Tuesday, January 16, 2007

MAP selling stake in UK Airport

Macquarie Airports Limited (ASX:MAP) is trying to sell its worst-performing asset which is the Birmingham Airport in the UK. It has a 15.5 per cent stake in Birmingham, the fifth-largest airport in the UK. Analysts believe the lack of control may have contributed to its decision along with the poor numbers bein generated. The facility has been underperforming due to tightness in the discount-flight market, but MAP has no way to influence change.

This shows sound management principles and should be applauded. They are selling out of an underperforming asset which they know they can not improve or value add. You would normally find most managments would sit there and not be bothered to cut the fat from the company, but I am impressed in managements ability to admit they were wrong with the purchase and they are now trying to remedy the situation in the best way possible.

MAP is sitting on a PE ratio of 12-14 with a nice dividend yeild of 6%. Still as essentially a property trust it is not cheap enough and an ideal price would be around $3.10-$3.12.

Good Luck Investing.

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