Posted about this one before here and it certainly looks worthy of buying or placing on the watch list. Looks a genuine recovery stock after the results today.

Shrewd Tip: top investors back dynamic Aero
Published: 10:07 Fri 27 Aug 2004

By Algernon Craig Hall, Secret Buying Correspondent
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Shrewd investors are beginning to warm to former AIM wonder stock Aero Inventory, which ran into problems last year.

Aero (AI.) provides online procurement of aerospace parts to repair and maintenance firms. Its growth has been rapid and it has signed up a number of the industry's big players as clients since it came to market in 2000. However, the final six months of last year presented its shareholders with a raft of disappointments.


Aero's interim results for the six months to the end of 2003 were hit by rising overheads, contract delays, US dollar weakness and the impact of SARs (severe acute respiratory syndrome) on demand from an important Asian customer.


The catalogue of woes has taken the shares from a 2003 470p high to a today's year low of 290p down 2.5p on the day.


The share price performance paints the picture of a thoroughly unloved stock but a number shrewd investors have actually shown renewed interest in Aero recently.


AAA-rated contrarian investor Patrick Evershed picked up 70,000 shares in July for the New Star Select Opportunities fund New Star Select Opportunities, which took its holding to 250,000 or 1.6% of the 46 million company.


Gartmore's star smaller companies stock picker Gervais Williams has also been buying recently. He has bought 10,000 shares so far this month to take the Gartmore UK & Irish unit trust's Gartmore UK & Irish Small Companies holding to 470,000.


Framlington star Brian Watson has a 450,000 share holding in the Framlington Innovative Growth investment trust (FIT).


The underlying state of the business does not seem as bad as recent trading suggests
External factors have been at the root of a number of the company's problems especially the SARs epidemic, US dollar's weakness and delays to a big contract caused by an external union dispute.


Unfortunately there is the chance tough conditions could persist.


SARs may no longer be in the headlines but a lagged effect on aircraft maintenance could continue to subdue Aero's business with HAECO - linked to Cathay Pacific - in Asia. Another negative is the high oil price, which could cause delays to repair and maintenance spending and could possibly mean fewer flights.


Although there are reasons to be wary, much of Aero's recent plight was down to its reliance on the contract with HAECO.


Aero now has three very significant contracts - with HAECO, SR Technics and FLS Aerospace - which should strengthen the group's resilience once they get up and running. The company also continues to win new business.


When Aero's large contracts kick in next year they should have a marked effect on revenue and profit.


Brokers' consensus forecasts suggest turnover has fallen by 6.6 million to 22.5 million in the year to the end of June 2004 but should jump to 47 million in the current year. Profit before tax in the year just gone is predicted to fall by about 600,000 to 2.25 million before leaping in the current year to 8.25 million as delayed big contracts kick in.


The shares are valued at 28 times forecasts for the year just gone and 7.8 times next year's earnings if the group, despite the difficulties, Aero can meet expectations.

Aero has to build up large levels of stock to support new contracts, which makes growth very cash intensive and to date it has relied on share issues to support its expansion. However, the group has recently extended its borrowing facilities from 10 million to 25 million, which should ensure it can take on new business without issuing shares at the current depressed price.


Full year results are expected on 13 September and should meet expectations despite continued weak trading over the final three months of the year. The weakness has been mitigated by profits from the active trading of inventory held by the group.


Aero appears to still have some difficulties but the longer-term picture is encouraging.


The forthcoming results should give shareholders a better view of how the company is faring but there are unlikely to be many positive surprises. Still shrewd investors appear happy to pay the current price for a company that has made such impressive inroads into its market and should benefit once current troubles are over.


It looks like a good time to tuck some shares away for investors not afraid to take a long term view and possibly suffer a knock following the results. For others Aero looks like a good candidate for the watch list.

Please DYOR

cheers GF.

And we have from Killik Brokers this morning this....................

Aero Inventory Final Results



Aero Inventory, the provider of e-based procurement and inventory management solutions to the aerospace industry, has announced its preliminary results for the year ended 30 June 2004. Turnover was 21.1m up 32.8% while pre-tax profit came in at 2.1m, down 26.1% as anticipated in earlier announcements.



After a placing at 400p back in 2003 the shares rose to 460p before have a tough start to 2004. Back in March the group indicated that due to timing issues profit for the year would be below prevailing expectations. The shares got down to around 300p from where they have bounced strongly. These results are encouraging as it appears the disappointment from earlier in the year has not been repeated as can often be the case. The company also said that it has a positive outlook for current financial year underpinned by new contracts, in particular those with FLS Aerospace.



Clearly 2004 will be a black mark on the earnings record of Aero Inventory but looking through this, it still looks an interesting business. If the group can keep to its current forecasts for 2005 and beyond the shares should appreciate from here.

cheers GF

cheers GF

Starting to look positive on the TA side now.



cheers Gf.

Should rise pretty quickly from here if past performance is anything to go by.



cheers GF.

Summary of the results..................

Aero inventory FY pretax slips, as expected; positive on yr ahead UPDATE
AFX


(adds detail throughout)

LONDON (AFX) - Aero Inventory PLC reported a fall in pretax profit for the year to end-June, as anticipated. But the group is positive about the year ahead, which it sees underpinned by new contracts.

The group, which provides e-based procurement and inventory management solutions to the aerospace industry, also said it expects a substantial increase in turnover in the current year.

In the year under review, turnover was up 32.8 pct to 21.1 mln stg from 15.9 mln and pretax profit was 2.08 mln stg, down from 2.81 mln.

The board paid a final dividend of 3 pence, up from 2.3 pence, for a total dividend for the year of 6.0 pence per share, up from 5.3 pence.

As previously indicated, sales from the Group's existing procurement and inventory management contracts in the year under review were lower than expected for a number of reasons, including the prolonged after-effects of the SARS crisis on the HAECO contract, a slow start-up to the SR Technics contract, and the weak US dollar. There was also a delay in finalising important new business, in particular contracts with FLS Aerospace, while the overheads to support this additional business were necessarily in place for much of the period.

The effect on profits of the shortfall in sales from existing contracts was partially offset by a significant contribution from a transaction involving the active trading of the group's inventories of aircraft parts. This trading activity has been significantly developed during the year.

The board said the fall in profits should not obscure the significant progress that Aero Inventory has made over the last twelve months in broadening its customer base among aircraft maintenance and repair companies and, thus, the exposure it has to the world's airlines.

The board said Aero Inventory has now reached critical mass - and the benefits of this should be evident in the financial results for the current financial year.

Based on current monthly revenues, the group's four main contracts - with HAECO, SR Technics, FLS Aerospace (IRL) and FLS Aerospace (UK) - now have potential sales of over 700 mln usd over the remaining lives of the contracts.

Chief executive Rupert Lewin said the company's prime objective for the financial year ending June 30 2005 is to establish a platform of substantial profitability and cash generation.

newsdesk@afxnews.com

cheers GF.

slm/

Up on the day on results. Not much but results were what the City wanted to see.

cheers Gf.

The board said the fall in profits should not obscure the significant progress that Aero Inventory has made over the last twelve months in broadening its customer base among aircraft maintenance and repair companies and, thus, the exposure it has to the world's airlines.

The board said Aero Inventory has now reached critical mass - and the benefits of this should be evident in the financial results for the current financial year.

cheers GF.

Looks like we could get a tick up on these looking at the state of play on volume.

cheers GF.

This ones cracking on up 8.5p in the last half hour.

cheers gf.

Thanks MMs, greatfully accepted.

I see the analysts are nicking my tips again Uk Analyst Just brought this out........................

Buy Aero Inventory at 346.5p
Argues The AIM & OFEX Newsletter

The past year has not been good to holders of Aero Inventory, the parts manager for aircraft builders and repairers. While the shares were trading for as much 490p in October 2003, even after results in line with expectations this week they were selling for as little as 346p.

The SARS outbreak had a lot to answer for in reducing passenger numbers, albeit temporarily, with the knock-on effect of reducing revenues within the aerospace maintenance industry.

Aero Inventory's pipeline of business has been a bit thin and has just shifted into the current year and beyond. Although the HAECO contract has taking its time in getting back to producing pre-SARS revenues for the company, the deals with SR Technics, GAMCO and, in particular, FLS are likely to lead to a bumper year.

Consequently, broker Evolution Beeson Gregory is forecasting revenues to more than double in 2004/2005 to 49.2 million pounds, and pre-tax profits are set to jump five-fold to 10 million pounds.

All being well, this means that EPS should come in at more than 40p per share, making Aero Inventory look cheap indeed at the current price.

Turnover in the year to end June 2004 was up 32% at 21 million pounds, but the pre-tax profit of 2.1 million pounds was down 26% due to the lumpy contract flow. Fully diluted earnings per share of 9.22p were half the level of the previous year.



If investors can see past this bumpiness of earnings, in the current year and beyond the company should continue to operate in a growing market. Aircraft makers and maintenance outfits do not like to carry parts themselves as it is not what they see as their core competency. This means that the trend for outsourcing of inventory functions to companies like Aero Inventory, do nothing but manage parts, should prevail.

Aero Inventory's strategy is to grow its business rapidly and profitably by securing further long-term, sole-supplier contracts. So far, this strategy, barring one or two hiccups, has been working well, and the company provided a positive outlook with its annual results.

We should remember that the long term trend for the airline industry is for passenger numbers to increase. Airlines carried 1.5 billion passengers in 2003, and this is set to grow to three billion by 2015, according to IATA.

However, as always with anything related to the airline industry, there are risks. Another SARS outbreak or terrorist attack could be around the corner. Given the apparent inability of governments to remove these threats, the risk should remain serious considerations for investors. For this reason we rate Aero Inventory as a SPECULATIVE BUY.

Share price: 345p - 348p

Stockmarket: AIM

Symbol: AI.

cheers GF, REMEMBER YOU SAW IT FIRST ON MONEYAM.COM lol.

I note theres more sells than buys but this inbalance should be overcome.

cheers GF.

More buys than sells now and looking strong for a short term run up over the next few weeks.

cheers GF

Good day for Aero Inventory, more expected tomorrow especially if techs in the US keep on the up.

cheers GF.

To top for nelson.

cheers Gf

Down a couple of pence at the open, time to get in cheaper, dont let these run away.

cheers Gf.

Price coming back in as a few buyers go into the market.

cheers GF

Looking for a good week out of this one.

cheers GF.

Wish this one would kick start itself. Mind Im the patient type.

cheers GF.

Starting to really perform now and the next 6 months could see some cracking results.





cheers Gf.

GF: You must have found it pretty lonely on this thread, so this is to let you know that AI has a strong supporter in our investment club, someone in a related operation, and having read it all here, I'm backing efforts to get our club on board.
sd.

Hi Squidd,

its well worth presenting the last results RNS to your club and underlining the OUTLOOK for the next 6 months. Ive quietley made a nice return here and I can see a lot more to come. Best of luck and as always, remain patient.

cheers GF.

Squidd, if you are looking in this might be of use to you................

THIS IS MONEY'S WEEKLY SMALL CAPS

Have we missed Aero Inventory take-off?
Chris Spink, Growth Company Investor
19 September 2005
OUR weekly analysis of the latest developments and hottest tips in the exciting world of Aim companies is written by Chris Spink, analyst at the UK's leading authority on fast-growing companies, Growth Company Investor.


Aero Inventory soars

AEROSPACE supplies specialist Aero Inventory was the pick of Aim last week, seeing its shares soar 18% to a 12-month high of 502.5p. The provider of web-based ways of tracking aeroplane parts reported a 332% leap in pre-tax profits to 7.2m on sales more than doubled to 43.6m during the year to June.

In March the group, which has won a number of long-term contracts in Europe and the Far East over the past year, raised 5m at 340p a share. Chief executive Rupert Lewin is optimistic that further strong growth is possible in the current year, as the new contracts come into effect for a full year for the first time.

Brokers believe pre-tax profits will jump 57% to 11.3m, putting the shares on a forward price-earnings ratio of 10.8. That is reasonably cheap given the stellar growth displayed.

cheers GF.

GF: Club members who are holding AI, won our latest monthly competition for the fastest climber and have asked me to pass on their thanks for your recent posts.
The previous month's winner, was myself with CSB, also one of yours, so thanks yet again. CSB seems to be a particularly robust performer, even managing a tiny gain today in an adverse market. I trust you are still holding this one.
sd.

Many thanks for that squidd.

Yup still holding CSB patiently.

cheers GF.

Techs being hit hard at the moment.

cheers GF.

Still holding these and hoping for a price surge. Still look cheap.

From shares mag today......

The Top Aerospace and Defence Shares:
*Aero Inventory (AI.L) - BAE Systems (BA.L) - Rolls-Royce (RR.L) - VT Group (VTG.L) - Ultra Electronics (ULE.L).

cheers GF.

These still look good value on prospective earnings forecasts.

cheers GF.

A link up with Airbus, cant be bad.

Fundraising at Aero Inventory
MoneyAM
Aircraft component supplier Aero Inventory said it is planning to raise a total of 92.3m through a share placing and rights issue.

The Barnet, Hertfordshire-based company said it plans to raise 7.4m through a proposed underwritten placing of 1,713,680 new ordinary shares.

It said it also plans a 3-for-2 underwritten rights issue of 28,301,274 new ordinary shares at 300p per share to raise 84.9m.

Aero said the exercise, which is expected to raise total net proceeds of about 88.4 mln stg, would allow it to capitalise on a number of important new business opportunities under discussion with potential customers 'including but not limited to possible appointment as a nominated service provider by Airbus'.

CEO, Rupert Lewin, said the fund-raising would significantly improve the company's capital base.

'We believe this is a transformational event for Aero Inventory,' he said.

Aero said the placing price of 433p per share represents a discount of about 4% to yesterday's closing share price while the rights issue subscription price of 300p per share roughly represents a 33.5% discount.

Aero supplies aircraft parts on long term sole supplier contracts and currently has ten such contracts with seven customer groups in the UK, Ireland, continental Europe and Asia Pacific.

The group, whose shares listed on AIM in May 2000, has gone from a loss of 39,000 stg in the year to June 30 2000 to a profit of 7.2 mln stg

It said Airbus intends to appoint two nominated service providers during the first half of 2006 to provide parts supply and stock management to operators of Airbus aircraft worldwide.

It said Airbus already has performed some due diligence on the firm and a significant expansion in its capital base would be 'an important factor when considering Aero Inventory's possible appointment'.

The group added: 'In the event that Airbus does not appoint Aero Inventory, the directors are confident that, given the number of new business opportunities currently under discussion and the group's increased financial resources on completion of the rights issue, it will nevertheless be possible to grow the group's business at a substantial rate.'

It also said today that it has appointed JPMorgan Cazenove as its nominated adviser.


cheers GF.

If Airbus do indeed choose AI. then the shares will have a lot further to go (it is not a dead cert however).
The money from the placing and rights issue forms a very strong foundation should Airbus choose to go elsewhere. However the shares may take a breather without the Airbus contract.
Tremendous long term value all the same.

Agreed Ian.

cheers GF.

Still looks rather cheap.http://www.equitygrowth.co.uk/reports/EGRAeroInventory-04Jan06.pdf

A tip update in shares today.

cheers GF.

Looking relatively strong this one. p/E less than 12.

Greetings. I thought it was a bargain at 370, til it went to 330! What an almighty tree shake. Managed to stay firm as I've cottoned on to this shameless MM behaviour through many years of bitter experience.

As I understand it, they raised a shedload of cash in the hope of a huge order from Boeing or Mcdonnell douglas or something like that. Any rumours/gossip on this?

I was cursing when I missed the post rights issue price so glad to have got in at last.

P.S. JSP interims tomoz.....

JSP yes. Fingers crossed.

Not heard anything on future contracts but Im still holding and this market correction wont have me panic stricken like a lot.

Cheers GF.

From Shares Mag..........

Updates:
*Buy FDM (FDMG.L) and Aero Inventory (AI.).

Director sells big time, no Airbus deal although with Qantas deal things pointing in the right direction

So cheap valuation, strong growth, strong balance sheet.....director sells ??

Confidant, I think we should start worrying if he sells these........


Following the sale, Mr. Dodge is the beneficial owner of 354,794 shares which
represent 0.75% of the current issued share capital of the Company.

About to move up ?

Tightly held, low value and results in early March

sho9uld be good if they break 4...

is this what we have been waiting for....... . Still think strong likelihood of run before results

......obviously wishful thinking

no, I think your right but 4 is strong resistence, any break from there could reach 5 very quickly.
imho, dyor!!!

no, I think your right but 4 is strong resistence, any break from there could reach 5 very quickly.
imho, dyor!!!

....is its this time.... 405p offered no takers yet

and up......

good right up in money week this week, states as good value

Now or never for this one ---results Monday --- hold on to your hats --- that's me hoping by the way

I have these on my radar, was just waiting however for them to close above 4

quiet following results Nothing here for the moment it would seem

For what it's worth EK has gone long.

MS

what would be the offer price.if the bid was successful.

Thanks for the memories and goodnight!

Don't own but amazed this has gone bust. Was a real darling for a number of years and once again shows how a company can go from boom to bust very quickly which surely reaffirms why people shouldn't buy shares and sit on them for a few years especially during a recession.

Many tipster/scribblers have a lot of egg on their faces with this one, but will they apologise for their sttupidity?

A very good example of profit and cash being very different animals. Profits can be massaged so easily (not least by stock valuations) but cash flow statements imo tend to give a truer picture of financial health.

Investors Champion research supports the view that senior management of Aero Inventory were well aware of major problems several months prior to September 09 - when they 'encouraged' investors with main market hopes!

Comment at www.investorschampion.com/research/company/aero-inventory

Grief another failure, due in part to lack of support from Banks. Yet the business supported aircraft (didn't it?), an area that is somewhat dodgy, with passenger numbers down . . . . and the servicing is likley to be the first casualty.

What is a real shame is the involvement of retail shareholders being stripped of their savings by this business outcome.

Clearly the Company was not making the Market aware of their precarious position......I suspect the Company must have been aware of the Bank's concerns some months ago - why was this withheld?
-it is this that should be investigated, to make sure heads roll - and this doesn't happen again. (assuming it did indeed occur, that is).

This was never one of mine, as the sp was always too high.
All IMHO - DYOR.

It will happen again - human nature often makes otherwise decent people do strange things when backed into a corner. Not a great fan of the banks (not least as holder of LLOY and BARC nursing substantial paper losses) but unfair to put much blame for this on them. Management looks to have lost all credibility and in those circumstances no real option but to say no more. Regular cash outflows were the big warning signal that perhaps all was not well.

Killicks strick again.