Ann: Rex Announces FY20 Full Year Results, page-6

What a result...Would have to be the only airline globally to post an underlying profit in the midst of COVID. A regulated utility...

The audacity of management is staggering...I love it. Put through an impairment equal to the subsidy, recognise a statutory loss and attract a tax benefit of $8m (was otherwise facing a $10m tax bill) while pledging to repay the community by going toe to toe with Qantas, which will coincidentally also benefit Rex ! Lim Kim Hai has delivered a PR masterclass...even Roxy Jacenko would be impressed.

Also, the expansion of their pilot education program via the $9.4m acquisition of ATAA in November already appears to be a prudent deal. Training income came in $7.4m higher than 2019 ($4.6m) at $12m, providing all-important consistent defensive cash flows...and this wasn't even with a full year of revenue, only 8 months. At ~$15m a year with a 15% EBIT margin, valued at 13x this alone is worth $30m of the ~$120m EV (~25%).

There is still significant upside in Rex with the market under appreciating how quickly domestic travel could rebound as summer approaches, irrespective of whether a vaccine is developed. Tourism numbers in Europe have already recovered strongly...