airport's 4Q06 EBITDA of €59m was markedly below their estimates of €70m due to delays in concluding the sale of its low-margin baggage handling business. Consequently their earnings estimates for MAP have been cut for the next couple of years. Retail revenues grew strongly at 14%pa driven by the opening of new branded shops; refurbishment and expansion of retail space; and growth in Duty Free business. With costs well contained, the analyst estimates an average 2% pa revenue growth will generate 5% pa EBITDA growth until the end of this decade. EBITDA margins should rise to 52% from 45% currently.
The sale of Macquarie Airports (MAP) 34% interest in Rome Airport is one of the options being considered by MAP. Given the rising valuation of the airport assets globally, the stock analyst would not be surprised if the sale took place closer to their valuation of $1.1b than MAP’s BV of $844m. Together with announced sale of its interest in Birmingham Airport and the forecast refinancing of Brussels and Copenhagen airports, MAP is likely to have well in excess of $2bn in cash over the next 12-18 months. Potential acquisition of Qantas domestic terminal in Sydney may precede the purchase of European/ US airports. Any surplus cash is likely to be used to pay a special distribution if the share price stays above its NAV.

Macquarie Airports Limited is listed on the Australian Stock Exchange (ASX) under stock code MAP. You can view their investor website here. MAP was listed on the ASX on 2 April, 2002. Kerrie Mather is the CEO and Max Moore-Wilton the Chairman for Macquarie Airports. MAp is listed on the Australian Stock Exchange, and their objective is to invest in a portfolio of ports. In its IPO prospectus, MAp stated its intention to acquire significant shareholdings which provide influence over the key strategic, commercial and financial decisions affecting its investments. Find out the meaning of the recommendations in this primer. Browse for other stockbroker recommendations. You can use Instalment Warrants to trade MAP. Check your charts and good luck with your share trading!

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