FlyBe becomes latest victim of curse of the London floats

 
David Hellier
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REGIONAL airline group FlyBe yesterday saw its shares fall more than 20 per cent after scaling back guidance for its 2012 profits.

The airline, which raised £60m at the end of last year for European expansion as part of its London flotation, said it had been hit by “an extremely challenging macro-economic backdrop” in its core UK market.

House broker Investec reduced its estimate for profits in 2012 from £37m to £22m, the same as this year, and shares in the company fell to 170p, 125p lower than the float price.

The turbulence in the FlyBe share price will come as a blow to those trying to bring UK companies to market in the City.

Recently a couple of UK floats, Skrill and Edwards, have had to be cancelled, with investors complaining about a lack of faith in new issues.

Market participants partly blame the poor share price performances of a group of recently floated companies, although FlyBe says it has been rocked by economic headwinds.

FlyBe’s advisers said yesterday they remained “chipper” about the group’s prospects.