4th Apr 2007 07:02
Air Partner PLC04 April 2007 Air Partner PLC ("the Group" or "the Company") Results for the Six months ended 31 January 2007 Air Partner is a leading provider of private aviation services to industry,commerce, governments and private individuals worldwide. Air Partner holds aRoyal Warrant from HM Queen Elizabeth II. * Sales £90.3m up 60% * Operating profit £3.2m up 139% * Profit before tax £3.5m up 118% * Diluted EPS 23.0p up 115% * Interim dividend 6.7p up 10% * Cash £17.3m up 39% * Strong trading across the Group * Air Partner client base grew by 25% in period under review * Exceptional performance from core Government and Corporate sectors * Continued progress in high net worth individual (HNWI) and jet-for-leisure sector * Gold Air creating an extremely positive halo effect for Air Partner Private Jets * Forward orders up 29%; strong, but slower than October 2006 David Savile, Chief Executive commented: "Air Partner's traditional governmentand corporate sectors produced extremely strong performances and I am pleased tosay that the Group's jet-for-leisure and high net worth offerings are gainingmarket share. The Group's diversification strategy continues to pay dividendsand today the Group services a wider client base, across more countries, with abroader array of private aviation products than ever before." 4th April 2007 ENQUIRIES: T: 01293 844 805 Air PartnerDavid Savile, Chief Executive Temple Bar Advisory T: 0207 002 1080Tom Allison T: 0778 999 8020Alex Money Notes to Editors: Please ensure "Air Partner" is written in its correct singular form, not in theplural. The Group has 21 offices, in 12 countries including Europe, US, Middle East andAsia. Air Partner PLC ("the Group" or "the Company") Results for the Six months ended 31 January 2007 Chairman's Statement In the six months to 31 January 2007 Air Partner increased its client base by25% and produced very strong results across all of its business divisions. Thisperformance was assisted by four key drivers: the greater efficiency and scaleof Air Partner, further economic and cultural globalisation, the currentstrength of the global economy and the continuing deterioration of the mass airtravel experience. While it is anticipated that most of these drivers willremain in force into at least the medium term, it is important to note that theGroup remains exposed to the short lead times associated with private aviation,limiting the Group's ability to predict business cycles. In the period under review sales grew by 60% against the comparative period to£90.3 million (£56.3m), operating profit was up 139% to £3.2m, with profitbefore tax up 118% at £3.5 million (£1.6m) and basic earnings per share risingto 23.5p (11.0p), a 114% increase. Cash rose by 39% to £17.3 million (£12.4m).Accordingly, the Board of Directors is recommending an interim dividend of 6.7p(6.1p), representing a continuation of the 10% increase in the core dividendthat has been sustained since 1995. The dividend will be paid on the 18th May2007, to shareholders on the register on 18th April 2007. While this has beenan exceptionally good performance, it is worth noting that the comparativeperiod last year was quieter than previous first half performances. Air Partner's international team of 225 aviation experts, based in 21 officesacross four continents, has produced sales ahead of expectations, with the UKaccounting for 57% of sales, Europe 29%, the US 9% and the rest of the world 5%. In terms of product split, the Commercial Jets business grew 52%, the PrivateJets business grew 75% (47% on like-for-like pre-acquisition basis) and otheractivities grew by 85%. Today, more than ever before, the hub and spoke systememployed from the UK head office throughout the Group is helping to driveearnings as synergies and efficiencies are more easily realised. In additionthe latest office openings in Palma, Milan and San Francisco are all profitableand the Group continues to seek new office opening opportunities as they arise. Air Partner has continued to perform well in its traditional government andlarge corporate sectors, the largest part of its client base. This strongfoundation of blue chip work, underpinned by excellent client loyalty, hasallowed the Group to move into new and potentially faster growing segments ofprivate aviation. The launch of a new JetCard initiative in July 2006, combinedwith the acquisition of Gold Air in October 2006 are both prime examples of theGroup's ability to seek out new revenues in the emerging jet for leisure market.To date both initiatives are proving to be excellent assets creating a haloeffect that is attracting new high net worth individuals to place their aviationbusiness with the Group. The integration of Gold is proceeding according toplan. We have incurred a series of immaterial one-off costs as part of thisplan, but these are being offset by the positive effect that Gold has alreadybrought to the whole of our private jet business from new client introductionsand from cross selling opportunities. Mindful of the increasingly fragile nature of the global environment, the Grouplaunched its first carbon neutral scheme for JetCard in December 2006; moreoverthe Group is pleased to state its intention to be entirely carbon neutral by theend of 2008. In order to maximise the potential of the Group across its different clientsegments, Air Partner has re-structured and re-branded its business units intothree divisions: (1) Air Partner Commercial Jets (for airliner charter) (2) Air Partner Private Jets (including the former Gold Air) (3) Air Partner Freight Initial feedback on both the structure and branding has been positive. Operational Review Air Partner Commercial Jets The chartering and leasing of airliners, by governments and corporations The division, headed by Mark Briffa in London, has performed extremely well witha high level of repeat business from clients and significant new business winsin both the Government and Corporate markets. Sales are up an exceptional 52%with improved margins, but this growth rate is not expected to be sustainedgoing forward to the full year. An analysis of client behaviour suggests thereis simply an unusual front-loading of the financial year and the second half ofthe financial year will see performance closer to prior years. It should beremembered that the descriptor 'private aviation' extends to airliners, and theexceptional growth is partly due to the team's ability to significantly enhancethe appeal of a chartered airline solution, over the normal scheduled airlineexperience. Air Partner Private Jets This division deals with all private jet usage from government and corporatework to high net worth individuals The new division, headed by Justin Barber, includes the previous Air Partnerprivate jet business, the new JetCard division (www.thejetcard.co.uk) and GoldAir. The effect of the re-structuring, re-branding and new management reportinglines will better position Air Partner to provide governments, corporates andHNWI with a full and seamless range of private jet products from ad hoc charterthrough to JetCards and private jet sales, management and maintenance. Despite divisional sales in the period under review growing by 75% to £24million, there remains much work to be done before the division is fullyoptimised. Although Gold Air is already bringing tangible benefits to the Groupand the initial strategic aims of the acquisition are either complete or inprogress, it is anticipated that full integration will not be complete until theend of this calendar year. Additionally, the integration will incur someinitial one-off costs, although these are not expected to be material and afuller report will be made at the year end. Pleasingly, many of Gold Air'santicipated synergies are already proving to be better than expected; mostnotably in the form of the halo effect this 'new shop window' is having on theGroup's core business and I am pleased to announce that a new client-ownedChallenger 300 will join the charter fleet under a management contract fromJanuary 2008. JetCard sales are in line with expectations and, with the team now part of thelarger Air Partner Private Jets division, we are able to actively promoteownership alongside card membership. A good example of this was the completionof the sale of an $11 million private jet to a JetCard client, within six monthsof them joining the JetCard programme. The private jet phenomenon continues to grow, with jet manufacturer order booksfull and waiting lists open to 2011 on some models. Globalisation, rapid wealthcreation, security fears and airport congestion continue to drive passengersfrom commercial to private aviation companies. Other Divisions The Group now has a range of supplementary businesses with supporting productsto the two main divisions. The strong trading experienced in the core businesshas also been experienced across the remaining 10% of Group activity withFreight, Emergency Planning, and Travel being over 85% up on the comparativeperiod. Current trading and outlook Over the last five years the Group has continued to diversify revenues bygeography, product and client sector, in order to provide greater resilience toeconomic and industry downturns. However, recent trading conditions have beenextremely buoyant across all areas and this combined with an increased focus onefficiencies has produced exceptionally strong results. Our traditional limitedvisibility of the forward order book shows them to be 29% up on 2006 levels. Theperformance of the Group, however, is best understood and best judged over themedium term. I cannot overstate the work levels which have been sustained at peak levelscontinuously over the last 12 months by the whole global team to deliver suchoutstanding results, both last year and in this current first half year. Mysincere thanks go to this unique and special team. Tony Mack, Chairman4th April 2007 Air Partner PLC Unaudited consolidated income statement for the six months ended 31 January 2007 Half year to Half year to Year to 31 January 31 January 31 July 2007 2006 2006 (unaudited) (unaudited) (audited) Continuing operations Note £'000 £'000 £'000 Revenue 2 90,308 56,278 140,368 Cost of sales (76,064) (50,048) (124,819) Gross profit 14,244 6,230 15,549 Administrative expenses (11,041) (4,888) (10,948) Operating profit 3,203 1,342 4,601 Finance income 261 271 534 Finance costs - (6) (6) Profit before tax 3,464 1,607 5,129 Taxation 7 (1,093) (459) (1,537) Profit for the period 2,371 1,148 3,592 Attributable to: Equity holders of the parent 2,301 1,066 3,429 Minority interests 70 82 163 2,371 1,148 3,592 Earnings per share: Basic 4 23.5p 11.0p 35.5p Diluted 4 23.0p 10.7p 34.4p Air Partner PLC Unaudited consolidated statement of recognised income and expense for the six months ended 31 January 2007 Half year to Half year to Year to 31 January 31 January 31 July 2007 2006 2006 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Exchange differences on translation of foreign operations (123) (115) (271) Net (expense) recognised directly in equity (123) (115) (271) Profit for the period 2,371 1,148 3,592 Total recognised income and expense for the period 2,248 1,033 3,321 Attributable to: Equity holders of the parent 2,178 951 3,158 Minority interests 70 82 163 2,248 1,033 3,321 Air Partner PLC Unaudited consolidated balance sheet as at 31 January 2007 31 January 31 January 31 July 2007 2006 2006 (unaudited) (unaudited) (audited) Note £'000 £'000 £'000AssetsNon-current assets Intangible assets 3,877 - -Property, plant and equipment 1,463 2,238 425Deferred tax assets 372 340 315 5,712 2,578 740 Current assets Trade and other receivables 15,328 14,309 23,613Stock 457 - -Cash and cash equivalents 17,311 12,426 11,931 33,096 26,735 35,544 Non-current assets held for sale - - 1,582 Total assets 38,808 29,313 37,866 Current liabilities Trade and other payables (8,394) (7,490) (8,618)Current tax liabilities (856) (491) (796)Other creditors (14,289) (9,464) (15,129) (23,539) (17,445) (24,543) Net current assets 9,557 9,290 11,001 Non-current liabilities Trade and other payables - (113) (110)Deferred tax liability (266) (216) (76) (266) (329) (186)Total liabilities (23,805) (17,774) (24,729) Net assets 15,003 11,539 13,137 Air Partner PLC Unaudited consolidated balance sheet as at 31 January 2007 EquityShare capital 497 483 483Share premium account 3,350 2,581 2,581Hedging reserve 5 4 (28)Translation reserve (237) 42 (114)Share option reserve 396 398 496Retained earnings 10,746 7,772 9,545 Equity attributable to equity holders of the parent 5 14,757 11,280 12,963 Minority equity interest 246 259 174 Total equity 15,003 11,539 13,137 Air Partner PLC Unaudited consolidated cash flow statement for the six months ended 31 January 2007 Half year to Half year to Year to 31 January 31 January 31 July 2007 2006 2006 (unaudited) (unaudited) (audited) Note £'000 £'000 £'000 Net cash from operating activities 6 10,036 198 154 Investing activities Interest received 261 271 534Proceeds on disposal of property, plant and 1,611 22 32equipmentInvestments (5,094) - -Purchases of property, plant and equipment (771) (94) (208) Net cash from investing activities (3,993) 199 358 Financing activitiesDividends paid (1,370) (3,073) (3,586)Decrease in bank loans - (343) (343)Proceeds on issue of shares 782 - - Net cash used in financing activities (588) (3,416) (3,929) Net increase/(decrease) in cash and cash 5,455 (3,019) (3,417)equivalents Opening cash and cash equivalents 11,931 15,437 15,437Effect of foreign exchange rate changes (75) 8 (89) Closing cash and cash equivalents 17,311 12,426 11,931 Reconciliation of net cash flow to movement net funds for the six months ended 31 January 2007 Half year to Half year to Year to 31 January 31 January 31 July 2007 2006 2006 (unaudited) (unaudited) (audited) Note £'000 £'000 £'000 Increase/(decrease) in cash in the year 5,455 (3,019) (3,417)Cash outflow from movement in debt financing - 343 343Effect of foreign exchange rate changes (75) 8 (89) Movement in net funds during the period 5,380 (2,668) (3,163)Opening net funds 11,931 15,094 15,094 Closing net funds 8 17,311 12,426 11,931 Notes to the interim results 1 Interim statement Basis of preparation This interim statement of Air Partner plc (the 'Company'), which is abridged andunaudited, has been prepared in accordance with International FinancialReporting Standards expected to apply at 31 July 2007 and which were applied at31 July 2006. The same accounting policies and methods of computation are followed in theinterim financial statements as were followed in the most recent annualfinancial statements, and as such, these interims are prepared in accordancewith International Accounting Standard 34 'Interim Financial Reporting'. The financial information contained in this document does not constitutestatutory accounts as defined inSection 240 of the Companies Act 1985. The auditors have issued an unqualifiedopinion on the Group's statutory financial statements under InternationalFinancial Reporting Standards for the year ended 31 July 2006, which have beenfiled with the Registrarof Companies. Half year to Half year to Year to 31 January 31 January 31 July2 Segmental analysis 2007 2006 2006 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Geographical segment - revenue United Kingdom 51,803 27,564 66,427Europe 26,181 16,031 48,147United States of America 8,054 9,664 21,734Rest of the World 4,270 3,019 4,060 90,308 56,278 140,368 Geographical segment - result United Kingdom 1,888 715 2,197Europe 575 24 608United States of America 334 442 1,365Rest of the World 406 161 431 3,203 1,342 4,601 Finance income 261 271 534Finance costs - (6) (6)Profit before tax 3,464 1,607 5,129 Income tax expense (1,093) (459) (1,537) Profit for the period 2,371 1,148 3,592 Business segment - revenuePrivate jets 23,711 13,507 34,222Commercial jets 57,253 37,706 93,190Freight 6,262 3,939 10,752Other 3,082 1,126 2,204 90,308 56,278 140,368 Business segment - resultPrivate jets 938 624 1,610Commercial jets 1,941 533 2,641Freight 59 16 88Other 265 170 262 3,203 1,342 4,601 Finance income 261 271 534Finance costs - (6) (6)Profit before tax 3,464 1,607 5,129 Income tax expense (1,093) (459) (1,537) Profit for the period 2,371 1,148 3,592 3 Dividends Half year to Half year to Year to 31 January 31 January 31 July 2007 2006 2006 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Interim dividend for year ending 31 July 2006 of 6.1p per share - - 590Final dividend for year ending 31 July 2006 of 12.1p (2005: 11p) per share 1,200 1,063 1,063Special dividend for year ending 31 July 2005 of 20p per share - 1,933 1,933 1,200 2,996 3,586 The final and special dividend for the year ended 31 July 2006 was paid on 1December 2006. The proposed 2007 interim dividend of 6.7p per share was approved by the Board27 February 2007 and in accordance with IFRS has not been included as adeduction from equity at 31 January 2007. The dividend will be paid on 18 May2007 to those shareholders on the register at the close of business on 18 April2007. The ordinary shares will be marked ex-dividend on 19 April 2007. 4 Earnings per share The calculation of the basic and diluted earnings per share is based on thefollowing data: Half year to Half year to Year to 31 January 31 January 31 July 2007 2006 2006 (unaudited) (unaudited) (audited) £'000 £'000 £'000EarningsEarnings for the purposes of basic earnings per share being 2,301net profit attributable to equity holders of the parent 1,066 3,429Earnings for the purposes of diluted earnings per share 2,301 1,066 3,429 Number of sharesWeighted average number of ordinary shares for the purposes 9,800,486of basic earnings per share 9,665,518 9,665,518Effect of dilutive potential ordinary shares 198,440 301,428 314,851 Weighted average number of ordinary shares for the purposesof diluted earnings per share 9,998,926 9,966,946 9,980,369 5 Group statement of changes in equity Share Share Share premium option Hedging Translation Retained Total capital account reserve reserve reserve earnings equity £'000 £'000 £'000 £'000 £'000 £'000 £'000Opening equity as at 483 2,581 496 (28) (114) 9,545 12,9631 August 2006 Exchange differences on - - - - (123) - (123)translation of foreignoperations Net expense recognised - - - (123)directly in equity - - (123) Profit for the period - - - - - 2,301 2,301 Net movement in fair - - - 33 - - 33value of derivatives Share option movement - - (100) - 100 -for period - Total recognised income (100) - 2,334and expense for the period - - 33 2,401 Exercise of share options 14 769 - - - - 783 Dividends - - - - - (1,200) (1,200) Closing equity as at 31 January 2007 497 3,350 396 5 (237) 10,746 14,757 6 Net cash from operating activities Half year to Half year to Year to 31 January 31 January 31 July 2007 2006 2006 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Operating profit for the period 3,203 1,342 4,601 Adjustments for:Depreciation 181 228 445(Gain)/loss on disposal of property, plant and equipment (105) (4) 5Hedging losses/(gains) recognised through IAS 39 33 (5) (38)Share option cost for period 106 98 196 Operating cash flows before movements in working capital 3,418 1,659 5,209 Decrease/(increase) in stock & receivables 10,817 (2,618) (11,922)(Decrease)/increase in payables (3,046) 1,652 8,279 Cash generated from operations 11,189 693 1,566 Income taxes paid (1,153) (489) (1,406)Interest paid - (6) (6) Net cash from operating activities 10,036 198 154 7 Tax Half year to Half year to Year to 31 January 31 January 31 July 2007 2006 2006 (unaudited) (unaudited) (audited) £'000 £'000 £'000Current tax: UK corporation tax 728 180 785Foreign tax 407 307 897 1,135 487 1,682Deferred tax (42) (28) (145) 1,093 459 1,537 Income tax for the interim period is charged at 31.5% (2006: 28.6%),representing the best estimate of the weighted average income tax expected forthe full financial year. 8 Analysis of net funds Foreign 31 July exchange 31 January 2006 Cash flow effect 2007 £'000 £'000 £'000 £'000 Cash and short-term deposits 11,931 5,455 (75) 17,311 Net cash and cash equivalents 11,931 5,455 (75) 17,311 Total net funds 11,931 5,455 (75) 17,311 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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