11th Oct 2005 07:01
Air Partner PLC11 October 2005 Air Partner PLC ("the Group" or "the Company") Preliminary Results for the 12 months ended 31st July 2005 Air Partner is the world's leading air charter broker. The Group providesaircraft charter to industry, commerce & governments worldwide. Highlights: • Sales up 23% £123.6m(£100.6m) • Operating profit up 23% £4.3m (£3.5m) • Pre-tax profits up 29% £4.8m (£3.7m) • Diluted EPS up 30% 32.2p (24.7p) • Special dividend (proposed due to exceptional year) 20p per share • Final dividend up 10% 11.0p (10.0p) • Full year dividend up 10% 16.5p (15p) • 11th consecutive year of a 10% dividend increase • Exceptional year driven by one-off, non-repeating contract wins in H1 • Underlying business performs in line with management expectations • Three new office openings - continue stated global expansion plans • Sentient Alliance supporting Jet Membership Programme well • Continued investment in business and team to support client service • Current trading reflects a normalisation of business levels David Savile, Chief Executive commented: "These results are the Group's bestever - reflecting the one-off contract wins in the first half of the year.Consequently, I am pleased to announce the payment of a Special dividend toshareholders. The 2005 financial year was exceptional, and in the current yearwe have experienced a normalisation of business patterns. The Charter market isa growing sector and as industry, commerce & governments continue to takeadvantage of the sector's services, so Air Partner continues to invest in itsability to provide global excellence to its clients. I am confident that theteam's hard work in the year under review has further strengthened Air Partner'sability to continue to perform and grow within the charter market." 11th October 2005 ENQUIRIES:Air Partner T: 01293 844 805David Savile, Chief ExecutiveSteph White, Finance Director TCA T: 0207 670 7400Tom Allison T: 0778 999 8020Amanda Palmer Editor Note: please ensure "Air Partner" is written in its correct singularform, not in the plural. Air Partner PLC ("the Group" or "the Company") Preliminary Results for the 12 months ended 31st July 2005 Chairman's Statement I am delighted to report that your Company has enjoyed an exceptionally goodyear, with profits for the year ended 31 July 2005 up by 29% to £4.771m (2004:£3.709m), on a total Group sales of £123.6m (2004: £100.6m), representing a 23%improvement year on year. Diluted earnings per share increased by 30% to 32.2p(2004: 24.7p) and Group cash increased by 55% to £15.4 million (2004: £9.9million). Due to the Company's cash position reflecting an unusually good year, the boardof directors has recommended the payment of a final dividend of 11p (2004: 10p)and a special dividend of 20p making the total for the year 36.5p (2004: 15p). In today's fast-moving world, Air Partner is experiencing an increasingacceptance of the use of chartered aircraft as business tools that offerhassle-free travel for time-precious clients (you don't just transport people).Whether it is an airliner to transport a company's sales force, a sports team,an orchestra, a private jet for a businessman, or some essential freight,charter has become a more regular solution for businesses and governments thatplace a premium on time. Across the Group, which now comprises 21 offices, I am pleased to report thatAir Partner has achieved sales growth in almost every country. Group'sperformances in the US, UK and Germany, where the teams have achievedsubstantial growth in both sales and earnings, were particularly note worthy. In line with our strategy to grow the Company geographically, Air Partner hasopened offices in Japan, Italy and Spain in the period under review - all ofwhich are trading in line with expectations and the group continues to seek andbuild alliances that add to the Group's strategic expansion. Last year Air Partner had an unusually strong start to the financial year, withforward bookings significantly ahead of expectations. Accordingly, today'sforward bookings are currently below those of last year, but 24% better than theprior year, and more in line with Air Partner's long term trends. Most importantly, my thanks go to the great team of people at Air Partner whohave worked hard and so effectively to produce these outstanding results. Tony MackChairman Air Partner PLC ("the Group" or "the Company") Preliminary Results for the 12 months ended 31st July 2005 The Chief Executive's Review The Company has delivered another strong performance in the year ended 31 July2005. For the second time in succession, pre-tax profit is up by almost 30%year on year and the Group has made good progress in almost all divisions of thebusiness. It is pleasing to report that the Group's strategy continues todeliver results for both its clients and shareholders. Our business has been helped by a growing market and a wider acceptance offlying as a preferred mode of transportation. In a shrinking world, there isincreasing pressure for faster and easier travel, factors that 'charter' isdesigned to meet. Hence, both our airliner and executive jet divisions haveseen significant sales growth this year. The year was dominated by the Group's exceptionally strong first six months.This period was buoyed by five 'super-exceptional' contracts, won early in thefirst quarter. Such contracts are rare in our sector and tend to be short-livedand non-repeating; however, they gave us the benefit of running with unusuallygood visibility of earnings, and provided the whole team with additionalmotivation and encouragement. Pleasingly, the underlying business continued togrow in line with management's internal expectations. Group sales grew by 23%year on year and the Company has continued to perform well in the Governmentsector which accounted for 40% of all sales. Air Partner has continued to invest in its global network and today the Grouphas 21 offices, covering the UK, Europe, Middle East, parts of the Far East andthe Eastern half of North America - each office is staffed by the best of localaviation talent. This year new offices were opened in Italy, Japan, and Spain,all trading in line with management's expectations. Organic overseas growth isbest delivered by combining Air Partner's skills and experience (developed overits 45 years of trading in the UK) with the expertise of the local Air Partnerteam who understand the regional business nuances and local aircraft charterindustry. A decade on from the start of the office roll-out plan, we have builtthe backbone of the network. Much remains to be done, and shareholders shouldexpect a similar number of regional and national offices to be added during thenext decade, given the right trading conditions. The Group continues to invest time and resources in improving its provision ofsupport services to the regional offices. Our proprietary IT system has enabledus to maintain the highest levels of service, whilst dealing with anever-increasing volume of work and client requirements. Our country managers arenow able to draw on centralised IT, legal, finance, accounting, marketing,trading and training functions; this allows their teams to concentrate moreeffectively on local sales. Whilst the process requires structured training,strong management and much perseverance, it has already produced sufficientreturn on investment to validate the strategy. The number of front-line traders increased 10% in the year, without unwanteddepartures. Overheads were maintained in line with growth levels. On thelogistical side, our continuing investment in people, sales training and ITsupport has enabled us to maintain the highest levels of service with theincreased volumes, ensuring all clients received a professional and positiveexperience every time. Sales in the UK grew by over 20%, which is encouraging considering it is theGroup's largest and most mature market, especially considering the supportfunctions now being supplied from the centre. As the powerhouse behind thegeographic growth, the UK team has won significant new business in areas wherefuture offices can be created. Most notable this year is the business won in theFar East and Australasia, where our investment in both time and effort isbringing returns. The US offices increased sales by over 50%, a stunning performance from a teamcollectively motivated to win. The US business continues to offer excitingopportunities for the future, albeit in a very competitive market. The Group's network of German-speaking offices increased their sales by almost25% at a time when business confidence remains extremely weak; this achievementrewards the perseverance of a dedicated team. Our offices in Switzerland and the UAE have also delivered double-digitpercentage growth from relatively small local markets. The UAE team has becomethe industry specialists for support flights into Iraq and Afghanistan; theseessential skills are much in demand in the area. No business can run smoothly all the time, and a list of our achievements has tobe balanced against the problems that remain. The French team has workedextremely tenaciously to hold sales constant in a difficult national economicenvironment. 'Professionals with a Passion' is a descriptor we use to sum up the team, thecore assets of our company. We take time and great care to recruit well, trainto our standards, and to enhance personal skills to the point of best practice.The global team now comprises 130 people who meet these standards. At main Boardlevel, in December we were pleased to welcome Richard Everitt as a newnon-executive director to replace the Hon. Rowland Cobbold who retired at fullterm. Richard joins us with a wealth of business experience and acumen, fromboth aviation and wider transportation businesses, and is an important additionto the Board. Special dividend The Company operates in the unpredictable world of the ad hoc charter market,with typical contract periods measured in hours and days. Although this providesus with limited visibility of earnings, we have built an enviable sales growthtrack record over our 15 years on the Market. By contrast, the Company hascontinually rewarded shareholders with a very predictable and positive dividendpolicy. This is the 11th consecutive year that we have increased the coredividend by 10%. Further, given this exceptional year, the Board is proposing a20 pence special, bringing the total dividend paid since flotation to 235% ofthe 1989 float price. The special dividend, will be paid on 1st December 2005to shareholders on the register at 3rd November 2005. Operational Review Executive Jet Business Air Partner's core business remained strong and the business division grew by34%. To maintain momentum in a difficult market, the Group launched its JetMembership Programme - clients purchase a pre-paid card with entitlement to afixed number of flight hours, at a guaranteed rate on a range of business jets.The card has played an important role in our marketing campaign as it generatesboth direct and indirect sales. Later in the year the usability of the card was expanded through the signing ofan alliance with Sentient Jet (www.sentient.com). Sentient are one of theleading providers of jet cards in North America and, under the terms of thealliance, we have reciprocal rights to fly for each other's clients, with AirPartner being tasked with the delivery of all non-US-domestic route flying.Whilst the card and the alliance have yet to be materially significant (fixedpricing adds an element of buying risk and results in lower margins), we dooperate head-to-head against major competitors who run at high operating losslevels. The formation of alliances has been a key to our strategy since 2000 andwill remain important going forward. Commercial Airliner Charter Another strong performance, with 23% sales growth and an excellent spread ofbusiness across all sectors and territories, from the extremes of flying toBaghdad, Mazar-I-Sharif, and the Falkland Islands to the simple and frequentruns to Nice and Barcelona. In the corporate sector, charter remains thefavoured route to many group travel itineraries, whilst in the public sector weserve many of the world's Governments, providing a full range of charterservices for many different types of mission. It is gratifying to constantlyreceive praise for the team who are delivering service that is recognised byclients as outstanding; indeed it was one of our most regular and demanding ofusers who spontaneously referred to this team "doing the impossible as a matterof routine". There is an increasing trend now for airlines to be understaffed, and the Grouphas had to respond by increasing our logistical teams to provide more support onour supply side, a critical value-added component for the client. These teammembers, working on a 24 hour basis from our Operations Centre, have become thepower behind our customer service and greatly enhance our clients' perceptionsof us, and their loyalty to us. Freight Division This has been a year of consolidation for our freight team; in its first threeyears the growth of our business came from a small nucleus of existing users ofour passenger services. Having performed intensive and outstanding work forthese clients since 2002, little time has been available to properly structurethe unit to focus on development; this year we have started the process, and ourspecialist freight team are very much at the heart of our core services. Current Trading & Outlook 2005 was an exceptional year. Therefore, by comparison 2006 has startedrelatively slower, as business levels have normalised in line with management'sexpectations. Opportunities continue to be good, albeit with a preponderance ofsmaller contracts. The Group's geographic growth plans continue on track, with asmall outlet opened in San Francisco during August, and two more underdevelopment for later in the year. Air Partner operates in the £20 billion industry of ad hoc charter, within whichthe Group holds a market share of half of one percent. This is an emergingindustry, which is gaining increasing acceptance as a valuable business service.With this recognition comes increased business volume, and increasedcompetition. The Group has invested significant time and resource to maintainits first mover advantages and provides an exceptional service and reliabilityto its clients. It continues to pursue a three-dimensional growth strategy,focusing on geographic expansion, product diversity, and client acquisition, toprovide organic growth, focused on shareholder return and client service. As thedemand for charter grows, so too will the procurement possibilities available topotential customers, creating the opportunity for air charter brokers to furthergrow market share. Within this environment, the board of directors is confidentthat Air Partner is now better positioned to continue to increase its marketshare and at the same time provide clients with a first class and reliableservice. Nothing in this review should suggest, though, that business is easy orstraightforward. This increasingly competitive environment, with challengingexternal operational issues, makes life far from easy for our professional team.Despite this, my immediate experience of the team constantly amazes me andprovides confidence that we can continue to win, given a fair market. These past12 months have reinforced my view and I feel extremely proud of them. David SavileChief Executive Air Partner PLC ("the Group" or "the Company") Preliminary Results for the 12 months ended 31st July 2005 Consolidated profit and loss account 2005 2004 Notes £'000 £'000Turnover 1 123,585 100,597Cost of sales (109,199) (88,796)Gross profit 14,386 11,801Administrative expenses (10,055) (8,297)Operating profit 4,331 3,504Interest receivable 468 239Interest payable (28) (34)Profit on ordinary activities before taxation 4,771 3,709Taxation (1,546) (1,174)Profit on ordinary activities after taxation 3,225 2,535Minority equity interests (83) (211)Profit attributable to members of Air Partner PLC 3,142 2,324Dividends 2 (3,543) (1,396)Retained (loss) / profit for the financial year and transferred to (401) 928reservesEarnings per share- basic 3 33.1p 25.0p- diluted 3 32.2p 24.7p Consolidated statement of total recognised gains and losses 2005 2004 £'000 £'000Profit for the financial year 3,142 2,324Exchange adjustment on retranslation of net assets of subsidiary undertakings 135 (79)Total recognised gains and losses relating to the year 3,277 2,245 Air Partner PLC ("the Group" or "the Company") Preliminary Results for the 12 months ended 31st July 2005 Consolidated balance sheet as at 31 July 2005 2005 2004 Notes £'000 £'000Fixed assetsTangible fixed assets 2,373 2,546 2,373 2,546Current assetsDebtors: amounts falling due after more than one year 135 132Debtors: amounts falling due within one year 11,691 13,716Cash at bank and in hand 15,437 9,983 27,263 23,831Creditors: amounts falling due within one year (19,150) (16,575)Net current assets 8,113 7,256Total assets less current liabilities 10,486 9,802 Creditors: amounts falling due after more than one year (111) (427)Provision for liabilities and charges (134) (197)Net assets 10,241 9,178 Capital and reservesCalled up share capital 483 466Share premium account 2,581 1,281Profit and loss account 7,002 7,268Equity shareholders' funds 5 10,066 9,015Minority interests - equity 175 163 10,241 9,178 Air Partner PLC ("the Group" or "the Company") Preliminary Results for the 12 months ended 31st July 2005 Consolidated cash flow statement for the year ended 31 July 2005 2005 2004 Notes £'000 £'000Net cash inflow from operating activities 6 7,615 4,189Returns on investments and servicing of finance 239 (8)Taxation (1,650) (1,262)Capital expenditure (293) (149)Acquisitions and disposals (69) -Equity dividends paid (1,401) (1,326)Cash inflow before use of liquid resources and financing 4,441 1,444Management of liquid resources (6,470) (1,900)Financing 994 (319)(Decrease) in cash in the year (1,035) (775) Reconciliation of net cash flow to movement in net funds 2005 2004 Notes £'000 £'000(Decrease) in cash in the year (1,035) (775)Cash outflow from short-term deposits 6,470 1,900Cash outflow from debt and financing 323 347Exchange adjustments 4 13Movement in net funds in the year 5,762 1,485Net funds at 1 August 2004 9,332 7,847Net funds at 31 July 2005 15,094 9,332 Air Partner PLC ("the Group" or "the Company") Preliminary Results for the 12 months ended 31st July 2005 Notes to the financial statements 1 Segmental reporting Profit before tax and Net assets Turnover interest 2005 2004 2005 2004 2005 2004Classes of business £'000 £'000 £'000 £'000 £'000 £'000Air Charter 4,294 3,486 10,076 9,049 122,305 99,538Travel agency 30 8 87 59 1,266 1,046Insurance 7 10 78 70 14 13 4,331 3,504 10,241 9,178 123,585 100,597 Turnover by destination Net assets (client residence) Turnover by source 2005 2004 2005 2004 2005 2004Geographical location £'000 £'000 £'000 £'000 £'000 £'000UK 6,464 6,532 34,112 36,642 63,687 52,773Rest of the World 3,777 2,646 89,473 63,955 59,898 47,824 10,241 9,178 123,585 100,597 123,585 100,597 2 Dividends 2005 2004 £'000 £'000Interim dividend of 5.5 pence (2004: 5 pence) per share - paid 547 465Final dividend of 11 pence (2004: 10 pence) per share - proposed 1,063 931Special dividend of 20 pence (2004: Nil) 1,933 - 3,543 1,396 The directors have declared a final dividend of 11 pence per share along with aspecial dividend of 20 pence payable on 1 December 2005 to shareholders on theregister at the close of business on 3 November 2005. Air Partner PLC ("the Group" or "the Company") Preliminary Results for the 12 months ended 31st July 2005 3 Earnings per share Basic earnings per share is calculated on the basis of profit for the year ended31 July 2005 of £3,142,000 (2004: £2,324,000) and 9,495,237 shares (2004:9,303,138) being the weighted average number of shares in issue for the year. The diluted earnings per share is calculated on the basis of profit for the yearended 31 July 2005 of £3,142,000 (2004: £2,324,000) and 9,745,522 shares (2004:9,421,037) calculated as follows: 2005 2004 Number NumberBasic weighted average number of shares 9,495,237 9,303,138Dilutive effect of:Employee share options 250,285 117,899 9,745,522 9,421,037 4 Basis of financial information The financial information presented in the announcement does not constitutestatutory accounts as defined by Section 240 of the Companies Act 1985. Thefinancial information for the year ended 31 July 2004 is derived from thestatutory accounts for that period, which have been delivered to the Registrarof Companies. The auditors have reported on those accounts; their report wasunqualified and did not contain statements under section 237(2) or (3) of theCompanies Act 1985. The auditor has not yet reported under s235 of theCompanies Act 1985 upon the statutory accounts for the year ended 31 July 2005which will be delivered to the Registrar of Companies following the Company'sAnnual General Meeting. The financial statements have been prepared on the basis of the accountingpolicies set out in the financial statements for the year ended 31 July 2004. 5 Reconciliation of movement in shareholders' funds 2005 2005 2004 2004 Group Company Group Company £'000 £'000 £'000 £'000Profit for the year 3,142 2,274 2,324 1,365Dividends (3,543) (3,543) (1,396) (1,396) (401) (1,269) 928 (31)Issue of shares under share option scheme 1,317 1,317 28 28Exchange adjustment 135 - (79) -Net addition to shareholders' funds 1,051 48 877 (3)Opening shareholders' funds 9,015 7,285 8,138 7,288Closing shareholders' funds 10,066 7,333 9,015 7,285 Air Partner PLC ("the Group" or "the Company") Preliminary Results for the 12 months ended 31st July 2005 6 Reconciliation of operating profit to net cash inflow from operatingactivities 2005 2004 £'000 £'000Operating profit 4,331 3,504Depreciation 510 589Exchange differences 193 -Loss on sale of fixed assets 2 1(Increase) in debtors 2,102 (962)Increase in creditors 477 1,057Net cash inflow from operating activities 7,615 4,189 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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