The return to profitability of Virgin Australia and the appointment of veteran director Peter Warne to the company’s board sends a strong signal that 2023 is the year the airline’s initial public offering will fly.
In her second announcement to staff about the IPO in a month, chief executive Jayne Hrdlicka revealed that Virgin made a profit margin of “Roughly 5 per cent” on its 2023 first-half revenue of $2.5 billion.
Virgin CEO Jayne Hrdlicka is putting in place the building blocks for an IPO. David Rowe In other words, it earned more revenue in the six months to December 31 than it earned in the entire 2022 financial year.
Hrdlicka has a long way to go to match Virgin’s peak profitability in the early 2000s, when its profit margin was about 12 per cent.
The primary reason for being wary of the Virgin IPO is the fact it is being sold by private equity, which has a bad reputation in Australia due to investors buying several high-profile dogs from PE vendors.
It will share with retail and institutional investors Virgin’s upside, including a mix of capital gains and income.
Comparing the Virgin of 2023 with the pre-COVID-19 Virgin is a mistake.
Link: https://observer.com/2023/02/reddits-delayed-ipo-may-mean-ceo-steve-huffman-needs-to-rethink-its-advertising-model/