24th Apr 2019 10:16
LONDON (Alliance News) - Gama Aviation PLC cuts its annual dividend Wednesday after it sank to a loss on exceptional costs, despite revenue rising due to acquisitions in what it described as a "disappointing" financial performance.
In 2018, the aviation services firm sank to a pretax loss of USD30.8 million from a profit of USD15.7 million the year prior. This was despite revenue rising 13% to USD234.8 million from USD207.4 million the year before, though excluding acquisitions revenue was "broadly flat".
Profit performance was hurt by cost of sales rising faster than revenue as well as USD42.7 million in exceptional administrative charges, up from USD4.3 million the year prior. This was primarily due to impairments and other one-off charges such as legal and reorganisation costs.
"2018 has been a year of disappointments and of recognising legacy issues," Gama Chair Simon To said. "Despite not meeting our financial expectations, the company has a sound operational platform and in 2018 saw revenue growth in the US Ground and Asia Air divisions and some modest growth in Europe."
Gama proposed a 2.0 pence per share final dividend, down 27% from 2.75p the year prior. Gama does not pay an interim dividend.
Gama Chief Executive Officer Marwan Khalek added: "While 2018 was a disappointing year in terms of financial performance, it was also a year of transition and change that provides Gama with a solid basis for the future. The fundamentals of our business remain strong and, as CEO, co-founder and major shareholder I am resolved to return to executing our strategic objective of delivering sustainable profitable growth."
"The board expects growth in the US to continue through 2019 but expects more challenging market conditions in Europe, particularly with the continuing uncertainties over Brexit and foreign exchange volatility," Khalek added. "For the Middle East and Asia, absent of any acquisitions, the expectations are for very modest organic growth."
For 2019, Gama expects adjusted earnings before interest and tax to be between USD10.5 million and USD11.5 million. In 2018, adjusted Ebit was USD11.3 million.
Gama also said Non-Executive Director Michael Peagram will retire from the firm at the end of April. With immediate effect, however, Christopher Clarke and Michael Howell have both been appointed non-executives
Shares in Gama were 30% higher at 90.00 pence on Wednesday.
Related Shares:
GMAA.L