Alliance Aviation Services Ltd (ASX: AQZ) has asked that its shares be suspended from trade, while the company runs the numbers on what's looking like a major profit downgrade.
The company last Friday asked that its shares be placed in a trading halt, before following that up with a request for a voluntary suspension on Tuesday.
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Time needed to run the numbers
Alliance, which is 15.4% owned by Qantas Airways Ltd (ASX: QAN), told the ASX in a statement that it might need until the start of trade on Friday to collate the required information and release it to shareholders.
It said the figures were likely to surprise the market on the downside.
As the company said:
The voluntary suspension is necessary to assist Alliance in managing its continuous disclosure obligations as Alliance expects to make an announcement to the market in relation to a trading update, which will likely result in Alliance's FY26 earnings being materially lower than analyst consensus estimates of Alliance's FY26 earnings. This is a result of recent repairs and maintenance costs and depreciation charges being higher than anticipated.
Alliance said it needed until as late as Friday morning so that it can "prepare, validate and verify the impact of these increased expenses on its ongoing financial performance, before it releases its trading update to the market''.
Recent results steady
Alliance released its full-year results in August, with joint Managing Director Stewart Tully saying at the time that the company's operating performance was "outstanding".
Alliance delivered a net profit of $82.1 million, down 4.9% on the previous year, on revenue of $760.9 million, up 19.4%.
The company said at the time that organic growth in contract activity was expected to increase in the current financial year, and said it "remains committed to pursuing strategic aviation services transactions that complement our core operations as well as delivering enhanced profitability and generating substantial cash flows''.
Wilsons Advisory in mid-September downgraded its outlook for Alliance shares, lowering its price target from $3.89 to $2.58.
As Wilsons said at the time:
Alliance's recent FY25 result was in line with guidance, but outlook commentary has led us to recalibrate earnings forecasts and consider alternative valuation metrics. We reduce our operating fleet assumptions, which implies a more subdued earnings growth outlook over the medium term.
Alliance shares last traded at $2.53, valuing the company at $407.4 million. The company is scheduled to hold its annual general meeting on 27 November.
