6th Apr 2006 07:01
Air Partner PLC06 April 2006 AIR PARTNER PLC ("the Group" or "the Company") Interim results for the six months ended 31 January 2006 Air Partner is the world's leading aircraft charter broker. The Group providesaircraft charter to industry, commerce & governments worldwide. * Interim results in line with market expectations. * Underlying business grew in the period under review. * As previously stated, 2005 was an exceptional period with significant oneoff, non-repeating contracts. Consequently, the 2006 headline figures are lowercompared to the previous interim period. * Sales of £56.3m (H1:05: £63.8m H1:04: £43.6m)* Operating Profit of £1.34m (H1:05: £2.26m H1:04: £1.10m)* Pre-Tax Profit of £1.61m (H1:05: £2.44m H1:04: £1.19m)* Diluted EPS of 10.7p (H1:05: 16.7p H1:04: 8.3p)* Final dividend to 6.1p (H1:05: 5.5p H1: 04: 5.0p)* Cash at £12.4m (H1:05: £12.5m H1:04: £8.9m) * Start up costs for new offices in Italy, Spain, and US West Coast fullyaccounted for and remain on target for profitability in 2007. * Strong performance from UK and US offices. * Successful new business wins in period under review. * Newly created Flight Operations service performing well. * Current trading good and forward bookings currently 14% ahead of 2005comparable period. David Savile, Chief Executive commented: "Despite the one off, non-repeating contracts of 2005 making comparisonsdifficult, the underlying business has grown and performed well. In theremainder of the year we will continue to focus on client service, while seekingfurther diversification from product innovation and identifying new areas forgrowth. I am pleased to report strong forward bookings - 14% ahead of the sametime last year - and the Board remains confident about the Group's prospects." 6th April 2006 Notes to Editors: please ensure "Air Partner" is written in its correctsingular form, not in the plural. ENQUIRIES:Air Partner T: 01293 844 805David Savile, Chief ExecutiveSteph White, Finance Director TCA T: 0207 670 7400Tom Allison T: 0778 999 8020Alex Money AIR PARTNER PLC ("the Group" or "the Company") Interim results for the six months ended 31 January 2006 Air Partner is pleased to announce headline interim results in line with marketexpectations and continued growth in the Group's underlying business. As previously announced to the market in the Group's trading statement on the2nd February 2006, the previous year's interim results to 31st January 2005 wasan exceptional period, buoyed by a number of one off, non-repeating contracts.As expected trading in the period under review has normalised and as a resultthe reported headline figures for the six months to 31 January 2006 are belowthe 2005 interims. However, the underlying business has performed ahead of thefirst six months of the previous year and therefore these results representcontinued growth. Group sales were £56.3m (2005: £63.8m), 12% down on last year, but 29% up on2004. Pre-tax profits dipped to £1.61m (2005: £2.44m), 34% down on last year,but 35% up on 2004 and diluted earnings per share were 10.7 pence (2005: 16.7pence). Group cash was £12.4m at the period end (2005: £12.5m) and the board ofdirectors intends increasing the interim dividend by 10% to 6.1 pence (2005: 5.5pence). Strong performances again came from the US and UK operations. The UK has tradedwell in its own right, and as a hub to the Group's 20 international offices.Reflecting this pivotal role, Mark Briffa, previously MD of the UK operationswas appointed Group Chief Operating Officer and joined the main board on the 1stFebruary 2006. The US returned a consistent performance, underpinned by itsregular client base, and the French team has worked hard returning to its usuallevel of profitability after a weak 2005. The UAE office also performed well,benefiting from the increased global focus on Iraq. Conversely, the German andSwiss businesses have performed below expectations and work is underway toimprove their performance in line with the rest of the Group. New offices in Italy, Spain, and the US West Coast remain in an early stage ofdevelopment. While they are budgeted to make a negative contribution this year,they are all showing good progress towards profitability in 2007 and all theassociated start up costs are accounted for in the period under review.Geographic client diversity is a continued theme for the Group, both forgovernment and corporate work; this is a direct derivative of the Company'soffice roll out strategy. In order to further support this, Air Partnercontinues to invest significantly in its infrastructure and human resources tomaximise the yield from its office network. The Group has enjoyed a steady stream of new business wins, including somenotable contracts from government customers; this sector has continued toperform well, accounting for just under 40% of Group sales. Pleasingly, whilethe nature of the Group's work continues to be confidential, its sources remainwell spread geographically. The Commercial Aircraft Division has also benefited from diversity with strongperformances in the Sports, Cruising, Automotive and aforementioned Governmentsectors. In contrast, the Conference & Incentive market has seen a shift fromquality charters to low-cost scheduled carriers, a move Air Partner believeswill reverse over time, as clients realise the compromises associated with thatchange. The Executive Jet Division has benefited from the overall growth in the Europeanbusiness jet market. The market is divided between corporate and 'jet-for-leisure' users. Historically Air Partner has been stronger in thecorporate sector; however, more recently the jet-for-leisure market has shownstrong growth, spurred by significant advertising campaigns undertaken bycompetitors. In response to this growth Air Partner successfully launched itsJet Membership Programme ("JMP") in 2004 and its joint venture with NorthAmerican card scheme partner, Sentient Jet, in 2005. The profitability of theseventures, combined with the sectors' continued growth is sufficientencouragement for Air Partner to further invest in this sector for greatermarket share. The UK-based Flight Operations service was created in October 2005, to provide acomprehensive flight logistics capability. The unit provides flight planning,over-flight, diplomatic clearance, weather, and ground liaison services to bothaircraft owners, and directly to some of Air Partner's suppliers. Althoughsmall at present, the service augments the Group's existing 24 hour Operationsunit, providing new skills and new revenue opportunities. In addition, asincreasing numbers of the Group's clients expect Air Partner to fly intochallenging and operationally hostile environments, this in-house capabilityprovides Air Partner with another unique selling point. In summary, the period under review has seen continued growth in the Group'sunderlying business and further progress against its stated strategy.Encouragingly, forward bookings are currently 14% ahead of this time last year.Trading since the 31st January 2006 has been in line with expectations and yourBoard remains confident in the Group's future prospects and continued growth.Air Partner will continue to pursue excellent client service, new officeopenings, client diversification, product innovation and further opportunitiesin the jet-for-leisure sector. Tony MackChairman AIR PARTNER PLC Unaudited consolidated income statement for the six months ended 31 January 2006 Half year to Half year to Year to 31 January 31 January 31 July 2006 2005 2005 (unaudited) (unaudited) (unaudited)Continuing operations Note £'000 £'000 £'000 Revenue 3 56,278 63,820 122,521Cost of sales (50,048) (56,119) (108,283) Gross profit 6,230 7,701 14,238Administrative expenses (4,888) (5,440) (10,263) Operating profit 1,342 2,261 3,975Finance income 271 198 468Finance costs (6) (17) (29) Profit before tax 1,607 2,442 4,414Taxation 8 (459) (823) (1,427) Profit for the period 1,148 1,619 2,987 Attributable to:Equity holders of the parent 1,066 1,598 2,904Minority interests 82 21 83 1,148 1,619 2,987Earnings per share:Basic 5 11.0p 17.0p 30.6pDiluted 5 10.7p 16.7p 29.8p AIR PARTNER PLC Unaudited consolidated statement of recognised income and expense Half year to Half year to Year to 31 January 31 January 31 July 2006 2005 2005 (unaudited) (unaudited) (unaudited) £'000 £'000 £'000 Exchange differences on translation of foreign operations (115) 99 135 Net (expense) / income recognised directly in equity (115) 99 135Profit for the period 1,148 1,619 2,987 Total recognised income and expense for the period 1,033 1,718 3,122 Attributable to:Equity holders of the parent 951 1,697 3,039Minority interests 82 21 83 1,033 1,718 3,122 AIR PARTNER PLC Unaudited consolidated balance sheet as at 31 January 2006 31 January 31 January 31 July 2006 2005 2005 (unaudited) (unaudited) (unaudited) Note £'000 £'000 £'000Assets Non-current assetsProperty, plant and equipment 2,238 2,521 2,373Deferred tax assets 340 160 228 2,578 2,681 2,601Current assetsTrade and other receivables 14,309 12,179 11,691Cash and cash equivalents 12,426 12,536 15,437 26,735 24,715 27,128 Total assets 29,313 27,396 29,729 Current liabilitiesTrade and other payables (7,490) (5,454) (6,048)Current tax liabilities (491) (775) (521)Bank overdrafts and loans - (320) (343)Other creditors (9,464) (9,012) (9,165) (17,445) (15,561) (16,077) Net current assets 9,290 9,154 11,051 Non-current liabilitiesBank overdrafts and loans - (160) -Long term provisions (113) (102) (111)Deferred tax liability (216) (205) (134) (329) (467) (245)Total liabilities (17,774) (16,028) (16,322)Net assets 11,539 11,368 13,407 EquityShare capital 483 473 483Share premium account 2,581 1,785 2,581Hedging reserve 4 - 9Translation reserve 42 99 157Share option reserve 398 98 300Retained earnings 7,772 8,718 9,702 Equity attributable to equity holders of the 6 11,280 11,173 13,232parent Minority equity interest 259 195 175Total equity 11,539 11,368 13,407 AIR PARTNER PLC Unaudited consolidated cash flow statement for the six months ended 31 January 2006 Half year to Half year to Year to 31 January 31 January 31 July 2006 2005 2005 (unaudited) (unaudited) (unaudited) Note £'000 £'000 £'000 Net cash from operating activities 7 198 3,368 5,937 Investing activitiesInterest received 271 198 468Proceeds on disposal of property, plant and equipment 22 - 1Investments - (69) (69)Purchases of property, plant and equipment (94) (103) (294) Net cash from investing activities 199 26 106 Financing activitiesDividends paid (3,073) (1,150) (1,602)Decrease in bank loans (343) (164) (323)Proceeds on issue of shares - 511 1,317 Net cash used in financing activities (3,416) (803) (608) Net (decrease)/increase in cash and cash equivalents (3,019) 2,591 5,435 Opening cash and cash equivalents 15,437 9,983 9,983Effect of foreign exchange rate changes 8 (38) 19 Closing cash and cash equivalents 12,426 12,536 15,437 Reconciliation of net cash flow to movement net funds Half year to Half year to Year to 31 January 31 January 31 July 2006 2005 2005 (unaudited) (unaudited) (unaudited) Note £'000 £'000 £'000 (Decrease)/increase in cash in the year (3,019) 2,591 5,435Cash outflow from movement in debt financing 343 164 323Effect of foreign exchange rate changes 8 (31) 4 Movement in net funds during the period (2,668) 2,724 5,762Opening net funds 15,094 9,332 9,332 Closing net funds 9 12,426 15,056 15,094 AIR PARTNER PLC Notes to the interim results 1 General information The comparative figures for the year ended 31 July 2005 are not theCompany's statutory accounts for that financial year. Those accounts, which wereprepared under UK Generally Accepted Accounting Principles ("UK GAAP"), havebeen reported on by the Company's auditor and delivered to the Registrar ofCompanies. The auditor's report was unqualified and did not contain statementsunder section 237 (2) or (3) of the Companies Act 1985. 2 Accounting policies Prior to 2006 the Group prepared its audited financial statements under UKGAAP. For the year ended 31 July 2006 the Group is required under law(International Accounting Standard ("IAS") regulation DC1606/2002) to prepareits annual consolidated financial statements in accordance with InternationalFinancial Reporting Standards ("IFRS") adopted for use in the European Union ("EU"). This interim financial information has been prepared on the basis of therecognition and measurement requirements of IFRS in issue that either areendorsed by the EU and effective 31 January 2006 or are expected to be endorsedand effective at 31 July 2006, the Group's first annual reporting date at whichit is required to use adopted IFRS. Based on these adopted and unadopted IFRSthe Directors have made assumptions about the accounting policies expected to beapplied, which are as set out below, when the first annual IFRS financialstatements are prepared for the year ending 31 July 2006. In addition, the adopted IFRS that will be effective in the annualfinancial statements for the year ending 31 July 2006 are still subject tochange and to additional interpretations and therefore cannot be determined withcomplete certainty. Accordingly, the accounting policies for that period will bedetermined only when the annual financial statements are prepared for the yearending 31 July 2006. The Group has not adopted the reporting requirements of IAS34 'Interim Financial Reporting'. a) Statement of compliance An explanation of how the translation to IFRS has affected the reportedfinancial position, financial performance, and cash flows of the Group isprovided in the appendix on page 10. This includes reconciliations of equity andthe income statement for comparative periods reported under UK GAAP (previousGAAP) to those reported for those periods under IFRS (new GAAP). b) Basis of preparation The financial statements are presented in Sterling, rounded to the nearestthousand unless otherwise stated. They are been prepared on the historical costbasis, except for the revaluation of certain financial instruments which arestated at fair value. These interim financial statements have been prepared in accordance withthe accounting policies set out below, taking into account the requirements andoptions in IFRS 1 'First-time adoptions of International Financial ReportingStandards'. They have also been applied in preparing an opening IFRS balancesheet at 1 August 2004 for the purpose of the transition to IFRS, as required byIFRS 1 except, in respect of foreign currency financial hedging and cumulativetranslation differences, where the Company has taken advantage of the exemptionin IFRS 1 not to restate comparative information for 2004. c) Basis of consolidation The consolidated financial statements include the results of the Companyand its subsidiary undertakings, all of which have been made up to 31 January2006. i) Subsidiaries Subsidiaries are entities controlled by the Company. Control exists whenthe Company has the power, directly or indirectly, to govern the financial andoperating policies of an entity so as to obtain benefits from its activities. Inassessing control, potential voting rights that presently are exercisable orconvertible are taken into account ii) Transactions eliminated on consolidation Intra-group balances, and any unrealised gains and losses or income andexpenses arising from intra-group transactions are eliminated in preparing thecondensed interim financial statements. d) Foreign currency i) Foreign currency transactions Transactions in foreign currencies are translated at the foreign exchangerate prevailing at the time of the translation. Monetary assets and liabilitiesdenominated in foreign currencies at the balance sheet date are translated toSterling at the foreign exchange rate ruling at that date. Foreign exchangedifferences arising on translation are recognised in the income statement.Non-monetary assets and liabilities that are measured in terms of historicalcost in a foreign currency are translated using the exchange rate at the date ofthe transaction. ii) Financial statements of foreign operations The assets and liabilities of foreign operations, including fair valueadjustments arising on consolidation, generally are translated to Sterling atforeign exchange rates ruling at the balance sheet date. The revenues andexpenses of foreign operations are translated to sterling at the average rate(monthly) of exchange ruling during the year. Foreign exchange differencesarising on re-translation are recognised directly in a separate component ofequity. e) Property, plant and equipment Items of property, plant and equipment are stated at cost or deemed costless accumulated depreciation and impairment losses. Depreciation is charged to the income statement by instalments over theestimated useful lives as follows: Short leasehold property - over the life of the lease Leasehold improvements - over the life of the lease Plant and equipment - 17-33% per annum on a straight line basis Motor vehicles - 25% per annum on a reducing balance basis Aircraft - 10% per annum on a straight line basis f) Revenue Revenue is measured (excluding Value Added Tax) from the provision of goodsand services to third party customers. In respect of the Group's principalactivities (being that of air charter brokers hiring aircraft for charter to itscustomers) and the provision of travel agency services the full contract valueis realised as revenue when the economic benefits are deemed to have passed tothe customer (i.e. the first flight has taken place). Income from aircraftleasing is recognised monthly, which mirrors invoicing and contractual terms. g) Share based payment transactions The Group will from time to time offer employees the chance to acquireshares of the Company. The fair value of options granted is recognised as anemployee expense with a corresponding increase in equity. The fair value ismeasured at grant date and spread over the period during which the employeebecomes unconditionally entitled to the options. The fair value of the optionsgranted is measured using the Black Scholes model. h) Income tax Income tax on the income statement for the periods presented comprisescurrent and deferred tax. Income tax is recognised in the income statementexcept to the extent that it relates to items recognised directly in equity, inwhich case it is recognised in equity. Current tax is the expected tax payable on the taxable income for the year,using tax rates enacted or substantially enacted at the balance sheet date, andany adjustments to the tax payable in respect of previous years. Deferred tax is provided using the balance sheet liability method, providing fortemporary differences between the carrying amounts of assets and liabilities forfinancial reporting purposes i) Segmental reporting A segment is a distinguishable component of the Group that is engaged inproviding services (business segment), or in providing services within aparticular economic environment (geographical segment), which is subject torisks and rewards that are different from those of other segments. j) Leasing Leases are classified as finance leases whenever the terms of the leasetransfer substantially all the risks and rewards of ownership to the lessee. Allother leases are classified as operating leases. k) Cash and cash equivalents Cash and cash equivalents comprises cash balances and call deposits with anoriginal maturity if three months or less. Bank overdrafts that are repayable ondemand and from an integral part of the Group's cash management are included asa component of cash and cash equivalents for the purpose of the statement ofcash flows. l) Derivative financial instruments The Group uses derivative financial instruments to hedge its exposure toforeign exchange risk from operational activities. In accordance with itstreasury policy, the Group does not hold or issue derivative financialinstruments for trading purposes. Derivatives that do not qualify for hedgeaccounting are accounted for as trading instruments and any change in their fairvalue is recognised in the income statement. Where derivatives qualify for hedge accounting, recognition of anyresultant gain or loss depends on the nature of the item being hedged (forfurther guidance see accounting policy m). The fair value of forward exchangecontracts is their quoted market price at the balance sheet date, being thepresent value of the quoted forward price. m) Cash flow hedging When a derivative financial instrument is designated as a hedge of thevariability in cash flows of a recognised asset or liability, or a highlyprobable forecasted transaction, the effective part of any gain or loss on thederivative financial instrument is recognised directly in equity. If a hedge ofa forecasted transaction subsequently results in the recognition of a financialasset or liability, then the associated gains or looses that were recogniseddirectly in equity are reclassified into the income statement in the same periodor periods during which the asset acquired or liability assumed affects theincome statement. When a hedging instrument expires or is sold, terminated or exercised, orthe entity revokes designation of the hedge relationship but the hedged forecasttransaction is still expected to occur, the cumulative gain or loss at thatpoint remains in equity and is recognised in accordance with the above policywhen the transaction occurs. If the hedged transaction is no longer expected totake place, then the cumulative unrealised gain or loss recognised in equity isrecognised immediately in the income statement. 3 Segmental analysis Half year to Half year to Year to 31 January 31 January 31 July 2006 2005 2005 (unaudited) (unaudited) (unaudited) £'000 £'000 £'000 Geographical segment - revenue United Kingdom 27,564 32,158 61,213 European Union 16,031 14,508 32,889 United States of America 9,664 14,040 22,127 Rest of the World 3,019 3,114 6,292 56,278 63,820 122,521 Geographical segment - result United Kingdom 715 1,235 2,246 European Union 24 110 408 United States of America 442 738 1,194 Rest of the World 161 178 127 1,342 2,261 3,975 Finance income 271 198 468 Finance costs (6) (17) (29) Profit before tax 1,607 2,442 4,414 Income tax expense (459) (823) (1,427) Profit for the period 1,148 1,619 2,987 Business segment - revenue Air charter 55,449 63,018 120,718 Aircraft leasing 269 267 523 Travel agency 558 528 1,266 Insurance 2 7 14 56,278 63,820 122,521 Business segment - result Air charter 1,172 2,118 3,972 Aircraft leasing 146 130 (34) Travel agency 23 8 30 Insurance 1 5 7 1,342 2,261 3,975 Finance income 271 198 468 Finance costs (6) (17) (29) Profit before tax 1,607 2,442 4,414 Income tax expense (459) (823) (1,427) Profit for the period 1,148 1,619 2,987 4 Dividends Half year to Half year to Year to 31 January 31 January 31 July 2006 2005 2005 (unaudited) (unaudited) (unaudited) £'000 £'000 £'000 Interim dividend for year ending 31 July 2005 of 5.5p per share - - 547 Final dividend for year ending 31 July 2005 of 11p (2004: 10p) per 1,063 931 931shareSpecial dividend for year ending 31 July 2005 of 20p per share 1,933 - - 2,996 931 1,478 The final and special dividend for the year ended 31 July 2005 was paid on 1December 2005. The proposed 2006 interim dividend of 6.1p per share was approved by the Board27th February 2006 and in accordance with IFRS has not been included as adeduction from equity at 31 January 2006. The dividend will be paid on 19 May2006 to those shareholders on the register at the close of business on 21 April2006. The ordinary shares will be marked ex-dividend on 19 April 2006. 5 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 2006 2005 2005 (unaudited) (unaudited) (unaudited) £'000 £'000 £'000EarningsEarnings for the purposes of basic earnings per share being net profit 1,066 1,598 2,904attributable to equity holders of the parent Earnings for the purposes of diluted earnings per share 1,066 1,598 2,904Number of shares.Weighted average number of ordinary shares for the purposes of basic 9,665,518 9,407,081 9,495,237earnings per shareEffect of dilutive potential ordinary shares 301,428 163,225 250,285Weighted average number of ordinary shares for the purposes of diluted 9,966,946 9,570,306 9,745,522earnings per share 6 Group statement of changes in equity Share Share Share Hedging Translation Retained Total premium option capital account reserve reserve reserve earnings equity £'000 £'000 £'000 £'000 £'000 £'000 £'000 Opening equity as at 1 August 2005 483 2,581 300 9 157 9,702 13,232Net movement in fair value of - - - (5) - - (5)derivatives Share option movement for period - - 98 - - - 98 Exchange differences on translation of - - - - (115) - (115)foreign operations Net expense recognised directly in - - 98 (5) (115) - (22)equityProfit for the period - - - - 1,066 1,066Total recognised income and expense for - - 98 (5) (115) 1,066 1,040the periodEquity dividends paid during the half - - - - - (2,996) (2,996)yearClosing equity as at 31 January 2006 483 2,581 398 4 42 7,772 11,280 7 Net cash from operating activities Half year to Half year to Year to 31 January 31 January 31 July 2006 2005 2005 (unaudited) (unaudited) (unaudited) £'000 £'000 £'000Operating profit for the period 1,342 2,261 3,975Adjustments for: Depreciation 228 243 510Exchange differences - (42) 241(Gain)/loss on disposal of property, plant and equipment (4) 1 2Hedging (gains)/losses recognised through IAS 39 (5) - 9Share option cost for period 98 98 300Operating cash flows before movements in working capital 1,659 2,561 5,037(Increase)/decrease in receivables (2,618) 1,635 2,102Increase/(decrease) in payables 1,652 (178) 477Cash generated from operations 693 4,018 7,616Income taxes paid (489) (633) (1,650)Interest paid (6) (17) (29)Net cash from operating activities 198 3,368 5,937 8 Tax Half year to Half year to Year to 31 January 31 January 31 July 2006 2005 2005 (unaudited) (unaudited) (unaudited) £'000 £'000 £'000Current tax:UK corporation tax 180 477 871 Foreign tax 307 376 731 487 853 1,602Deferred tax (28) (30) (175) 459 823 1,427 Income tax for the interim period is charged at 28.6% (2005: 33.7%),representing the best estimate of the weighted average income tax expected forthe full financial year. 9 Analysis of net funds 31 July Foreign 31 January 2005 Cash flow exchange effect 2006 £'000 £'000 £'000 £'000 Cash and short term deposits 15,437 (3,019) 8 12,426Net cash and cash equivalents 15,437 (3,019) 8 12,426Loans due within one year (343) 343 - -Total net funds 15,094 (2,676) 8 12,426 10 Statutory group financial statements The financial information contained in this document does not constitutestatutory accounts as defined in section 240 of the Companies Act 1985. Theauditors have issued an unqualified opinion on the Group's statutory financialstatements under UK GAAP for the year ended 31 July 2005, which have been filedwith the Registrar of Companies. Appendix: Explanation of transition to IFRS The reconciliations of equity at 31 January 2005 and the reconciliation ofprofit for the six months ended 31 January 2005 have been included below toenable a comparison of the 2005 interim figures with those published in thecorresponding period of the financial year. Reconciliation of equity at 31 January 2005 Previous UK GAAP Remove proposed Reclassify Recognise IFRS 31 January 31 January translation share 2005 dividend differences options 2005 to other reserves £'000 £'000 £'000 £'000 £'000Assets Non-current assetsProperty, plant and 2,521 - - - 2,521equipmentDeferred tax assets 131 - - 29 160 2,652 - - - 2,681Current assetsTrade and other receivables 12,179 - - - 12,179Cash and cash equivalents 12,536 - - - 12,536 24,715 - - - 24,715 Total assets 27,367 - - 29 27,396 Current liabilitiesTrade and other payables (5,975) 521 - - (5,454)Current tax liabilities (775) - - - (775)Bank overdrafts and loans (320) - - - (320)Other creditors (9,012) - - - (9,012) (16,082) 521 - - (15,561)Net current assets 8,633 521 - - 9,154Non-current liabilitiesBank loans (160) - - - (160)Long term provisions (102) - - - (102)Deferred tax liability (205) - - - (205) (467) - - - (467)Total liabilities (16,549) 521 - - (16,028)Net assets 10,818 521 - 29 11,368 EquityShare capital 473 - - - 473Share premium account 1,785 - - - 1,785Hedging reserve - - - - -Translation reserve - - 40 - 40Share option reserve - - - 98 98Retained earnings 8,365 521 (40) (69) 8,748Equity attributable to 10,623 521 - 29 11,144equity holders of the parentMinority equity interest 195 - - - 195Total equity 10,818 521 - 29 11,368 Reconciliation of profit for the six months ended 31 January 2005 Previous UK GAAP Recognise share Reclassify IFRS 31 translation January 2005 options differences 2005 £'000 £'000 £'000 £'000 Revenue 63,581 - 239 63,820Cost of sales (55,901) - (218) (56,119) Gross profit 7,680 - 21 7,701Administrative expenses (5,363) (98) 21 (5,440) Operating profit 2,317 (98) 42 2,261Finance income 199 - (1) 198Finance costs (18) - 1 (17) Profit before tax 2,498 (98) 42 2,442Taxation (850) 29 (2) (823) Profit for the period 1,648 (69) 40 1,619 Attributable to:Equity holders of the parent 1,627 (69) 40 1,598Minority interests 21 - - 21 1,648 (69) 40 1,619 The reconciliations of equity as at 1 August 2004 (date of transition to IFRS)and at 31 July 2005 (date of last UK GAAP financial statements) and thereconciliation of profit for 2005, as required by IFRS1, have been includedbelow. Reconciliation of equity at 1 August 2004 Previous UK Remove proposed Recognise share IFRS 1 August GAAP 1 August 2004 dividend options 2004 £'000 £'000 £'000 £'000Assets Non-current assetsProperty, plant and equipment 2,546 - - 2,546Deferred tax assets 132 - 31 163 2,678 - 31 2,709Current assetsTrade and other receivables 13,716 - - 13,716Cash and cash equivalents 9,983 - - 9,983 23,699 - - 23,699 Total assets 26,377 - 31 26,408 Current liabilitiesTrade and other payables (8,847) 1,129 - (7,718)Current tax liabilities (461) - - (461) Bank overdrafts and loans (325) - - (325)Other creditors (6,942) - - (6,942) (16,575) 1,129 - (15,446)Net current assets 7,124 1,129 - 8,253Non-current liabilitiesBank overdrafts and loans (326) - - (326) Long term provisions (101) - - (101) Deferred tax liability (197) - - (197) (624) - - (624) Total liabilities (17,199) 1,129 - (16,070) Net assets 9,178 1,129 31 10,338 EquityShare capital 466 - - 466Share premium account 1,281 - - 1,281Hedging reserve - - - -Translation reserve - - - -Share option reserve - - 104 104Retained earnings 7,268 1,129 (73) 8,324 Equity attributable to equity holders of the 9,015 1,129 31 10,175parent Minority equity interest 163 - - 163 Total equity 9,178 1,129 31 10,338 Reconciliation of equity as at 31 July 2005 Previous UK Remove Reclassify Recognise hedging Recognise IFRS 31 July GAAP 31 July proposed translation losses on share financial 2005 dividend differences Instruments options 2005 £'000 £'000 £'000 £'000 £'000 £'000Assets Non-current assetsProperty, plant and 2,373 - - - - 2,373equipment Deferred tax assets 135 - - 3 90 228 2,508 - - 3 90 2,601Current assetsTrade and other receivables 11,691 - - - - 11,691Cash and cash equivalents 15,437 - - - - 15,437 27,128 - - - - 27,128 Total assets 29,636 - - 3 90 29,729 Current liabilitiesTrade and other payables (9,121) 3,073 - - - (6,048)Current tax liabilities (521) - - - - (521) Bank overdrafts and loans (343) - - - - (343)Other creditors (9,165) - - - - (9,165) (19,150) 3,073 - - - (16,077)Net current assets 7,979 3,073 - - - 11,051Non-current liabilitiesLong term provisions (111) - - - - (111) Deferred tax liability (134) - - - - (134) (245) - - - - (245) Total liabilities (19,395) 3,073 - - - 16,322 Net assets 10,241 3,073 - 3 90 13,407 EquityShare capital 483 - - - - 483Share premium account 2,581 - - - - 2,581Hedging reserve - - - 9 - 9Translation reserve - - 157 - - 157Share option reserve - - - - 300 300Retained earnings 7,002 3,073 (157) (6) (210) 9,702 Equity attributable to 10,066 3,073 - 3 90 13,232equity holders of theparent Minority equity interest 175 - - - - 175 Total equity 10,241 3,073 - 3 90 13,407 Reconciliation of profit for the year ended 31 July 2005 Previous UK GAAP Recognise share Recognise Reclassify IFRS 31 July 31 July options hedging losses translation 2005 on financial instruments differences 2005 £'000 £'000 £'000 £'000 £'000 Revenue 123,585 - - (1,064) 122,521Cost of sales (109,199) - - 916 (108,283) Gross profit 14,386 - - (148) 14,238Administrative expenses (10,055) (300) (9) 101 (10,263) Operating profit 4,331 (300) (9) (47) 3,975Finance income 468 - - - 468Finance costs (28) - - (1) (29) Profit before tax 4,771 (300) (9) (48) 4,414Taxation (1,546) 90 3 26 (1,427) Profit for the period 3,225 (210) (6) (22) 2,987 Attributable to:Equity holders of the parent 3,142 (210) (6) (22) 2,904Minority interests 83 - - - 83 3,225 (210) (6) (22) 2,987 Principal differences 1 Dividend recognition - IAS 10 Under current UK GAAP, proposed dividends are recognised in the financialresults for the period to which they relate. However, under IFRS, a dividend canonly be recognised if it has been formally declared during the accounting periodreported. The Air Partner Board declares interim and final dividends after the end of eachaccounting period at the same time as approving the interim and annual reports.Hence, Air Partner will no longer accrue proposed dividends in the financialperiod to which they relate. Consequently the final dividend for 2004 and the final and special dividend for2005 are not recognised as a liability in the opening balance sheet and theproposed interim dividend is not recognised in the balance sheet for 31 January2005 and 31 January 2006. 2 Accounting for foreign currency transitions and financial instruments - IAS 39 Air Partner PLC has a policy of forward purchasing / selling foreign currency tocover future contracts. Under IAS 39 any gains or losses from the booked valueagainst the fair value of forward foreign currency contracts have to berecognised through a hedging and translation reserve at period end. Translation differences on the exchange conversion of a foreign subsidiary arenow posted to a hedging and translation reserve rather than the retainedearnings account. 3 Share-based payments - IFRS 2 The Company has adopted IFRS 2 only in respect of awards granted after 7November 2002 which had not vested at 1 August 2005. A charge is made to theoperating profit representing the fair value of share options granted toemployees with the opposing entry taken to equity. The fair value has beencalculated using the Black Scholes model and is charged to the income statementover the relevant vesting period 4 Segmental reporting - IAS 14 Both UK GAAP and IFRS require statutory segmental reporting to match theinternal reporting structure. Under UK GAAP there is an exemption if thedisclosure of a particular segment is considered by the Directors to beprejudicial to the interests of the Company. Under IFRS there is no exemptionand Air Partner will disclose segment results by geographic location. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
AIR.L