TIDMGMAA
RNS Number : 3754N
Gama Aviation PLC
22 September 2023
The following amendment has been made to the 'Interim Results'
announcement released on 22 September at 07:16 under RNS No
3509N.
Under Note 6, under 'Secured borrowing at amortised cost', the
amount for 'Other loans' has been corrected to 1,154
All other details remain unchanged.
The full amended text is shown below.
The information contained within this announcement is deemed to
constitute inside information as stipulated under Article 7 of the
Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK
domestic law by virtue of the European Union (Withdrawal) Act 2018.
Upon the publication of this announcement, this inside information
is now considered to be in the public domain.
22 September 2023
Gama Aviation Plc (AIM: GMAA)
("Gama", "the Company" or "the Group")
Unaudited interim results for the six months to 30 June 2023
Continuing Progress in the Implementation of our Strategy in a
Challenging Economic Environment.
Gama Aviation Plc, the business aviation services company, is
pleased to announce its unaudited interim results for the six
months to 30 June 2023.
Financial Summary
Adjusted(1) $m Statutory $m
--------------------------- ---------------------------- ------------------------
Jun-23 Jun-22(3,4) Jun-23 Jun-22(3,4)
Unaudited Unaudited Unaudited Unaudited
--------------------------- --------------- ----------- ----------- -----------
Revenue 145.0 139.3 145.0 139.3
Gross profit(3) 27.6 26.7 27.6 26.7
Gross profit % 19.0% 19.2% 19.0% 19.2%
EBITDA(2) 7.9 9.2 6.4 6.3
EBIT 0.3 1.8 (1.8) (1.7)
Loss for the period (2.7) (0.8) (4.5) (3.8)
Basic and diluted loss per
share (cents) (4.2) (1.6) (7.0) (6.4)
--------------------------- --------------- ----------- ----------- -----------
(1) The Alternative Performance Measures (APMs) are defined in
Note 4 of the notes to the financial statements and reconciled to
the nearest IFRS measure. APMs include Adjusted Revenue, Adjusted
Gross Profit, Adjusted EBIT and Net debt. APMs also include organic
and constant currency Revenue, Gross Profit and Adjusted EBIT
(2) Statutory EBITDA represents earnings before interest, tax,
depreciation, and amortisation. Adjusted EBITDA is Statutory EBITDA
after Adjusting Items. Adjusted EBITDA and Statutory EBITDA provide
management and investors with useful additional information about
the Group's performance and profitability.
(3) Depreciation charges of $2,788,000 in the prior period, have
been reclassified from administrative expenses to cost of sales to
conform with the presentation in the Annual Report and Accounts
2022. This has resulted in a reduction of $2,788,000 in gross
profit.
(4) To aid comparability, a further version of the H1 2022
results has also been calculated on a constant currency basis using
a constant foreign exchange rate of $1.23 to GBP1, being the
cumulative average USD/GBP exchange rate for 2023, instead of the
reported exchange rate of $1.30 to GBP1 for H1 2022. On a constant
currency basis H1 2022 Revenue is $136.0, Gross Profit is $26.1m,
Gross Profit percentage is 19.2%.
Financial Highlights
-- Revenue growth of 4% (7% at constant currency) to $145.0m (H1 2022: $139.3m)
-- Gross profit up 3% (6% at constant currency) to $27.6m (H1 2022: $26.7m)
-- Gross profit margin down by 0.2 percentage points ('ppt') at 19.0% (H1 2022: 19.2%)
-- Adjusted earnings before interest and tax ('Adjusted EBIT') of $0.3m (H1 2022: $1.8m)
-- Adjusted EBIT includes foreign exchange losses of $0.3m (H1
2022: $1.4m gain) $1.4m Statesville start-up costs, $1.1m Las Vegas
restructuring expenses and a gain of $2.6m for a legacy debtor
recovery (HY22: one-off items included a gain of $1.0m for release
of PPP grant repayment provision, recovery of $0.6m of branding
fees and operating losses of $1.0m associated with closure of
FXE).
-- Excluding foreign exchange gains and losses and one-off
items, adjusted EBIT is $0.5m (H1 2022: loss $0.2m)
-- Net cash inflow from operating activities of $11.6m (H1 2022: $15.5m)
-- As at 30 June 2023 cash balances were $11.6m (FY 2022: $22.4m)
-- Net debt, inclusive of $53.9 (FY 2022: $52.7) of lease
obligations, was $66.1m as at 30 June 2023 (FY 2022: $66.4m). Net
bank debt decreased by $12.3m to $22.5m (FY 2022: $34.8m)
-- As at 21 September 2023, cash balances were $9.1m.
Outlook
The Group continues to make steady progress in the execution of
its strategy. D espite the strong growth in the US, the Group
delivered modest revenue growth overall during the period against
the backdrop of a challenging economic and business environment,
but as expected, margins were impacted by inflationary cost
pressures. With little prospect of any significant change in the
macro-economic conditions coupled with the continuing geopolitical
uncertainties, the Board remains understandably cautious in its
outlook for the second half of the year.
However, continuing focus on optimising operational performance
and controlling costs is helping to mitigate the impact on margins
whilst the inflationary and adverse economic conditions persist in
the UK and ensuring the Group is well placed to restore and grow
these margins when conditions ease.
Commenting on the half year results, Marwan Khalek, Chief
Executive said:
"The H1/23 results demonstrate the progress the Group continues
to make in consolidating and building upon the significant
improvement in financial performance that has been delivered over
the last couple of years. This is the result of our diligent
implementation of our organic growth strategy and the optimisation
of our operational platform and cost base whilst continuing to
deliver our clients' mission.
These results, delivered against a backdrop of a very
challenging economic and business environment, again serve to
illustrate the robustness and resilience of our business, as well
as the unwavering commitment and dedication of our people to
delivering our clients' mission.
Despite this uncertain economic backdrop, the pipeline of
business opportunities continues to grow, and the Group remains
well positioned for the future."
-S-
For more information and persons responsible for arranging the
release of this announcement on behalf of the Company contact:
Gama Aviation Plc +44 (0) 1252 553029
Marwan Khalek, Chief Executive Officer
Michael Williamson, Chief Financial Officer
Camarco +44 (0) 20 3757 4992
Ginny Pulbrook
Geoffrey Pelham-Lane
WH Ireland +44 (0) 20 7220 1666
James Joyce
Ben Good
Gama Aviation - Notes to Editors
Founded in 1983 with the simple purpose of providing aviation
services that equip its customers with decisive advantage, Gama
Aviation Plc (LSE AIM: GMAA) is a highly valued global partner to
blue chip corporations, government agencies, healthcare trusts and
private individuals.
The Group has three global divisions: Business Aviation
(Aircraft Management, Charter, FBO & Maintenance), Special
Mission (Air Ambulance & Rescue, National Security &
Policing, Infrastructure & Survey, Energy & Offshore); and
Technology & Outsourcing (Flight Operations, FBO, CAM software,
Flight Planning, CAM & ARC services).
More details can be found at: http://www.gamaaviation.com/
Chief Executive Officer's Statement
Introduction
The H1/23 results demonstrate the progress the Group continues
to make in consolidating and building upon the significant
improvement in financial performance that has been delivered over
the last couple of years. This is the result of our diligent
implementation of our organic growth strategy, the optimisation of
our operational platform and cost base whilst continuing to deliver
our clients' mission.
This has been underpinned by significant organic investment in
new facilities in our US MRO business, the development of
infrastructure for our recently awarded Special Mission contracts
that come on stream at the start of 2024 and in our T&O SBU so
as to ensure we maintain our leading technology platforms for the
future.
Over the last year or so, the Group has successfully secured
alternative debt for its maturing credit facilities allowing it to
maintain the necessary liquidity levels for its on-going
operations. However, efforts to secure the additional funding
necessary to support the Group's hangar construction projects are
behind schedule due to the challenging credit markets.
These results, delivered against a backdrop of a very
challenging economic and business environment, again serve to
illustrate the robustness and resilience of our business. They are
also testament to the efforts and dedication of our people and
their unwavering commitment to upholding our values, which remains
critical to retaining the trust and loyalty of our existing clients
and to the winning of new business.
Despite this uncertain economic backdrop, the pipeline of
business opportunities continues to grow, and the Group remains
well positioned for the future.
Strategic Business Unit Update
Business Aviation
The Business Aviation SBU delivered a solid performance thanks
largely to strong revenue and profit growth in our US MRO business,
the world's largest business aviation market, which we operate
under our Jet East brand.
Further investments in the first half of 2023 saw the opening of
our new flagship retail base maintenance facility in Statesville,
North Carolina. During the same period, and working collaboratively
with one of our major clients, we consolidated the base maintenance
services we previously provided at Las Vegas into our Millville
facility, which will optimise efficiencies and service delivery and
transitioned the released capacity at Vegas to support additional
line maintenance demand there. These highly strategic investments
are expected to ensure that Jet East continues to deliver solid
revenue and profit growth into the future.
Elsewhere, the other three business lines within this SBU
(Aircraft Charter and Management, FBO services and MRO services in
Europe) have been the most challenged by the economic conditions
which have limited growth and impacted margins. However, the
pipeline of new business opportunities across these business lines
is encouraging.
Special Mission
The Special Mission SBU delivered another strong performance
which is underpinned by its stable long term government contracts.
Inflationary cost pressures have impacted margins, but this has
been partially mitigated by increased revenues resulting from
appropriate contract provisions.
The SBU is currently experiencing a high level of bid activity
both in terms of the periodic re-competing of some of its current
contracts as well as the strong pipeline of new opportunities.
Alongside this, the SBU continues to make very good progress in the
standing up of its capabilities to support the commencement of
operations in January 2024 of the two recent major contract awards
in Wales and the North Sea. This contracts awards, which we
announced towards the end of last year will deliver significant
revenue and profit growth for the SBU.
Technology & Outsourcing ('T&O')
The T&O SBU continues to deliver leading edge technology and
outsourcing services to support the business sector. We continue to
invest in our industry leading SaaS platform, which we deliver
though our myairops brand.
There is extensive interest in the product and a strong pipeline
of qualified prospects, but client capture has been slower than
expected. This is largely due to customers delaying their
transition decisions due to other priorities during this uncertain
economic period. However, the continuing engagement with these
customers is encouraging and management remains positive about the
prospects for this SaaS offering and the opportunity to develop it
into a market leading service. Sales and marketing efforts are very
focused on growing our share of the North American market, which is
the world's largest.
The skill shortages in the technology sector are impacting costs
and development timelines, and consequently margins.
H1 2023 Operational & Financial Performance
The Operational Performance report and CFO Finance review that
follow provide detailed segmental analysis and financial commentary
on the operational and financial performance of the Group.
Outlook
The Group continues to make steady progress in the execution of
its strategy. D espite the strong growth in the US, the Group
delivered modest revenue growth overall during the period against
the backdrop of a challenging economic and business environment,
but as expected, margins were impacted by inflationary cost
pressures. With little prospect of any significant change in the
macro-economic conditions coupled with the continuing geopolitical
uncertainties, the Board remains understandably cautious in its
outlook for the second half of the year.
However, we are continuing to focus on optimising operational
performance and controlling costs which is helping to mitigate the
impact on margins whilst the inflationary and adverse economic
conditions persist in the UK and ensuring the Group is well placed
to restore and grow these margins when conditions ease.
Marwan Khalek
Chief Executive Officer
Group Operational Performance Review
Revenue(1)
$'000
H1 2023 H1 2022
Unaudited Unaudited
------------------------- ----------- -----------
Business Aviation 115,418 108,792
Special Mission 27,091 27,245
Technology & Outsourcing 2,446 2,639
Branding Fees - 625
--------------------------- ----------- -----------
Total 144,955 139,301
--------------------------- ----------- -----------
(1) There are no Adjusting Items that impact Revenue. To aid
comparability 2022 results have been calculated on a constant
currency basis. See note 4 for more details.
Gross Profit(1,2)
$'000
H1 2023 H1 2022(1,2)
Unaudited Unaudited
------------------------- ----------- -------------
Business Aviation 20,750 17,039
Special Mission 5,528 7,168
Technology & Outsourcing 1,334 1,889
Branding Fees - 625
Total 27,612 26,721
--------------------------- ----------- -------------
(1) There are no Adjusting Items that impact Gross Profit. To
aid comparability 2022 results have been calculated on a constant
currency basis. See note 4 for more details.
(2) Depreciation charges of $2,788,000 in the prior year have
been reclassified in the profit and loss account to cost of sales
to conform with the disclosure in the Annual Report and Accounts
2022. This has resulted in a reduction of $2,788,000 in gross
profit and is attributable to Business Aviation ($327,000), Special
Mission ($2,440,000) and Technology & Outsourcing
($21,000).
EBIT
$'000
Adjusted Statutory
------------------------- ---------------------- ------------------------
H1 2023 H1 2022 H1 2023 H1 2022
Unaudited Unaudited Unaudited Unaudited
------------------------- ---------- ---------- ----------- -----------
Business Aviation 545 (797) (1,013) (3,807)
Special Mission 2,841 2,302 2,806 2,260
Technology & Outsourcing (1,499) (493) (1,632) (636)
Branding Fees - 625 - 625
Central Costs (1,552) 137 (1,971) (130)
------------------------- ---------- ---------- ----------- -----------
Total 335 1,774 (1,810) (1,688)
------------------------- ---------- ---------- ----------- -----------
The above Group results are explained in detail below.
Business Aviation
Business Aviation is focused on the delivery of the following
lines of business to clients principally in the top three regional
business aviation markets: the US, Europe, and the Middle East.
/ Management. The operational management of an aircraft (or
fleet), and its crew, that the owner wishes to place on one of the
Group's air operating certificates ("AOCs")
/ Charter. The sale of available flight hours on aircraft to
charter brokers or to direct clients worldwide
/ FBO. The management of our strategically positioned fixed base
operations at airports in the UK, Channel Islands and Middle
East
/ MRO. The delivery of comprehensive maintenance, repair and
modification solutions that support business aviation aircraft
operators and owners.
Business Aviation MRO in the US has a dedicated management team
and is separately reviewed by the Group Chief Executive Officer who
acts as the Chief Operating Decision Maker ('CODM'). Therefore,
Business Aviation MRO US has been presented separately from
Business Aviation excluding MRO US which falls under a separate
management team and is separately reviewed by the CODM.
Unaudited Adjusted EBIT
$'000
BA MRO US BA excluding MRO US Total
--------- -------------------------- ------- ----------------------------- ---------------------------------------
H1 Constant Constant Constant
H1 2022 currency Rebased currency H1 2022 Rebased currency
2023 (2) growth(1) H1 2023 H1 2022 H1 2022 growth(1) H1 2023 (2) H1 2022 growth(1)
--------- ------ ------ ---------- ------- ------- -------- ---------- ------- ------- --------- ----------
Revenue 70,701 55,473 27% 44,717 53,319 51,518 (13%) 115,418 108,792 106,991 8%
--------- ------ ------ ---------- ------- ------- -------- ---------- ------- ------- --------- ----------
Gross
profit 14,779 12,045 23% 5,971 4,994 4,910 22% 20,750 17,039 16,955 22%
--------- ------ ------ ---------- ------- ------- -------- ---------- ------- ------- --------- ----------
Gross
profit % 20.9% 21.8% 13.4% 9.4% 9.5% 18.0% 15.7% 15.8%
--------- ------ ------ ---------- ------- ------- -------- ---------- ------- ------- --------- ----------
Adjusted
EBIT(1) 885 (66) (340) (731) 545 (797)
--------- ------ ------ ---------- ------- ------- -------- ---------- ------- ------- --------- ----------
(1) The Alternative Performance Measures (APMs) are defined in
Note 4 of the notes to the interim financial statements and
reconciled to the nearest IFRS measure. APMs include Adjusted
Revenue, Adjusted Gross Profit, Adjusted EBIT and Net debt. APMs
also include organic and constant currency Revenue, Gross Profit
and Adjusted EBIT.
(2) Depreciation charges of $2,788,000 in the prior year have
been reclassified in the profit and loss account to cost of sales
to conform with the disclosure in the Annual Report and Accounts
2022. This has resulted in a reduction of $2,788,000 in gross
profit and is attributable to Business Aviation ($327,000), Special
Mission ($2,440,000) and Technology & Outsourcing
($21,000).
Overall, the Business Aviation SBU grew its revenues by 8% on a
constant currency basis to $115.4m. Gross profit was up 22% on a
constant currency basis to $20.8m.
The US business has seen increased revenues and gross profits
from all key business lines, which led to 27% growth. Gross profit
also improved, up 23% to $14.8m (H2 2022: $12.0m).
The US Adjusted EBIT was $0.9m after investments in startup
activities at the Statesville facility ($1.4m) and the transition
of the Las Vegas facility to tier one status ($1.1m).
In the BA ROW the number of aircraft under management decreased
compared with prior period and this resulted in lower revenue.
Improved gross profit benefitted from higher profit allocation to
BA ROW maintenance activities in relation to work undertaken to
support Special Mission contracts. The improvement in BA ROW
adjusted EBIT reflects the improved gross profits, combined with
the recovery of previously impaired debtors, partially offset by
re-allocation of overheads to the BA ROW MRO activities.
USD'000s BA MRO US BA excluding MRO US Total
----------------------------------------------------------- ---------------- --------------------- ----------------
H1 2023 H1 2022 H1 2023 H1 2022 H1 2023 H1 2022
----------------------------------------------------------- ------- ------- ---------- --------- ------- -------
Adjusted EBIT (1) 885 (66) (340) (731) 545 (797)
----------------------------------------------------------- ------- ------- ---------- --------- ------- -------
Exceptional items - integration and business
re-organisation costs - (244) - - - (244)
----------------------------------------------------------- ------- ------- ---------- --------- ------- -------
Exceptional items - deferred consideration adjustment - 243 - - - 243
----------------------------------------------------------- ------- ------- ---------- --------- ------- -------
Exceptional items - profit on disposal of entity - - - 126 - 126
----------------------------------------------------------- ------- ------- ---------- --------- ------- -------
Exceptional items - impairment of goodwill - (787) - - - (787)
----------------------------------------------------------- ------- ------- ---------- --------- ------- -------
Exceptional items - impairment of assets under construction - - (98) (749) (98) (749)
----------------------------------------------------------- ------- ------- ---------- --------- ------- -------
Long-term employee incentive plan (1,026) (956) - - (1,026) (956)
----------------------------------------------------------- ------- ------- ---------- --------- ------- -------
Share-based payments 2 (201) (14) (18) (12) (219)
----------------------------------------------------------- ------- ------- ---------- --------- ------- -------
Amortisation (369) (368) (53) (56) (422) (424)
----------------------------------------------------------- ------- ------- ---------- --------- ------- -------
EBIT (508) (2,379) (505) (1,428) (1,013) (3,807)
----------------------------------------------------------- ------- ------- ---------- --------- ------- -------
(1) The Alternative Performance Measures (APMs) are defined in
Note 4 of the notes to the interim financial statements and
reconciled to the nearest IFRS measure. APMs include Adjusted
Revenue, Adjusted Gross Profit, Adjusted EBIT and Net debt. APMs
also include organic and constant currency Revenue, Gross Profit
and Adjusted EBIT
Exceptional items include: -
-- Impairment charges of $98k (H1 2022: $749k) relating to
assets under construction at the Sharjah Business Aviation
Centre.
-- There were various other H1 2022 charges which were not
repeated in H1 2023. These relate to the cost of integrating Jet
East into Business Aviation ($244k); release of the performance
related deferred consideration relating to the US acquisition
($243k); gain on the sale of Gama International Saudi Arabia
($126k) and impairment of goodwill associated with the closure of
the paint and interior completion operations at FXE ($787k)
Other tabulated items include: -
-- The Jet East long-term incentive scheme $1,026k (H1 2022:
$956k) relating to senior executives' incentives agreed at the time
of acquisition
-- Share-based payments charges of $12k (H1 2022: $219k)
-- Amortisation of the acquired intangibles of $422k (H1 2022: $424k)
Special Mission
The Special Mission SBU provides the mission expertise to assist
governments and businesses in exploiting a variety of aviation
assets (principally fixed wing and helicopters) within the
following sectors:
/ Air Ambulance & Rescue. The delivery of fixed wing and
rotary mission solutions to the governments of Scotland, Jersey and
Guernsey as well as the approximately 21 helicopter air ambulance
charities operating within the UK
/ National Security & Law Enforcement. Providing
"intelligence as a service" aviation platforms to the UK government
to protect the national interest
/ Infrastructure & Survey. The monitoring of critical
national infrastructure for the purposes of failure monitoring,
environmental controls, mapping or other such studies
Rebased (1) Constant currency growth (1)
USD'000s H1 2023 H1 2022 (2) H1 2022
----------------- ----------------- ------------ ------------ -----------------------------
Revenue 27,091 27,245 25,839 5%
----------------- ----------------- ------------ ------------ -----------------------------
Gross profit(2) 5,528 7,168 6,762 (18%)
----------------- ----------------- ------------ ------------ -----------------------------
Gross profit % 20.4% 26.3% 26.2%
----------------- ----------------- ------------ ------------ -----------------------------
Adjusted EBIT(1) 2,841 2,302
----------------- ----------------- ------------ ------------ -----------------------------
(1) The Alternative Performance Measures (APMs) are defined in
Note 4 of the notes to the interim financial statements and
reconciled to the nearest IFRS measure. APMs include Adjusted
Revenue, Adjusted Gross Profit, Adjusted EBIT and Net debt. APMs
also include organic and constant currency Revenue, Gross Profit
and Adjusted EBIT.
(2) Depreciation charges of $2,788,000 in the prior year have
been reclassified in the profit and loss account to cost of sales
to conform with the disclosure in the Annual Report and Accounts
2022. This has resulted in a reduction of $2,788,000 in gross
profit and is attributable to Business Aviation ($327,000), Special
Mission ($2,440,000) and Technology & Outsourcing
($21,000).
Special Mission has delivered 5% revenue growth on a constant
currency basis in the first half, reflecting inflationary price
adjustments to key contracts. Gross profit has reduced by 18%
reflecting higher profit allocation to BA ROW maintenance
activities which support Special Mission contracts and cost
inflation. Adjusted EBIT increased to $2.8m (H2 2022: $2.3m)
reflecting re-allocation of overheads to the Group's MRO
activities, partially offset by the lower gross profit.
In the Annual Report and Accounts 2022, the Company disclosed
the award of a five-year, multi aircraft, North Sea offshore
contract to Bond Helicopters, the Group's newly created joint
venture with Peter Bond. During the first half of 2023 the Company
incurred costs of $0.5m on various activities associated with
standing up this contract. These costs have been capitalised as a
contract asset and will be amortised over the life of the contract
which is scheduled to commence on 1 January 2024.
USD'000s H1 2023 H1 2022
--------------------- ------- --------
Adjusted EBIT(1) 2,841 2,302
--------------------- ------- --------
Share-based payments - (5)
--------------------- ------- --------
Amortisation (35) (37)
--------------------- ------- --------
EBIT 2,806 2,260
--------------------- ------- --------
(1) The Alternative Performance Measures (APMs) are defined in
Note 4 of the notes to the interim financial statements and
reconciled to the nearest IFRS measure. APMs include Adjusted
Revenue, Adjusted Gross Profit, Adjusted EBIT and Net debt. APMs
also include organic and constant currency Revenue, Gross Profit
and Adjusted EBIT
In addition to the movements discussed above, statutory EBIT
includes share-based payment charges and amortisation relating to
the intangibles acquired as part of the Jersey and Guernsey Air
Ambulance business in 2020.
Technology & Outsourcing
T&O comprises of four lines of business which trades as Gama
Aviation, but with a further two brands, FlyerTech and myairops(R).
The lines of business are Software & Data Services, Ground
Operations, Part-M Services and Maintenance Management &
Advisory Services. The business unit provides Continuing
Airworthiness Management ('CAM') and airworthiness review
certification (ARC) and surveying services for business aviation,
military, and commercial airline operators. myairops(R) has
developed a suite of business aviation products deployed as
"Software as a Service" (SaaS) and mobile app solutions for
aviation operators and charter brokers, flight support companies,
FBOs and regional airports. The Ground Operations line of business
provides trip support services which includes flight planning and
the arrangement of services such as permits, slots and fuel. These
services are provided to business and commercial aviation
customers.
Rebased(1) Constant currency growth(1)
USD'000s H1 2023 H1 2022(1) H1 2022
----------------- --------------- ---------- ----------- ----------------------------
Revenue 2,446 2,639 2,503 (2%)
----------------- --------------- ---------- ----------- ----------------------------
Gross profit(2) 1,334 1,889 1,789 (25%)
----------------- --------------- ---------- ----------- ----------------------------
Gross profit % 54.5% 71.6% 71.5%
----------------- --------------- ---------- ----------- ----------------------------
Adjusted EBIT(2) (1,499) (493)
----------------- --------------- ---------- ----------- ----------------------------
(1) The Alternative Performance Measures (APMs) are defined in
Note 4 of the notes to the interim financial statements and
reconciled to the nearest IFRS measure. APMs include Adjusted
Revenue, Adjusted Gross Profit, Adjusted EBIT and Net debt. APMs
also include organic and constant currency Revenue, Gross Profit
and Adjusted EBIT.
(2) Depreciation charges of $2,788,000 in the prior year have
been reclassified in the profit and loss account to cost of sales
to conform with the disclosure in the Annual Report and Accounts
2022. This has resulted in a reduction of $2,788,000 in gross
profit and is attributable to Business Aviation ($327,000), Special
Mission ($2,440,000) and Technology & Outsourcing
($21,000).
Technology and Outsourcing revenue remained broadly in line on a
constant currency basis. However, increased labour and associated
costs have led to a 25% reduction in gross profits, also on a
constant currency basis. The lower gross profit combined with
higher investment in marketing and intangibles, which increases
amortisation, has resulted in an Adjusted EBIT loss of $1.5m (2022:
Adjusted EBIT loss of $0.5m).
USD'000s H1 2023 H1 2022
--------------------- ------- -------
Adjusted EBIT(1) (1,499) (493)
--------------------- ------- -------
Share-based payments (4 ) (7)
--------------------- ------- -------
Amortisation (129 ) (136)
--------------------- ------- -------
EBIT (1,632) (636)
--------------------- ------- -------
(1) The Alternative Performance Measures (APMs) are defined in
Note 4 of the notes to the interim financial statements and
reconciled to the nearest IFRS measure. APMs include Adjusted
Revenue, Adjusted Gross Profit, Adjusted EBIT and Net debt. APMs
also include organic and constant currency Revenue, Gross Profit
and Adjusted EBIT
Adjustments to EBIT relate to share-based payments and
amortisation of acquired customer relationship intangibles, which
decreased due to the impact of foreign exchange.
Branding Fees
Branding fees were $Nil during the 6 months ended 30 June 2023.
The US branding fee arrangement ended on 2 March 2022, with $625k
being recognised in revenue and gross profit in H1 2022, and $625k
recognised in EBIT in H1 2022.
Financial Review
Adjusted(1) $m Statutory $m
--------------------------- --------------------------- -----------------------
Jun-23 Jun-22(3) Jun-23 Jun-22(3)
Unaudited Unaudited Unaudited Unaudited
--------------------------- --------------- ---------- ----------- ----------
Revenue 145.0 139.3 145.0 139.3
Gross profit(3) 27.6 26.7 27.6 26.7
Gross profit % 19.0% 19.2% 19.0% 19.2%
EBITDA(2) 7.9 9.2 6.4 6.3
EBIT 0.3 1.8 (1.8) (1.7)
Loss for the period (2.7) (0.8) (4.5) (3.8)
Basic and diluted loss per
share (cents) (4.2) (1.6) (7.0) (6.4)
--------------------------- --------------- ---------- ----------- ----------
(1) The Alternative Performance Measures (APMs) are defined in
Note 4 of the notes to the interim financial statements and
reconciled to the nearest IFRS measure. APMs include Adjusted
Revenue, Adjusted Gross Profit, Adjusted EBIT and Net debt. APMs
also include organic and constant currency Revenue, Gross Profit
and Adjusted EBIT
(2) Statutory EBITDA represents earnings before interest, tax,
depreciation, and amortisation. Adjusted EBITDA is Statutory EBITDA
after Adjusting Items. Adjusted EBITDA and Statutory EBITDA provide
management and investors with useful additional information about
the Group's performance and profitability.
(3) Depreciation charges of $2,788,000 in the prior year have
been reclassified in the profit and loss account to cost of sales
to conform with the disclosure in the Annual Report and Accounts
2022. This has resulted in a reduction of $2,788,000 in gross
profit and is attributable to Business Aviation ($327,000), Special
Mission ($2,440,000) and Technology & Outsourcing
($21,000).
Revenue and Gross Profit Bridges
$m
Unaudited
Revenue Gross Profit
----------------------------------------------- ------- -------------
2022 139.3 26.7
Rebasing of 2022 results (3.3) (0.6)
----------------------------------------------- ------- -------------
Rebased Revenue and Gross Profit - 2022 at 2023
exchange rate 136.0 26.1
----------------------------------------------- ------- -------------
Business Aviation 8.4 3.8
Special Mission 1.3 (1.2)
Technology & Outsourcing (0.1) (0.5)
Branding Fee (0.6) (0.6)
2023 145.0 27.6
----------------------------------------------- ------- -------------
Unaudited Statutory EBIT Bridge
$m
Statutory EBIT - 2022 (1.7)
------------------------------------------- ------
Improvement in gross profit 0.6
Movement in foreign exchange gains/losses (1.7)
Increase in administrative expenses (0.5)
Decrease in impairment losses 0.7
Decrease in impairment of goodwill 0.8
------------------------------------------- ------
Statutory EBIT - 2023 (1.8)
------------------------------------------- ------
Unaudited Adjusted EBIT Bridge
$m
Adjusted EBIT - 2022 1.8
Increase in gross profit 0.6
Foreign exchange gains/loss movement (1.7)
Increase in administrative expenses (0.4)
Adjusted EBIT - 2023 0.3
-------------------------------------- ------
Unaudited Adjusted EBIT excluding one-off items
$m
H1 2023 H1 2022
-------------------------------------------------------- -------- --------
Adjusted EBIT 0.3 1.8
Foreign exchange losses/(gains) 0.3 (1.4)
-------------------------------------------------------- -------- --------
Adjusted EBIT excluding foreign exchanges gains losses 0.6 0.4
-------------------------------------------------------- -------- --------
Excluding one off items:
Statesville start-up 1.4 -
Las Vegas restructuring 1.1 -
Legacy debtor recovery (2.6) -
Release of PPP grant repayment provision - (1.0)
Branding fees - (0.6)
Operating losses associated with closure of FXE - 1.0
Adjusted EBIT - excluding one-off items 0.5 (0.2)
-------------------------------------------------------- -------- --------
Impairments
Expenditure of $0.1m (H1 2022: $0.7m) incurred during the year
on the Sharjah Business Aviation Centre project has been impaired,
which brings the total impairments associated with this project to
$15.3m. Whilst the Group is in discussions with investors to secure
the necessary funding for the project, the Board considers that it
is appropriate to recognise an impairment loss in respect of this
expenditure until profits can be forecast with greater
certainty.
In H1 2022, an impairment loss against goodwill of $0.8m was
recognised associated with the closure of the paint and interior
completion operations at Fort Lauderdale Executive Airport.
Finance income and expenses
Finance income of $0.7m reflects interest received on legacy
debts (H1 2022: $1.8m of foreign exchange gains on intercompany
loans). Finance expense of $3.5m (H1 2022: $4.3m) reflects the
decrease in debt levels and foreign exchange losses on debt in
prior year, partially offset by higher interest rates.
Taxation
There is a statutory taxation credit for the period of $0.1m (H1
2022: $0.2m credit). The adjusted taxation for the period is a
$0.3m charge (H1 2022: $0.3m charge).
Earnings per share (EPS)
Weighted average shares in issue increased to 64.0m (H1 2022:
63.7m) following the share issue in May 2022. Adjusted EPS was a
loss of 4.2 cents per share (H1 2022: 1.6 cents). Basic Statutory
EPS was a loss per share of 7.0 cents (H1 2022: 6.4 cents). No
share options, vested or otherwise, have been included in this
calculation.
Credit Facilities
In 2022 and 2023, the Group progressed the establishment of new
funding and credit facilities to replace the RCF of $50m and term
loan of GBP20m with HSBC, which matured on 14 November 2022 and 31
January 2023, respectively. As part of the refinancing, we reported
in the H1 2022 Interim Results the completion of the sale and lease
back of its helicopter assets resulting in a cash inflow of
$27m.
On 28 December 2022, new credit facilities were secured by the
Group's wholly owned US operating subsidiary, Gama Aviation
(Engineering) Inc. ("GAEI"), from a US lender Great Rock Capital
LLC. The $25.0m facilities are for a term of four years and
comprise a combination of a RCF and up to $6.5m of term loans. A
total of $20.0m was available immediately, with a further $5.0m
available contingent on future trading performance. The facilities
are subject to customary financial covenants. $11.0m of the
facility was drawn down to repay GAEI's intercompany loan from the
Company. The balance of the facility is available to fund the
investment capital expenditure and other working capital
requirements of the US business in the execution of the Group's
organic growth strategy in the US.
On 25 January 2023, the Group repaid its GBP20m term loan from
HSBC (which had a maturity date of 31 January 2023) in full
utilising the $11.0m received from the repayment of the Company's
intercompany loan with GAEI, together with cash at hand.
On 3 March 2023, the Group received GBP9.4m ($11.1m) from Close
Brothers Aviation and Marine by way of a loan secured by a mortgage
over the Group's owned aircraft. The loan will be used to fund the
investment capital expenditure and other working capital
requirements of the non-US business.
During 2023, management has continued to work to optimise the
Company's capital structure via further sale and leaseback and
asset sale activities to ensure that the group is fully capitalised
to meet its liquidity requirements and to finance its development
projects.
Net debt and cash flow movements
Net cash inflow from operating activities was $11.6m for the
first half of 2023 compared with $15.5m for the same period in 2022
and includes the benefit of deferred revenue received in advance on
certain special mission contracts in H1 2023
Net debt, exclusive of lease obligation, was $12.1m as at 30
June 2023 (31 December 2022: $13.7m). The repayment of the HSBC
term loan was offset by the draw down of a new term loan with Close
Brothers of $9.4m and a reduction in cash balances by $10.8m to
$11.6m.
Obligations under leases were $53.9m (31 December 2022: $52.7m).
As a result, total net debt remained broadly stable at $66.1m (31
December 2022: $66.4m).
Liquidity
The Group liquidity comprises $11.6m (31 December 2022: $22.4m)
of cash and $8.3m of its $15.0m RCF with Great Rock Capital was
undrawn as at 30 June 2023 (31 December 2022: $9.0m).
Collection of receivables
Following the litigation update provided in the Company's 2022
Annual Report and 2022 Interim release, the Group continues to
pursue the recovery of its long-standing trade receivables through
enforcement actions both in the UK and in other jurisdictions. The
Group has made progress through court proceedings in the UK, which
has resulted in material collections in 2023 and anticipates
further recoveries in due course.
Interim dividend
The Directors do not propose that an interim dividend be paid
for the six months to 30 June 2023 (H1 2022: $nil).
Michael Williamson
Chief Financial Officer
Responsibility Statements
Each directors confirms that to the best of their knowledge:
a) the condensed consolidated set of interim financial
statements has been prepared in accordance with IAS 34 "Interim
Financial Reporting";
b) the interim financial report includes a fair review of the
information required by DTR 4.2.7R (indication of important events
during the first six months and description of principal risks and
uncertainties for the remaining six months of the year); and,
c) the interim financial report includes a fair review of the
information required by DTR 4.2.8R (disclosure of related parties'
transactions and changes therein).
The basis of preparation of the condensed consolidated interim
financial statements is shown in Note 2, and related party
transactions are shown in Note 8. The principal risks and
uncertainties for the remainder of the year are unchanged from
those set out in the Group's recently published statutory financial
statements for the year ended 31 December 2022 and shown below.
The directors consider the principal risks to the business
are:
/ Liquidity and cash resources to support and sustain future
growth of the business
/ Health and safety risks from poor operational performance or
an air accident which damages the Group's reputation
/ Increasing regulatory burden and maintaining oversight on
existing approvals that may result with a non-compliance
/ Changes in political and economic climate that make air
transport less attractive
/ Reliance on key individuals and attrition of key staff that
disrupt business activities
/ Increasing concentration and reliance on a small number of key
customers
/ Cyber threat and information security
Signed on behalf of the Board,
Marwan Khalek
Chief Executive Officer
Gama Aviation Plc
Condensed consolidated income statement
For the period ended 30 June 2023
Period ended 30 June 2022
Period ended 30 June 2023 (2)
Unaudited Unaudited
-------------------------- ----------------------------------- ---------------------------------
Adjusted
Adjusted
Statutory Adjustments result Statutory Adjustments Result
result (1) (1) result(4) (1) (1 4)
$'000 $'000 $'000 $'000 $'000 $'000
-------------------------- ---------- ------------ --------- ---------- ----------- --------
Continuing operations:
-------------------------- ---------- ------------ --------- ---------- ----------- --------
Revenue 144,955 - 144,955 139,301 - 139,301
(112,580 (112,580
Cost of sales(2) (117,343) - (117,343) ) - )
-------------------------- ---------- ------------ --------- ---------- ----------- --------
Gross profit 27,612 - 27,612 26,721 - 26,721
Administrative expenses
(3 4) (29,089) 2,145 (26,944) (29,824) 3,462 (26,362)
Other expenses/income (333) - (333) 1,415 - 1,415
Operating (loss)/profit (1,810) 2,145 335 (1,688) 3,462 1,774
Finance income 723 - 723 1,783 - 1,783
(4,133
Finance expense (3,499) - (3,499) (4,133 ) - )
(Loss)/profit before
tax (4,586) 2,145 (2,441) (4,038) 3,462 (576 )
Taxation credit/(charge)
(note 9) 87 (339) (252) 194 (449) (255)
-------------------------- ---------- ------------ --------- ---------- ----------- --------
(Loss)/profit for the
period (4,499) 1,806 (2,693) (3,844) 3,013 (831 )
Attributable to:
(1,048
Owners of the Company (4,457) 1,806 (2,651) (4,061) 3,013 )
Non-controlling interests (42) - (42) 217 - 217
Earnings per share attributable to the equity holders of the
parent
Basic and diluted (cents) (7.0) 2.8 (4.2) (6.4) 4.8 (1.6)
(1) APMs are defined in Note 4 of the notes to the financial
statements and reconciled to the nearest IFRS measure.
(2) Depreciation charges of $2.8m in the prior period relating
to aircraft and refurbishment, and leasehold property improvements
have been reclassified from administrative expenses to cost of
sales to conform with the current year presentation and to show
depreciation of assets used in the delivery of revenues in cost of
sales. There has been no change in operating loss or loss for the
year in respect of the prior period.
(3) Impairment of assets under construction have been included
in the administration expenses to be consistent with the
presentation in the 2022 Annual report and accounts.
(4) Foreign exchange gain of $1.4m in the prior period has been
reclassified from administrative expenses
to other Income in line with the presentation in the current period.
Gama Aviation Plc
Condensed consolidated statement of comprehensive income
For the period ended 30 June 2023
H1 2023 H1 2022
Unaudited Unaudited
$'000 $'000
-------------------------------------------------- ---------- -----------
Loss for the period (4,499) (3,844)
Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign
operations 1,888 (4,996)
-------------------------------------------------- ---------- -----------
Total comprehensive loss for the period (2,611) (8,840)
-------------------------------------------------- ---------- -----------
Total comprehensive loss is attributable to:
Owners of the Company (2,569) (9,057)
Non-controlling interest (42) 217
-------------------------------------------------- ---------- -----------
(2,611) (8,840)
-------------------------------------------------- ---------- -----------
Gama Aviation Plc
Condensed consolidated balance sheet
As at 30 June 2023
31 December
30 June 2023 2022
Unaudited Audited
$'000 $'000
-------------------------------------- ------------ -----------
Non-current assets
Goodwill 20,134 19,176
Other intangible assets 12,730 13,170
-------------------------------------- ------------ -----------
Total intangible assets 32,864 32,346
Property, plant and equipment 22,691 21,794
Right-of-use assets 39,571 38,194
Trade and other receivables 1,300 1,413
Deferred tax asset (note 9) 6,172 6,100
Total non-current assets 102,598 99,847
-------------------------------------- ------------ -----------
Current assets
Inventories 7,436 7,278
Trade and other receivables 56,295 58,271
Cash and cash equivalents 11,560 22,406
-------------------------------------- ------------ -----------
75,291 87,955
-------------------------------------- ------------ -----------
Total assets 177,889 187,802
-------------------------------------- ------------ -----------
Current liabilities
Trade and other payables (41,792) (46,770)
Current tax liabilities (675) (533)
Obligations under leases (11,685) (11,053)
Provisions (1,751) (2,250)
Borrowings (note 6) (8,593) (31,225)
Deferred revenue (17,918) (9,214)
Deferred consideration - (335)
-------------------------------------- ------------ -----------
(82,414) (101,380)
-------------------------------------- ------------ -----------
Total assets less current liabilities 95,475 86,422
-------------------------------------- ------------ -----------
Non-current liabilities
Borrowings (note 6) (15,097) (4,883)
Obligations under leases (42,254) (41,628)
Provisions (607) (885)
Trade and other payables (4,792) (3,663)
Deferred tax liabilities (note 9) (1,116) (1,206)
(63,866) (52,265)
-------------------------------------- ------------ -----------
Total liabilities (146,280) (153,645)
-------------------------------------- ------------ -----------
Net assets 31,609 34,157
-------------------------------------- ------------ -----------
30 June 2023 31 December 2022
Unaudited Audited
$'000 $'000
--------------------------- ------------ ----------------
Shareholders' equity
Share capital 958 958
Share premium 63,712 63,712
Foreign exchange reserve 34,989 34,987
Other reserves (27,992) (29,880)
Accumulated losses (40,388) (35,992)
--------------------------- ------------ ----------------
Total shareholders' equity 31,279 33,785
Non-controlling interest 330 372
--------------------------- ------------ ----------------
Total equity 31,609 34,157
--------------------------- ------------ ----------------
Gama Aviation Plc
Condensed consolidated statement of changes in equity
For the period ended 30 June 2023
Foreign Total
Share Share Other exchange Accumulated shareholders' Non-controlling Total
capital premium reserves reserve losses equity interest equity
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
--------------- -------- --------- --------- --------- ------------ -------------- ---------------- ----------
Balance
at 1 January
2022 954 63,502 34,997 (24,722) (27,301) 47,430 93 47,523
Loss for
the period - - - - (4,061) (4,061) 217 (3,844)
Other
comprehensive
income - - - (4,996) - (4,996) - (4,996)
--------------- -------- --------- --------- --------- ------------ -------------- ---------------- ----------
Total
comprehensive
loss for
the period - - - (4,996) (4,061) (9,057) 217 (8,840)
--------------- -------- --------- --------- --------- ------------ -------------- ---------------- ----------
Share issue 4 211 - - - 215 - 215
Cost of
share-based
payments - - 91 - - 91 - 91
Transfer
for lapsed
options - - (30) - 30 - - -
--------------- -------- --------- --------- --------- ------------ -------------- ---------------- ----------
Balance
at 30 June
2022 958 63,713 35,058 (29,718) (31,332) 38,679 310 38,989
Loss for
the period - - - - (4,798) (4,798) 62 (4,736)
Other
comprehensive
income - - - (162) - (162) - (162)
Total
comprehensive
loss for
the period - - - (162) (4,798) (4,960) 62 (4,898)
Shares issued
in period - (1) - - - (1) - (1)
Cost of
share-based
payments - - 67 - - 67 - 67
Transfer
for lapsed
options - - (138) - 138 - - -
Balance
at 31
December
2022 958 63,712 34,987 (29,880) (35,992) 33,785 372 34,157
Loss for
the period - - - - (4,457) (4,457) (42) (4,499)
Other
comprehensive
income - - - 1,888 - 1,888 - 1,888
--------------- -------- --------- --------- --------- ------------ -------------- ---------------- ----------
Total
comprehensive
loss for
the period - - - 1,888 (4,457) (2,569) (42) (2,611)
Share issue - - - - - - - -
Cost of
share-based
payments - - 63 - - 63 - 63
Transfer
for lapsed
options - - (61) - 61 - - -
Balance
at 30 June
2023 958 63,712 34,989 (27,992) (40,388) 31,279 330 31,609
--------------- -------- --------- --------- --------- ------------ -------------- ---------------- ----------
Gama Aviation Plc
Condensed consolidated cash flow statement
For the period ended 30 June 2023
H1 2023 H1 2022
Unaudited Unaudited
$'000 $'000
------------------------------------------------------- ----------- -----------
Net cash generated by operating activities
Loss before tax (4,586) (4,038)
Adjustments for:
Finance income (723) (1,783)
Finance costs 3,499 4,132
Depreciation - wholly owned assets 2,535 3,166
Depreciation - ROU assets in admin expense 280 338
Depreciation - ROU assets in cost of sales 3,136 2,722
Amortisation of acquired intangible assets 586 598
Amortisation of other intangible assets 1,593 1,163
Impairment of goodwill - 787
Impairment of right-of-use assets - 37
Impairment of assets under construction 98 749
Impairment of leasehold improvements - 124
Loss on disposal of property, plant & equipment - 65
Release of provision in respect of COVID-19 government
support program - (1,000)
Share based payment expense 63 306
------------------------------------------------------- ----------- -----------
Operating cash inflow before movements in working
capital 6,481 7,366
Unrealised foreign exchange movements (288) (2,214)
Decrease in inventories 32 666
Decrease in receivables 3,659 1,131
Non-cash doubtful debt provision expense (22) 108
(Decrease)/Increase in payables (5,389) 1,270
Increase in deferred revenue 7,921 7,369
Decrease in provisions (792) (133)
------------------------------------------------------- ----------- -----------
Cash generated by operations 11,602 15,563
Taxes paid - (30)
------------------------------------------------------- ----------- -----------
Net cash flows from operating activities 11,602 15,533
------------------------------------------------------- ----------- -----------
Cash flows from investing activities
Purchases of property, plant and equipment (3,027) (2,289)
Purchases of intangibles (1,235) (996)
Net cash used in investing activities (4,262) (3,285)
------------------------------------------------------- ----------- -----------
Cash flows from financing activities
Interest paid (1,196) (430)
Interest received 723 -
Lease payments (5,113) (3,782)
Proceeds from borrowings 12,245 6,000
Repayment of borrowings (25,166) (13,003)
Net cash used in financing activities (18,507) (11,215)
------------------------------------------------------- ----------- -----------
Net (decrease)/increase in cash and cash equivalents (11,167) 1,033
Cash and cash equivalents at the beginning of the
period 22,406 10,243
Effect of foreign exchange rates 321 143
------------------------------------------------------- ----------- -----------
Cash and cash equivalents at the end of the period 11,560 11,419
------------------------------------------------------- ----------- -----------
Notes to the interim financial statements
For the period ended 30 June 2022
1. Corporate information
Gama Aviation Plc is a public company limited by shares,
incorporated in the United Kingdom. The address of the registered
office is 1st Floor, 25 Templer Avenue, Farnborough, Hampshire,
England, GU14 6FE. The Company's shares are publicly traded on the
AIM market of the London Stock Exchange.
2. Accounting policies
Basis of preparation
These unaudited interim condensed consolidated financial
statements (the 'interim financial statements') are for the six
months ended 30 June 2023. They have been prepared in accordance
with IAS 34 Interim Financial Reporting. They do not include all
the information required for full annual financial statements and
should be read in conjunction with the consolidated financial
statements of the Group for the year ended 31 December 2022.
The accounting policies set out in the Group's statutory
financial statements for the year ended 31 December 2022 have been
applied in the preparation of the interim financial statements. The
Directors consider that the Group has adequate resources to remain
in operation for the foreseeable future and have therefore
continued to adopt the going concern basis in preparing the interim
financial statements.
Going concern
To support their assessment of going concern, the Directors have
reviewed detailed cash flow projections for the Group for the
period from the date of approval of these interim financial
statements to 31 December 2024. The Directors have also considered
the outlook for the business beyond 31 December 2024 based upon its
updated five-year strategic plan.
The analysis takes account of the following, amongst other,
relevant considerations:
-- Working capital levels and the conversion of profits into cash flows,
-- The recovery of legacy debtor balances,
-- The sale and/or sale leaseback of some of the Group's assets,
-- The fully drawn $5.0m Term Loan and undrawn $1.5m Delayed
Term Loans with Great Rock Capital,
-- The Revolving Credit Facility of up to initially $15.0m with
the potential to increase to $20m (the amount available to be drawn
down is subject to various restrictions) from Great Rock Capital.
Of this facility $8.3m was undrawn as of 30 June 2023,
-- The GBP9.4m ($11.1m) loan from Close Brothers that completed
on 3 March 2023, and which is secured on owned aircraft, and
-- Cash of $11.5m of 30 June 2023 and $9.1m as at 21 September 2023.
The credit facilities with Great Rock Capital are held in the
Company's US subsidiary and are subject to financial covenants and
expire in December 2026.
The RCF is settled and drawn down on a cyclical basis and has
been presented in current liabilities.
The term loan with Great Rock Capital falls due for repayment
over twelve months from the reporting date and has been presented
in non-current liabilities.
The key assumptions in the Board approved base case projections
relate to revenue, profit performance and working capital cash
flows. Additionally, the detailed cashflow projections consider
planned future events within 2023 and 2024, including the
Directors' assessment of:
-- The likelihood of recovery of legacy debtor balances
-- The likelihood of securing the planned funding through the
sale and/or sale lease back of Group assets.
The Directors have also considered a severe but plausible
downside scenario in which EBITDA is lower and working capital
outflows, funding costs and corporation tax rates are higher than
base case projections.
In both the base case scenario and the severe but plausible
downside scenario, the Directors are satisfied that the Group has
sufficient headroom and potential further mitigation actions to
ensure that the Group will remain solvent and be able to pay its
debts as they fall due during a period of at least 12 months from
the date of approval of these interim financial statements.
Accordingly, after making appropriate enquiries and considering
the uncertainties described above, the Directors have, at the time
of approving these interim financial statements, a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future and, consequently,
consider that it is appropriate to adopt the going concern basis in
preparing these interim financial statements.
However, certain assumptions within the cash flow forecasts
relating to recovery of legacy debtor balances and the generation
of funding through the sale and/or and lease back of Group assets
have not been concluded at the time of approval of these interim
financial statements. Furthermore, there is a risk that these
events may not be completed in the time scales planned as they are
not fully under the control of the Group. Consequently, there is a
material uncertainty that may cast significant doubt about the
Group's ability to continue as a going concern.
If one or more of these events do not occur, the Directors
anticipate undertaking additional fundraising and/or cost and cash
saving activities to ensure that the Group is able to meet its
liabilities as they fall due.
The financial statements do not include any adjustments that
would result if the Group were unable to continue as a going
concern.
3. Segment information
Reportable segments are operating segments that either meet the
thresholds and conditions set out in IFRS 8 for separate reporting
or are considered by the Board to be appropriately aggregated into
reportable segments under IFRS 8.
All inter-segment transfers, including the recharge of centrally
incurred costs from Corporate to other operating segments, are
carried out at arm's length prices. The measure of revenue and
gross profit reported to the Chief Operating Decision Maker to
assess the performance is based on external revenue and gross
profit for each operating segment and excludes intra-group revenues
and gross profit.
The results were reviewed by the Group Chief Executive Officer,
who acts as the Chief Operating Decision Maker (CODM) in the SBU
structure. The CODM reviews monthly internal reporting on a
pre-IFRS 16 basis at the operating segment level. The impact on
application of IFRS 16 is reviewed separately ahead of statutory
reporting.
The Group has three SBUs: Business Aviation (Aircraft
Management, Charter, FBO & Maintenance), Special Mission (Air
Ambulance & Rescue, National Security & Policing,
Infrastructure & Survey, Energy & Offshore); and Technology
& Outsourcing (Flight Operations, FBO, CAM software, Flight
Planning, CAM & ARC services). The Group believes this will
provide a direct line of sight for shareholders such that each
SBU's activities in each market, its investment requirements and
its performance can be more easily assessed and understood.
The IFRS 8 operating segments within these global divisions are
Special Mission, Business Aviation MRO US, Business Aviation
excluding MRO US, Technology & Outsourcing, Associates,
Corporate and Branding Fees. The operating segments, except
T&O, met the quantitative thresholds to report separately under
IFRS 8; however, T&O is presented separately as it is of
strategic importance.
A reconciliation of segmental to overall Group performance is
tabulated below:
For the period ended 30 June 2023 For the period ended 30 June
2022
Adjusted Adjusted
EBIT EBIT
Gross Adjusted pre-IFRS Gross Adjusted pre-IFRS
USD'000s Revenue profit EBIT EBIT 16 Revenue profit EBIT EBIT 16
-------------- ---------- --------- ---------- ---------- ---------- --------- -------- ---------- --------- ----------
BA MRO US 70,701 14,779 (508) 885 726 55,473 12,045 (2,379) (66) (202)
BA excluding
MRO US 44,717 5,971 (505) (340) (906) 53,319 4,994 (1,428) (731) (1,007)
-------------- ---------- --------- ---------- ---------- ---------- --------- -------- ---------- --------- ----------
Business
Aviation 115,418 20,750 (1,013) 545 (180) 108,792 17,039 (3,807) (797) (1,209)
Special
Mission 27,091 5,528 2,806 2,841 2,461 27,245 7,168 2,260 2,302 1,683
T&O 2,446 1,334 (1,632) (1,499) (1,498) 2,639 1,889 (636) (493) (519)
Branding
fee - - - - - 625 625 625 625 625
Corporate - - (1,971) (1,552) (1,510) - - (130) 137 202
-------------- ---------- --------- ---------- ---------- ---------- --------- -------- ---------- --------- ----------
Adjusted
Result 144,955 27,612 (1,810) 335 (727) 139,301 26,721 (1,688) 1,774 782
Adjusting
items - - - (2,145) (2,145) - - - (3,462) (3,462)
Application
of IFRS16 - - - - 1,062 - - - - 992
-------------- ---------- --------- ---------- ---------- ---------- --------- -------- ---------- --------- ----------
Statutory
result 144,955 27,612 (1,810) (1,810) (1,810) 139,301 26,721 (1,688) (1,688) (1,688)
-------------- ---------- --------- ---------- ---------- ---------- --------- -------- ---------- --------- ----------
1 Increased unallocated corporate costs reflect unallocated
foreign exchange losses and lower allocation to certain SBU's.
4. Alternative performance measures
The Adjusted result has been arrived at after the following
Adjusting items:
Period ended Period ended
30 June 2023 30 June 2022
$'000 $'000
------------------------------------------ -------------- --------------
Exceptional items:
Transaction costs 263 98
Integration and business re-organisation - 244
Legal costs 109 93
Impairment of goodwill - 787
Impairment of assets under construction 98 749
------------------------------------------ -------------- --------------
Total exceptional items 470 1,971
Share-based payments expense 63 306
Long-term employee benefits expense 1,026 956
`Amortisation of intangible assets 586 598
Deferred consideration adjustment - (243)
Profit on disposal of subsidiary - (126)
------------------------------------------ -------------- --------------
Adjusting items in EBIT 2,145 3,462
Tax related to adjusting items (339) (449)
------------------------------------------ -------------- --------------
Adjusting items in profit 1,806 3,013
------------------------------------------ -------------- --------------
Transaction costs
Transaction costs during the period of $263k (2022: $98k) relate
to corporate activity of the Group.
Integration and business re-organisation costs
Integration and business re-organisation costs of $244k in H1
2022 relate to Jet East integration related severance costs.
Legal costs
Legal costs in the current and prior year principally relate to
professional fees in relation to ongoing litigation in respect of
legacy cases going back many years, which are now being
successfully closed out.
Impairment of goodwill
The impairment loss in H1 2022 relates to the impairment of the
goodwill associated with the closure of the paint and interior
completion operations at Fort Lauderdale Executive Airport.
Impairment of assets under construction
The impairment loss relates to the impairment of further
development costs incurred during the period in respect of the
Business Aviation Centre at Sharjah International Airport in the
UAE.
Share-based payments
Equity-settled share-based payment charges of $63k (2022:
$306k).
Other long-term employee benefits
Other long-term employee benefits remuneration charge of $1,026k
(H1 2022: $956k) relates to an incentive plan with payments
contractually linked to the continuing employment of executives of
Jet East as well as the business performance of the combined
Business Aviation MRO US.
Amortisation of intangible assets
Acquisition related intangible amortisation relates to acquired
intangible assets (customer relationships and brands) recognised as
part of the accounting for business combinations $586k (H1 2022:
$598k).
Deferred consideration adjustment
The deferred consideration adjustment relates to reconsideration
of total consideration payable as part of the Jet East
acquisition.
Profit on disposal of subsidiary
The profit on disposal in H1 2022 arose on the disposal of the
interest in Gama Aviation Saudi Arabia.
Tax related to adjusting items
The tax charge related to adjusting items was $339k (H1 2022:
$449k).
Organic and constant currency growth
Organic and constant currency growth in Revenue, Gross Profit
and EBIT is a measure which seeks to reflect the performance of the
Group that will contribute to long-term sustainable growth. This
growth excludes the impact of acquisitions or disposals, and
foreign exchange movements. Constant currency growth has been
calculated using a constant foreign exchange rate of $1.23 to GBP1,
being the cumulative average USD-GBP exchange rate for H1 2023, (H1
2022: $1.30 to GBP1). Results of acquired and disposed businesses
are excluded where the results include only part-year results in
either current or prior periods. No adjustment has been made in
this respect.
A reconciliation from organic and constant currency growth in
Revenue to the most directly comparable IFRS measures is set out
below.
For the period ended
30 June 2023 For the period ended 30 June 2022
------------------- ----------------------- ---------------------------------------
% Constant Rebase for
Revenue currency Revenue FX Rebased Revenue
$'000 growth $'000 $'000 $'000
------------------- --------- ------------ -------- ----------- ----------------
BA MRO US 70,701 27% 55,473 - 55,473
BA excluding MRO
US 44,717 (13%) 53,319 (1,801) 51,518
------------------- --------- ------------ -------- ----------- ----------------
Business Aviation 115,418 8% 108,792 (1,801) 106,991
Special Mission 27,091 5% 27,245 (1,406) 25,839
T&O 2,446 (2%) 2,639 (136) 2,503
Branding Fee - (100%) 625 - 625
Total 144,955 7% 139,301 (3,343) 135,958
------------------- --------- ------------ -------- ----------- ----------------
A reconciliation from organic and constant currency growth in
Gross Profit to the most directly comparable IFRS measures is set
out below.
For the period ended
30 June 2023 For the period ended 30 June 2022
------------------- -------------------------- ------------------------------------------
% Constant Rebase for Rebased Gross
Gross Profit currency Gross Profit FX Profit
$'000 growth $'000 $'000 $'000
------------------- ------------- ----------- ------------- ----------- --------------
BA MRO US 14,779 23% 12,045 - 12,045
BA excluding MRO
US 5,971 22% 4,994 (84) 4,910
------------------- ------------- ----------- ------------- ----------- --------------
Business Aviation 20,750 22% 17,039 (84) 16,955
Special Mission 5,528 (18%) 7,168 (405) 6,762
T&O 1,334 (25%) 1,889 (101) 1,789
Branding Fee - (100%) 625 - 625
Total 27,612 6% 26,721 (590) 26,131
------------------- ------------- ----------- ------------- ----------- --------------
Gross Profit
Margin 19.0% 19.2% 19.2%
------------------- ------------- ----------- ------------- ----------- --------------
Net Debt
A reconciliation of the IFRS financial statement line items that
represent the Net Debt APM is tabulated below.
30 June 2023 31 December 2022
$'000 $'000
------------------------------------------- ------------- -----------------
Cash 11,560 22,406
Borrowings (23,690) (36,108)
------------------------------------------- ------------- -----------------
Net Debt before IFRS 16 obligations under
leases (12,130) (13,702)
Obligations under leases (53,939) (52,681)
------------------------------------------- ------------- -----------------
Net Debt (66,069) (66,383)
------------------------------------------- ------------- -----------------
5. Earnings per share ('EPS')
The calculation of earnings per share is based on the earnings
attributable to the ordinary shareholders divided by the
weighted average number of shares in issue during the
period.
Period ended Period ended 30
30 June 2023 June 2022
------------------------------------------------ ------------- ---------------
Numerator
Earnings $'000
Loss on continuing operations attributable
to ordinary equity holders of the parent
for basic earnings (4,457) (4,061)
Adjusting items 1,806 3,013
Loss on continuing operations attributable
to ordinary shareholders for Adjusted earnings (2,651) (1,048)
Denominator
Weighted average number of shares used in
basic and diluted EPS 63,961,279 63,739,456
Loss per share on continuing operations
(cents)
Statutory - Basic and diluted (7.0) (6.4)
Adjusted - Basic and diluted (4.2) (1.6)
------------------------------------------------ ------------- ---------------
Whilst the average share price for the six months ended 30 June
2023 was higher than the exercise price of some outstanding
options, there is no dilutive effect as their effect would be
anti-dilutive.
6. Borrowings
On 28 December 2022, the Group secured a new credit facility
with Great Rock Capital Partners Management LLC ("Great Rock"). The
facility totals $25m and comprises a term loan of $6.5m and a RCF
of $18.5m. $20m of this facility was available immediately, with a
further $5m available contingent on future trading performance.
On 25 January 2023 the Group had repaid in full its GBP20m term
loan with HSBC.
On 3 March 2023, the Group received GBP9.4m ($11.1m) from Close
Brothers by way of a loan secured by a mortgage over the Group's
owned aircraft.
At 30 June 2023
Maturity Facility Drawn (local Drawn (presentation
currency) currency)
-------------------------- -----------
'000 $'000
-------------------------- ----------- ------------ -------------- --------------------
Great Rocks RCF 28-Dec-26 USD 15,000 USD 6,742 6,742
Close Brothers Term loan 24-Apr-28 GBP 9,218 GBP 9,218 11,672
Great Rocks Term loan 28-Dec-26 USD 5,000 USD 4,625 4,625
-------------------------- ----------- ------------ --------------------
Bank borrowings before arrangement fees 23,039
Capitalised loan arrangement fees (503)
--------------------------------------------------------------------- --------------------
Bank borrowings 22,536
--------------------------------------------------------------------- --------------------
The RCF, which is presented in current liabilities, is settled
and drawn down on a cyclical basis.
At 31 December 2022
Maturity Facility Drawn (local Drawn (presentation
currency) currency)
----------------------- ------------
'000 $'000
----------------------- ------------ ------------ -------------- --------------------
Great Rocks RCF 28-Dec-26 USD 15,000 USD 6,000 6,000
HSBC Term loan 31-Jan-23 GBP 20,000 GBP 20,000 24,124
Great Rocks Term loan 28-Dec-26 USD 5,000 USD 5,000 5,000
----------------------- ------------ ------------ --------------------
Bank borrowings before arrangement fees 35,124
Capitalised loan arrangement fees (306)
------------------------------------------------------------------- --------------------
Bank borrowings 34,818
------------------------------------------------------------------- --------------------
7. Related party transactions
During the period, Group companies entered into the following
transactions with related parties who are not members of the
Group:
Sale of services Purchase of services
------------------ ----------------------
H1 2023 H1 2022 H1 2023 H1 2022
$'000 $'000 $'000 $'000
------------------------------------- --------- ------- ----------- ---------
China Aircraft Services Limited - - 11 -
Air Arabia/Felix Trading Company LLC 136 107 75 137
BBGA Ltd - - 12 14
EBAA - - 5 -
Mr Canning Fok 429 7 - -
M Khalek - 5 - -
------------------------------------- --------- ------- ----------- ---------
The following amounts were outstanding at the balance sheet
date:
Amounts owed by Amounts owed to
related parties related parties
------------------- ------------------
H1 2023 H1 2022 H1 2023 H1 2022
$'000 $'000 $'000 $'000
------------------------------------- ---------- ------- --------- -------
Air Arabia/Felix Trading Company LLC - 158 132 125
Mr Canning Fok - - - 67
M Khalek - 6 - -
------------------------------------- ---------- ------- --------- -------
8. Dividends
The Directors do not propose that an interim dividend be paid
for the six months to 30 June 2023 (H1 2022: $nil).
9. Taxation
Period ended 30 June 2023 Period ended 30 June 2022
----------------------------------------- -------------------------------- --------------------------------
Statutory Adjusted Statutory Adjusted
result Adjustments result result Adjustments result
$'000 $'000 $'000 $'000 $'000 $'000
----------------------------------------- --------- ----------- -------- --------- ----------- --------
Corporation tax:
Current year charge 75 - 75 64 - 64
Deferred tax:
Current year (credit)/charge (162) 339 177 (258) 449 191
Total tax (credit)/charge for the period (87) 339 252 (194) 449 255
----------------------------------------- --------- ----------- -------- --------- ----------- --------
The following are the major deferred tax liabilities and assets
recognised by the Group and movements thereon during the current
period.
Fixed asset
Non-deductible and other
acquired temporary
intangibles differences Tax losses Total
$'000 $'000 $'000 $'000
------------------------- --------------- ------------- ----------- -------
At 1 January 2023 (1,206) 628 5,472 4,894
Credit/(charge) in year 90 30 42 162
At 30 June 2023 (1,116) 658 5,514 5,056
------------------------- --------------- ------------- ----------- -------
10. Contingent liabilities
As disclosed in the 2022 Annual Report and Accounts, which were
signed on 7 June 2023, the Company had, at that point, very
recently received a letter before action in respect of a possible
legal claim against it for alleged damages in the sum of circa
GBP2.3m. The Board has now had the opportunity to review this
matter, take advice and intends to rigorously defend the position
of the Company. The Board has concluded that it is unlikely that
there will be a material outflow of funds associated with this
matter.
11. Subsequent Events
In August 2023 the Group entered into a series of transactions
to purchase, sell and leaseback a helicopter to support its Special
Mission contracts in the UK. The Company anticipates that this is
the first of two transactions.
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END
IR GIGDCXDDDGXD
(END) Dow Jones Newswires
September 22, 2023 04:28 ET (08:28 GMT)
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