FlyBe becomes latest victim of curse of the London floats
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.