Final Results

14th Oct 2009 07:00



Air Partner PLC

("Air Partner" or "the Group" or "the Company")

Preliminary results for the 12 months ended 31 July 2009

Air Partner, a leading provider of private aviation services to industry, commerce, governments and private individuals worldwide, today releases full year results for the year ended 31 July 2009.

Highlights

* Sales	down 23% to £194.3m (£251.3m)
* Profit before tax (before exceptionals) * Profit before tax (after exceptionals)	down 57% to £4.0m (£9.2m) down 90% to £0.9m (£9.2m)
* Diluted EPS (before exceptionals) * Diluted EPS (after exceptionals)	down 52% to 29.8p (61.7p) 0.4p loss
* Proposed final dividend maintained	22.6p (22.6p)
* Total dividend for the year	up 2% to 30.7p (30.0p)
* Net Cash at year end	£16.1m

* Group remains profitable, debt free and cash positive

* Difficult trading after a strong Q1

* All areas of the business impacted by very weak trading conditions in H2

* Revenue diversification enabled the core broking division to perform relatively well and increase margins, despite trading conditions

* High overheads at Air Partner Private Jets (APPJ) and sharp deterioration of trading conditions led to significant loss in that business

* Increased profitability in Freight, despite reduced turnover and very challenging market conditions

* Significant action taken to resize business and reduce costs for current trading conditions, after four consecutive years of record profits

* Exceptional items and impairments:

- £0.44m of one-off costs in restructuring and redundancies

- £0.54m written off in developmental spend on the hangar project

- £2.1m impairment recognised on the goodwill valuation of APPJ

* Current trading remains at the weaker levels experienced in H2

 

David Savile, Chief Executive commented: "The past year has not been easy, but we have made significant progress in resizing the business to suit the current trading conditions. Despite the extreme challenges of the last year, Air Partner has remained profitable, debt free, cash positive and highly focused on providing clients with an unrivalled service. While short term uncertainty exists today, the Board remains confident that the driving forces of globalisation, economic growth and deterioration in the commercial airline services will support a sector recovery in the medium term."

14 October 2009

ENQUIRIES:
Air Partner PLC
David Savile	On 14 October	0207 002 1080
	Thereafter	01293 844 805
Temple Bar Advisory		0207 002 1080
Tom Allison		0778 999 8020
Nicola Flynn

Note to editors:

1. Further background information is available at www.airpartner.com.

2. Please ensure "Air Partner" is written in its correct singular form, not in the plural.

3. A presentation of the results will be held at 60 Cannon Street EC4N 6NP at 09:30 today. To attend please contact Temple Bar Advisory on T.020 7002 1080. The presentation will be available at www.airpartner.com.

Air Partner PLC

("Air Partner" or "the Group" or "the Company")

Year end results for the 12 months ended 31 July 2009

Chairman's Statement

It has been a very challenging year, particularly in the aviation sector; only 12 months ago Air Partner reported all time record results and a strong start to trading in Q1 2009. However, despite what has been widely described as the worst trading environment in aviation history, Air Partner has remained profitable. While today's results are significantly down on the prior record position, the Group continues with no debt, significant cash reserves, lean overheads, and the ability to react to new opportunities.

In the period under review, turnover fell by 23% to £194.3m (2008: £251.3m), underlying (before exceptional costs and goodwill impairments) profits fell 57% to £4.0m (2008: £9.2m), and underlying earnings per share decreased by 52% to 29.9p (2008: 62.6p). At the year end the Group cash position was £16.1m (2008: £20.8m) equating to £1.58 per share. After a 50% dividend increase last year, the Board is recommending maintaining the final dividend at 22.6p resulting in a total dividend for the year up 2% at 30.7p (2008: 30.0p), to be paid on 18 December 2009, to shareholders on the register at 13 November 2009.

At its heart, Air Partner is a broking business, and we draw encouragement from the fact that our broking divisions have performed creditably, considering the poor state of the market. In a period of intense competitive pressure the Company has focused its attention, wherever possible, on quality business and accepted that some short term sales decline is inevitable. As a result, despite a reduction in turnover, the average gross margin increased to 12.8% (2008: 11.9%) and underlying broking profitability was £6.5m (down 23% from £8.5m in 2008).

Trading Environment

At the half year, we reported a strong first quarter followed by a very weak second. At that time we anticipated a weaker third quarter, with some seasonal recovery in the fourth. However, in the June Interim Management Statement (IMS) we cautioned that the anticipated seasonal improvement had not materialised, and flagged the need for management to cut costs to adjust the business for reduced demand.

While the initial fall in demand was steep, the rate has slowed since issuing the IMS, and during the summer it stabilised, albeit at lower levels. Reviewing trading today, a year on from the peak of the credit crunch, it is clear that our diversity has been the key to maintaining profitability and a leading position amongst our peers. Across the Group, of our three client sectors, sales to Governments have fallen (down 28%) in the face of many distressed competitors undercutting prices. Sales to the Corporate sector have suffered similar falls (down 30%), stemming from the global loss of confidence, whilst our HNW volumes actually rose (up 22%) - although it should be stressed that this increase was driven by our strong Q1 performance, before the sudden downturn that followed.

Throughout the year the management team has kept a tight focus on strategy. Relative to our peers, Air Partner has consistently demonstrated a strength and resilience uncommon in the sector, with all the core business fundamentals remaining in play today. Air Partner has always been a lean business, but we have further tightened our budgets and reduced capital spend with all of the restructuring costs included in the year under review. 

Trading Divisions

Our primary division, Commercial Jets, achieved sales of £123.7m, representing 64% of Group activity, and £3.5m of operating profit. This performance reflects that we have lost low margin business, but retained premium business. The division has further developed a string of niche market business lines, and this is especially true in our established European markets, where we have continued to grow regional and specialised 'inclusive tour' client markets. Collectively these developments have made a significant contribution to the overall result. 

Private Jet travel had experienced four years of exponential growth. In the year since the extreme turmoil in the financial markets began, our Private Jet division (PJ) has seen its business levels drop sharply and the Company has moved quickly to resize the division for today's reduced trading levels. Overall PJ sales are down 21% to £46.4m. The brokerage and support teams are already structured with lean overheads, and reducing costs has been relatively straight-forward. By contrast, our PJ operating company bears the high fixed costs of employing crews, engineers, sales, operations, and support teams geared for high levels of activity to produce quality profits at the margin. However, in extreme circumstances, when both revenue and traffic levels fall by over 25%, it is not possible to remain profitable. Faced with a divisional loss of over £2.5m, we reduced costs and staffing accordingly. We do not expect to return to operational profitability here until we can sustain a material improvement in both volumes and yields; we will continue to monitor the business trends closely.

Our third trading division works in the Freight sector. The major world air cargo carriers have suffered a dreadful year, resulting in excess capacity and very low airfreight rates. Both these market trends make trading much harder for a team selling ad hoc freight charter flights. Despite that, we have steadied the fall in business to 19% and more impressively increased profitability by 60% in a highly competitive environment by improving both efficiency and effectiveness.

Capital Investments

In 2007 we announced plans to construct new hangar facilities to create new revenue streams as part of our long term expansion plans for our PJ operating company. At the half year end, we announced the suspension of the capital spend on the proposed hangar project, and this September, given the continuation of weak trading conditions, the Group secured a release from the ground lease and obligation to build.

Exceptional items and impairments

The company has incurred £0.44m of one-off costs in redundancies, and has written off £0.54m in developmental spend on the hangar project, in the financial year under review. The Board has also decided to take a £2.1m impairment on the goodwill valuation of the PJ operating company, acquired in 2006. 

Dividends

Shareholders will recall that last year, before the height of the global economic slowdown, the Board decided to make a step change adjustment to the core dividend, rebasing it up 50%. Despite the uncertainty that now prevails in our market, the Board is recommending that the final dividend be held at 22.6p (2008: 22.6p); given that the interim dividend was increased by 10%, the total annual dividend would increase by 2%.

The Board

We are delighted that Charles 'Chuck' Pollard has joined the Board. His knowledge and experience of the airline industry especially in the USA will be invaluable to the Company. I am also pleased to welcome Justin Barber, promoted to the main board and bringing 20 years of private jet trading experience to us. In a difficult trading environment the high quality of all our people is of paramount importance. I would like to thank everyone for their commitment and outstanding hard work in the year. It is also essential to have clear direction and I would congratulate the senior executive team under David Savile's leadership for guiding the business through these difficult times when many tough decisions have needed to be taken. 

Outlook

Air Partner occupies a prime position in the global charter market; it is a robust and profitable business, with a strong and diverse client base, free from debt, and an enviable cash position. While short term uncertainty exists today, the Board remains confident that the driving forces of globalisation, economic growth and deterioration in the commercial airline services will support a sector recovery in the medium term. 

Current trading has stabilised at the weaker levels experienced in the second half of the year. Forward orders, which historically represent a tiny part of the final result, remain poor and offer no real evidence of the expected future performance; we are therefore planning for a current year of consolidation. Air Partner has a proven long term strategy and although short term movements in the cycle affect profitability, we believe that long term prospects remain strong.

Aubrey Adams

Chairman

14 October 2009

Chief Executive's Review

On the back of four consecutive years of rising sales, five years of rising profits, and 13 years of rising dividends, 2009 breaks all the trends and the worst recession in living memory has set the Group, and the sector, back from where we expected to be. However, despite the economic backdrop, Air Partner remains profitable, and our services are still in demand. Today we announce sales of £194.3m (down 23%) and underlying profit down 57% to £4.0m (prior to impairment and exceptionals). Despite this, the proposed final dividend is maintained at the 2008 level, after a 50% increase this time last year.

We are encouraged by the fact that our overall Group strategy has remained valid through such conditions and, supported by the significant cost adjustments that we have made in the business during the second half, we believe the current strategy will continue to serve the Group well as the global economy recovers. 

The Group's core broking business has held up remarkably well given the harsh realities of today's economy, with underlying broking profit at £6.5m (2008: £8.5m) on broking sales of £187m (2008: £239m). However this result was offset by a £2.6m loss in the PJ operating company, Air Partner Private Jets (APPJ), and a goodwill impairment of £2.1m on that asset. 

APPJ has proven vulnerable in a severe downturn, due to the relatively high fixed costs of hangar facilities, aircrew, sales, operations, maintenance, and administration personnel that have to be covered before its flight activities produce revenue. In the year reported, as detailed in the June IMS, the optimism for an improved 2009 summer season did not materialise. This resulted in weaker demand and weaker pricing overlaid with high fixed costs (geared for the height of the record 2008 market) combining to create the loss. Accordingly management has taken action to significantly reduce costs and resize the business for today's smaller market, and remains highly focused on this business unit.

Looking wider across the aviation sector, around 35 carriers have already ceased trading during our reporting period. Further failures are inevitable in what will undoubtedly be a harsh winter for weak airlines and private jet companies alike. Many competitors are in disarray. This will be an ongoing theme in the short to medium term as the market re-aligns to a new level, and we discover which companies have sustainable models at today's new business levels. The beneficiaries will be those companies with a strong parent, good reserves, and lean overheads, of which Air Partner is a good example. 

The pressure of adverse pricing conditions from distressed sellers has dominated the weaker end of the market. Initially, clients were very attracted to such pricing, especially where contracts were offered below positive contribution rates. Air Partner took an early stance against such deals, given that they carry a heavy trading risk that the carrier may not survive long enough to perform the contract. More recently some clients have begun to understand the consequences of working with less robust companies, and have returned to more traditional buying habits. So it is that we have seen the loss of a significant amount of our marginal business, but the retention of quality business, where clients still recognise our ability to deliver successful flights even under the toughest of conditions. Consequently whilst broking sales are down 22%, the average broking margin rose to 11.8% (2008: 10.5%). 

Commercial Jets (CJ)

The largest of our three main divisions, CJ has remained the powerhouse of the Group with a stable and efficient team who continue to deliver logistical excellence, chartering airliners for every reason imaginable. Today it represents 64% (2008: 66%) of our Group sales, and generated £3.5m of operating profit (before exceptionals). Primary clients stem from the Government sector across a variety of nations, providing airlifts for many different Departments of State; this business was down 29%. Corporate business was more seriously affected, being 44% down across the year. This is not expected to improve during the current H1.

Separately, we have a strong collection of small tour operator clients who run regional programmes. These contracts are individually too small to interest the major players, enabling us to service them at a concierge level. Pleasingly this year we have fully maintained activity levels in this area. 

A key divisional trend in the year has been the stability of the margin across the division, which is up 100 basis points to 10.5%, consistent with the loss of marginal business explained earlier. In concentrating on the best of client care for our most loyal clients, we have lower sales figures for the short term, but our profitability has been upheld, and our core values of Quality, Dependability, Diversity and Longevity are uncompromised. 

Private Jets (PJ)

Our PJ business comprises two business units: broking (including adhoc charter sales and JetCard) and the private jet operating company, APPJ. We have suffered poor trading conditions across the whole of the PJ market which went into pricing freefall in November 2008, before stabilising in early 2009. As our PJ team are very aware, there were three main causes of the dramatic change of circumstances: the global recession, the subsequent global reaction against private aviation, and the fight for survival amongst some of our immediate competition leading to today's adverse pricing conditions. Across the sector, anecdotal evidence suggests that the drop in business was in many cases around 40-45%. 

- Private Jet Broking

By comparison to the market, Air Partner's adhoc charter sales are down just 15%, and JetCard usage is down 21%. JetCard remains a popular product and the number of card members actually showed a small net gain in the year, with margins holding steady. These parameters at least demonstrate an above-industry-normal performance. The team is recognised for delivering an outstanding service that continues to accrue long term loyalty from its many clients. 

Our adhoc charter and JetCard offerings have proven to be viable products in this falling market, the victims being the 'fractional ownership' programme operators; August 2009 was a particularly worrying month for the fractional industry, with the largest programme operator reporting an 81% drop in fractional sales, the founding father of fractional ownership exiting the industry, and a new and well-financed European fractional scheme entering administration. On both sides of the Atlantic clients appear to have become more adverse to fractional offerings, providing encouragement for well funded and credible JetCard schemes; we expect to benefit from a switch of allegiance over the next 18 months.

- Private Jet Operating Company

In October 2006 we acquired the PJ operating company to broaden the range of PJ products that we offered our clients, and so optimise the brokerage position we held in the European market. APPJ became a key element to our PJ strategy, working exceptionally well in the subsequent boom years of 2007 and 2008. In that period it generated both divisional profits, as well as a highly positive halo effect of earnings into our PJ broking team, right through until the Lehman collapse. Thereafter it was abruptly faced with 35% less demand, even with hourly rates reduced by 25%. As a result APPJ became loss-making, with excess commitments to aircraft owners, and an inability to sell above cost. Consequently, we took decisive action and reduced the annual cost of the business by £1m. We enter the new financial year with APPJ budgeted to reduce losses in this year, with overheads set at the minimum level commensurate with maintaining the highest operating standards. It is important to emphasise that the strategy of having in-house control of private jet capacity continues to offer important potential benefits to the core business earnings. 

Today the recession remains our primary cause for concern, and it is re-assuring to see that in recent months the stigma surrounding the use of a private jet has reduced, and industry evidence suggests that the decline in PJ use has halted. However, there are few signs that point to rising demand, and yields will remain suppressed for much longer.

While opportunities for consolidation in the PJ sector may arise, we will avoid diluting our inherent strength to escape short term pain. The fact is that the boom in this sector over the last four years was driven by three external factors: globalisation, significant wealth creation and the deterioration of commercial airline service levels. Looking beyond the current woes to the medium term, we believe these factors remain valid and, when they return, will continue to drive demand for private aviation. Our focus is to correctly position our product offerings for the upturn in the market.

Freight 

Given the very poor conditions in the world air cargo industry, our Freight team can be pleased with a strong result this year. Whilst our sales followed the global trend downwards, much of the 19% decline stemmed from the completion of the UK's role in Iraq. In contrast, our divisional profitability rose by over 60%, showing a big improvement in the professional buying skills of the team, and a higher margin being available on non-military contracts. The performance of our freight team is a good example of our diversification strategy yielding benefits to the Group.

The Global Network 

The 23% drop in Group sales breaks down regionally as follows: UK down 28%, Europe 8% down, North America down 37%, and the rest of the world, 11% down. This is consistent with the timeline of the recession starting in the USA and spreading eastwards. During the period we closed the Spanish and Japanese offices, and mothballed the New York sales outlet, reducing our office network to 20. Despite these poor trading conditions we have maintained efforts to take our business into new areas, where significant capital spend or overheads are not required. We have added a Moscow sales presence this year and been pleased with the new PJ clients added to our portfolio. We continue to examine developing markets opportunities. 

Other Divisions

Our Emergency Planning Division has remained profitable this year, as has the in-house travel agency, Air Partner Travel.  Additionally, in the spring we launched a small fuel-broking division (Air Partner Fuel) which, in line with our charter-broking model, is a service offering better value to clients than their existing suppliers. The service is targeted at our smaller airline suppliers operating to airports outside their regular destinations, where we are able to negotiate more favourable fuel pricing than smaller carriers can directly. Sales are only taken on the back of firm orders, so we are not exposed to a risk in our trading position. Better still, we target the suppliers flying our broking contracts, as the first point of leverage. The division became profitable from its 3rd month.

Our leasing contract of a Saab 340 commuterliner to an Australian regional airline has suffered with the lessee ceasing operations, despite Government grants for the essential air services that it provided for the Outback communities. We have therefore recovered the aircraft, and it is being repositioned to the USA where we are currently negotiating a new contract. With no earnings since March, the division ended the year with a small loss.

Exceptionals

The overall 2009 result has been impacted significantly by the effect of the exceptional items that reduced the Group PBT. On taking the decision not to proceed with our PJ hangar project, the Board has chosen to write off the £0.54m of investment made in bringing the project up to contract stage. Within the headline figures there is a further £0.44m of restructuring and redundancy costs this year. As previously stated, the Board has also decided to take £2.1m of impairment on the goodwill value of its investment in APPJ this year.

Outlook

The recession remains the dominant factor limiting the growth of our business, and there are too many external variable factors that affect our short term profitability to provide accurate forecasting. Current trading continues to be more stable, but at the weaker levels that dominated H2 2008. While a strong Q1 2008 meant that the Group was late into the recession, without a strong comparable Q1 2009 we anticipate the Group will emerge later from the downturn. The past year has not been easy, but we have made significant progress in resizing the business to suit today's trading conditions. The Board remains confident in the future potential of the Group and a return to growth, once the economic climate improves. The Directors believe that the Company has all the right component parts to achieve significant future success, and Air Partner remains well positioned within a fragmented market.

Despite the challenges presented over the past year, Air Partner has remained profitable, debt free and highly focused on providing clients with an unrivalled service. Throughout the period our loyal team has worked tirelessly to maintain the integrity and professionalism of the bespoke 24 hour service we provide, and it is their creativity and persistence that reassures us that together we will emerge stronger. I want to stress my personal thanks and those of my fellow board directors to the global Air Partner team for their unstinting efforts, which are very much appreciated.

David Savile

Chief Executive

14 October 2009

Financial information

The financial information in this preliminary announcement which comprises the consolidated income statement, consolidated statement of recognised income and expense, consolidated balance sheet, consolidated cash-flow statement, summary accounting policies and related notes does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006.

The statutory accounts for the year ended 31 July 2008 have been filed with the Registrar of Companies. The auditors have reported on those accounts and on the statutory accounts for the year ended 31 July 2009, which will be filed with the Registrar of Companies following the Annual General Meeting. Both the audit reports were unqualified and did not contain any statement under sections 237 or 498 of the Companies Act 1985 and 2006 respectively.

Air Partner PLC

("the Group" or "the Company")

Preliminary Announcement of audited results for the year ended 31 July 2009

Consolidated income statement

		Pre-exceptional items	Exceptional items	Year ended	Year ended
Continuing operations	Note	2009 £'000	2009 £'000	2009 £'000	2008 £'000
Revenue	2	194,298	-	194,298	251,315
Cost of sales		(169,402)	-	(169,402)	(221,410)
Gross profit		24,896	-	24,896	29,905
Administrative expenses		(21,394)	(980)	(22,374)	(21,444)
Impairment of goodwill		-	(2,106)	(2,106)	-
Operating profit		3,502	(3,086)	416	8,461
Finance income	3	496	-	496	784
Finance costs	3	(11)	-	(11)	(2)
Profit before tax		3,987	(3,086)	901	9,243
Comprising:
Profit before tax and impairment				3,007	9,243
Impairment of goodwill				(2,106)	-
Profit before tax				901	9,243
Taxation	4	(939)	-	(939)	(2,892)
(Loss)/profit for the period		3,048	(3,086)	(38)	6,351
Attributable to:
Equity holders of the parent				(38)	6,351
Earnings per share:
Basic 6		29.9p	(30.3)p	(0.4)p	62.6p
Diluted 6		29.8p	(30.2)p	(0.4)p	61.7p

Air Partner PLC

("the Group" or "the Company")

Preliminary Announcement of audited results for the year ended 31 July 2009

Consolidated statement of recognised income and expense

2009 £'000		2008  £'000
Exchange differences on translation of foreign operations	843	645
Net gain recognised directly in equity	843	645
(Loss)/profit for the period	(38)	6,351
Total recognised income and expense for the period	805	6,996
Attributable to:
Equity holders of the parent company	805	6,996
805		6,996

Air Partner PLC

("the Group" or "the Company")

Preliminary Announcement of audited results for the year ended 31 July 2009

Consolidated balance sheet

Assets	Note	2009 £'000	2008 £'000
Non-current assets
Goodwill		2,268	4,374
Other intangible assets		29	204
Property, plant and equipment		2,238	1,852
Deferred tax assets		487	292
5,022			6,722
Current assets
Inventories		424	434
Trade and other receivables		26,507	30,388
Current tax assets		359	-
Cash and cash equivalents		16,137	20,756
43,427			51,578
Total assets		48,449	58,300
Current liabilities
Trade and other payables		(10,033)	(10,040)
Financial liabilities		(3)	(217)
Current tax liabilities		(537)	(1,422)
Other liabilities		(22,571)	(29,503)
(33,144)			(41,182)
Net current assets		10,283	10,396
Non-current liabilities
Deferred tax liabilities		(18)	(36)
(18)			(36)
Total liabilities		(33,162)	(41,218)
Net assets		15,287	17,082
Equity
Share capital	7	512	509
Share premium account	7	4,440	4,264
Translation reserve	7	1,199	356
Share option reserve	7	896	591
Retained earnings	7	8,240	11,362
Equity attributable to equity holders of the parent		15,287	17,082
Total equity	7	15,287	17,082

Air Partner PLC

("the Group" or "the Company")

Preliminary Announcement of audited results for the year ended 31 July 2009

Consolidated cash flow statement

Note		2009 £'000	2008  £'000
Net cash (outflow)/inflow from operating activities	8	(1,366)	9,440
Investing activities
Interest received		496	784
Purchase of minority interest		-	(935)
Purchases of property, plant and equipment		(1,289)	(697)
Net cash used in investing activities		(793)	(848)
Financing activities
Dividends paid		(3,132)	(8,221)
Proceeds on issue of shares		179	799
Net cash used in financing activities		(2,953)	(7,422)
Net (decrease)/increase in cash and cash equivalents		(5,112)	1,170
Opening cash and cash equivalents		20,756	19,479
Effect of foreign exchange rate changes		493	107
Closing cash and cash equivalents		16,137	20,756

1 AUTHORISATION OF FINANCIAL STATEMENTS AND STATEMENT OF COMPLIANCE WITH IFRSs

The accounts have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted for use in the European Union in accordance with EU law (IAS regulation EC1606/2002) and those parts of the Companies Act 1985 and 2006 applicable to companies reporting under IFRS.

The accounts are prepared on the historical cost basis, except for the revaluation of certain financial instruments which are stated at fair value. These accounts have been prepared on a going concern basis.

The accounting policies adopted are consistent with those of the previous financial period.

This preliminary statement was approved by a duly appointed and authorised committee of the Board of Directors on 14 October 2009. The financial information contained in this statement does not constitute statutory accounts as defined in sections 434 of the Companies Act 2006. The financial information in this preliminary statement has, however, has been extracted from statutory accounts for the year ended 31 July 2009 on which an unqualified audit report has been issued.  

The 2008 statutory accounts have been filed with the Registrar of Companies. The 2009 statutory accounts will be sent to shareholders in November 2009 and will be filed with the Registrar of Companies following their adoption at the forthcoming Annual General Meeting.

2 SEGMENTAL ANALYSIS 

	2009  £'000	2008 £'000
Geographical segment - revenue
United Kingdom	108,713	152,000
Europe	70,283	76,589
United States of America	12,057	19,088
Rest of the World	3,245	3,638
	194,298	251,315
Geographical segment - operating profit before exceptionals
United Kingdom	3,198	5,934
Europe	959	1,626
United States of America	(192)	882
Rest of the World	(463)	19
	3,502	8,461
Geographical segment - operating profit after exceptionals
United Kingdom	387	5,934
Europe	684	1,626
United States of America	(192)	882
Rest of the World	(463)	19
	416	8,461
Finance income	496	784
Finance costs	(11)	(2)
Profit before tax	901	9,243
Income tax expense	(939)	(2,892)
(Loss)/profit for the period	(38)	6,351
Business segment - revenue
Private Jets	46,373	58,644
Commercial Jets	123,698	165,415
Freight	20,039	24,687
Other	4,188	2,569
	194,298	251,315
Business segment - operating (loss)/profit
Private Jets	(950)	3,178
Commercial Jets	3,454	4,418
Freight	890	558
Other	108	307
Exceptional items	(3,086)	-
	416	8,461
Finance income	496	784
Finance costs	(11)	(2)
Profit before tax	901	9,243
Income tax expense	(939)	(2,892)
(Loss)/profit for the period	(38)	6,351

3 Finance income and costs 

Finance income	2009 £'000	2008 £'000
Interest on bank deposits	445	771
Interest on loans to related parties	51	13
	496	784

Finance costs	2009 £'000	2008 £'000
Interest on bank overdrafts	11	2

4 Tax

	2009 £'000	2008 £'000
Current income tax:
UK corporation tax	743	1,803
Foreign tax	409	1,264
Current income tax charge	1,152	3,067
Deferred tax	(213)	(175)
939		2,892

5 Dividends 

2009 £'000		2008 £'000
Amounts recognised as distributions to equity holders in the period
Special dividend for year ended 31 July 2007 of 60.0 pence per share	-	6,111
Final dividend for year ended 31 July 2008 of 22.6 pence (2007: 13.3 pence) per share	2,306	1,356
Interim dividend for year ended 31 July 2009 of 8.1 pence (2008: 7.4 pence) per share	826	754
3,132		8,221
Proposed final dividend for the year ended 31 July 2009 of 22.6 pence (2008: 22.6 pence per share)	2,315	2,303

An interim dividend of 8.1 pence (2008: 7.4 pence) per share was paid on 15 May 2009. Subject to shareholders' approval, the directors recommend the payment of a final dividend of 22.6 pence (2008: 22.6 pence) per share that will be paid on 18 December 2009 to shareholders on the register at 13 November 2009; this makes a total dividend for the year of 30.7 pence (2008: 30.0 pence) per share. The shares will be marked ex-dividend on 11 November 2009.

The proposed final dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements.

6 Earnings per share 

The calculation of the basic and diluted earnings per share is based on the following data:

2009 £'000		2008 £'000
Earnings
Earnings for the purposes of basic earnings per share being net profit attributable to equity holders of the parent	(38)	6,351
Earnings for the purposes of diluted earnings per share	(38)	6,351
Number of shares
Weighted average number of ordinary shares for the purposes of basic earnings per share	10,200,067	10,138,500
Effect of dilutive potential ordinary shares: share options	43,080	157,769
Weighted average number of ordinary shares for the purposes of diluted earnings per share	10,243,147	10,296,269

7 Statement of changes in equity

Share capital £'000		Share premium account £'000	Share option reserve £'000	Translation reserve £'000	Retained earnings £'000	Total equity £'000
Opening equity as at 1 August 2008	509	4,264	591	356	11,362	17,082
Exchange differences on translation of foreign operations	-	-	-	843	-	843
Net expense recognised directly in equity	-	-	-	843	-	843
Share option movement for period	-	-	353	-	-	353
Loss for the period	-	-	-	-	(38)	(38)
Total recognised income and expense for the period	-	-	353	-	(38)	315
Dividends	-	-	-	-	(3,132)	(3,132)
Issue of shares under share option scheme	3	176	(48)	-	48	179
Closing equity as at 31 July 2009	512	4,440	896	1,199	8,240	15,287

 

8 Net cash (outflow)/inflow from operating activities

2009 £'000		2008 £'000
Operating profit for the period	416	8,461
Adjustments for:
Depreciation and amortisation	566	565
Costs written off (hangar project)	536	-
Impairment of goodwill	2,106	-
Movement on financial liability	(214)	47
Share option cost for period	353	346
Operating cash flows before movements in working capital	3,763	9,419
Decrease/(increase) in receivables	3,881	(3,713)
Decrease/(increase) in inventories	10	(39)
(Decrease)/increase in payables	(6,613)	6,584
Cash generated from operations	1,041	12,251
Income taxes paid	(2,396)	(2,809)
Interest paid	(11)	(2)
(1,366)		9,440

ENDFR GUGGWUUPBGRW

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