At first glance the latest set of financials from Flybe Group (LSE: FLYB) may not have provided much for growth hunters to sink their teeth into.
The low-cost airline announced that revenues soared 13.4% in the year to March 2017, to £707.4m, but it swung to a pre-tax loss of £26.7m from a profit of £6.8m a year earlier.
Flybe had £4.8m worth of IT-related writedowns to thank in some part for last year’s reversal, and the business warned of another £6m worth of similar costs in the present period due to contract cancellations.
But this was not the only cause for some hand-wringing, with Flybe’s ambitious expansion strategy appearing to have overshot the runway. The company announced that it had increased capacity 12.3% in fiscal 2017, to 12.7m seats, but that traveller numbers rose just 7.6% to 8.8m.
As a result, Flybe plans to dial back the number of planes in operation, and has pencilled-in the return of six leased Bombardier craft to optimise its fleet more effectively looking ahead.
While Flybe may have been hasty in spreading its wingspan, the stratospheric growth in passenger numbers across the continent still offers the Exeter flyer with plenty of upside further out. Indeed, airport trade association ACI Europe announced this week that average passenger traffic rose 14.1% year-on-year in April.
The City certainly expects earnings at Flybe to snap higher again following last year’s turbulence, and have pencilled-in growth of 39% and 179% for the years to March 2018 and 2019 respectively.
Consequently the budget flyer deals on a forward P/E ratio of 14.2 times, a little distance below the widely-considered value watermark of 15 times.
So with Flybe still trading just off recent record lows of 33p per share, I reckon now is a great time for dip buyers to dive in.
I believe that BGEO Group (LSE: BGEO) is also on course to deliver stonking earnings growth in the years ahead, thanks to its exposure to fast-growing Eastern Europe.
The business, which incorporates regional powerhouse Bank of Georgia, saw revenues rocket 20.2% during January-March, to GEL221.4m (one Georgian Lari is worth about 32p at the moment). This drove profits 24.3% higher, to GEL108.2m.
BGEO is the country’s largest retail banking operator with some 2m customers, but owing to the relatively low industry penetration rates, as well as the strength of the Georgian economy, it still has plenty of room to go. The financial firecracker noted that Georgian GDP grew 5% in the first quarter.
The number crunchers expect BGEO to keep earnings rolling comfortably higher, and have chalked in expansion of 26% in 2017 and 15% next year. And these projections make the banking behemoth irresistible value for money.
Not only does BGEO deal on a meagre forward P/E ratio of 9.4 times, but the stock also carries a sub-1 PEG multiple of 0.4. I reckon the FTSE 250 bank is worthy of serious attention at current prices.
Royston Wild has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.