31st Mar 2008 07:01
Air Partner PLC31 March 2008 Air Partner PLC ("the Group" or "the Company") Results for the six months ended 31 January 2008 Highlights: * Sales up 21% to £109.4m (H12007: £90.3m) * Profit before tax up 12% to £3.9m (H12007: £3.5m) * Diluted EPS up 9% to 25.1p (H12007: 23.0p) * Proposed interim dividend up 10% to 7.4p (H12007: 6.7p) * Cash down 17% to £14.3m (due to 2007 special dividend payment) * 20% increase in new clients * Diversification strategy driving growth * Government and high net worth sectors strong * UK, France and Italy best performing offices * Freight division has exceeded its annual target * Current trading good * Excellent forward orders up 40% on comparative period David Savile, Chief Executive of Air Partner commented: "I am pleased to reportthat today Air Partner serves more clients, has greater sales revenue anddelivers higher profits than at any time in its 47 year history. Air Partner'steam is unique within its peer group; it demonstrates outstanding skills on adaily basis, and it is well placed to respond favourably to today's marketconditions." 31st March 2008 Enquiries: Air Partner plc T. 01293 844 805David Savile (on March 31st 2008) T. 0207 002 1080Temple Bar Advisory T. 0207 002 1080Tom Allison T. 0778 999 8020Nicola Flynn Notes to editors: please ensure "Air Partner" is written in its correct singularform, not in the plural. Air Partner PLC ("the Group" or "the Company") Results for the six months ended 31 January 2008 Chairman's Statement I am pleased to report that Air Partner has produced excellent half yearresults, despite a deterioration in the global economic climate. Air Partner iscurrently trading in line with full year expectations and the Company's forwardorders are 40% ahead of this time last year. In the six months to 31 January 2008, Group sales have increased 21% to £109.4m(H1 2007: £90.3m), with client numbers up 20%, and profit before tax rising 12%to £3.9m (H1 2007: £3.5m). Cash reduced by 17% to £14.3m (H1 2007: £17.3m) onthe back of £8.0m paid to shareholders as part of a special dividend paid in2007. Underlying cash growth continues unabated, up 27% over the last 12months. Government business, across all divisions, accounted for 40% of allrevenues (H1 2007: 35%) reflecting Air Partner's ability to offer a pre-eminentservice to a multitude of departments of state across the globe. The board isproposing an interim dividend of 7.4p (H1 2007: 6.7p), to maintain the Group'slongstanding 10% growth policy; this will be paid be on 16 May 2008 to thoseshareholders on the register at the close of business on 18 April 2008. Trading conditions in the period under review have been good, a slight changeafter almost two years of near-perfect market conditions. Air Partner hasadjusted well and our diversity of product, geography and clients has enabledthe Group to maintain its growth in changing economic times. As a result, theGroup has experienced a slight shift in the business mix as products and regionsalter their contribution to Group sales. The Group's international office network is a key element in our diversity. Ashas so often been the case, exceptionally strong performances in some areas,have compensated weaker areas. In this period, the UK, France and Italy haveperformed strongly, as the USA slightly reduced its contribution. With ournetwork, it should be remembered that the initial investment in each of theGroup's 22 overseas offices has never exceeded £0.25m, and with break-eventypically coming during year two, the return on investment of some offices canbe impressive. The French office, which has produced average annual profits inexcess of £0.5m over the last few years, on an initial investment of one tenthof that made ten years ago, is a good example of this. Commercial Jets (CJ) The Commercial Jets division has grown sales by 28% and profit by 9%. In all,CJ accounts for 67% (H1 2007: 63%) of Group sales. The key driver behind this isan increase in business from global Governments, which has significantly offsetthe smaller reduction in the more discretionary corporate sector spend. Thedivision's ability to continue its growth, despite this ebb and flow, is furtherevidence of our success in executing the diversification strategy - ensuringthat revenues are spread across geography, client and product. Divisionalmargins have slightly reduced against the same period last year due to thetraditional margin variances that are inherent across our business, someincreased competition in this sector, and a propensity towards longer termcontracts, that operate at lower margins. The Group's strong sales growthreflects the inherent weaknesses in the scheduled air products that cannotprovide the flexibility we offer to our clients. Private Jets (PJ) Our Private Jet division spans broking, JetCard, and private jet operations atBiggin Hill airport. Total sales across the three products was up 11%,particularly driven by private client activity, which was 20% stronger than thesame period last year, as a growing number of high net worth clients startedusing our wider product lines. The broking teams remain the bedrock of our business and corporate clients arethe largest users. Activity levels remained high, although there was emergingevidence of corporate belt-tightening as companies reviewed budgets duringuncertain times. JetCard, a jet membership programme targeting individuals, is proving to beanother very strong product and sales are up over 50% through the last year,with higher card renewal rates. The card offers individuals guaranteed accessto private jets at fixed and competitive rates, and in turn provides the Groupwith a significant boost to cash levels. The Biggin Hill operation, which accounts for 6% of Group sales, has madefurther progress against the Group's strategic aims for the division.Additions to the fleet, cross-selling from our broking business, optimisingfleet hours and revenues, and approval for our new private jet enclave are allgood achievements. However, there is still work to be done to reach targetedreturns, and there remain some legacy contracts that need more time before theyare resolved. As a result, divisional winter losses are on a par with lastyear, but we enter the peak Summer season expecting a modest increase inprofitability, albeit behind its divisional target. The Biggin facility hasproven to be a highly beneficial 'showroom' for the rest of the Group's PJactivity. Overall, Private Jet profitability is encouragingly up 10% and it now represents24% (H1 2007: 27%). The slight comparable percentage decrease is due only to AirPartner's ability to grow CJ faster than PJ. I am particularly encouraged byour continuing ability to gain new clients in this division, notably those whoseflight activity is unlikely to be affected by economic cycles. Other activities The world cargo market is currently growing at 6% per annum and it is pleasingto report that our Freight division, which accounts for 8% of Group sales,exceeded its annual target before the half-year mark. H1 sales were up 39%,reflecting a well managed team, focused on meeting client expectations.Profitability has increased by 74%, as we integrated the global freight brokingteam under UK management. The many support divisions, comprising the final 1% of Group activity, are alltrading similarly well. Current Trading The Group is currently well served by good opportunities in every sector.Despite limited forward visibility, as at the end of February, advanced ordersare 40% ahead of the comparable period, and cash has risen a further £3.6m.Consequently, the board remains confident that Air Partner is well positioned togrow and enjoy good trading in the second half of the financial year. As previously announced, after 18 happy and successful years as Group Chairman,this is my last report to shareholders as Chairman. However, as a significantand long term shareholder, I remain on the board as a non-executive director. Iam delighted that Aubrey Adams will join the board as non-executive chairmanwith effect from tomorrow and I wish him every success in his new role. Today'sfigures are a terrific result from a very professional and focused team, and mythanks go to all 250 members of the Company and all those who have supported andworked with us throughout my executive tenure. Tony Mack31st March 2008 Unaudited condensed consolidated income statementfor the six months ended 31 January 2008 Half year to Half year to Year to 31 January 31 January 31 July 2008 2007 2007 (unaudited) (unaudited) (audited)Continuing operations Note £'000 £'000 £'000 Revenue 2 109,366 90,308 185,780Cost of sales (95,923) (76,064) (160,600)Gross profit 13,443 14,244 25,180Administrative expenses (9,981) (11,041) (18,233)Operating profit 3,462 3,203 6,947Finance income 422 261 668Finance costs (3) - (9)Profit before tax 3,881 3,464 7,606Taxation 7 (1,297) (1,093) (2,511)Profit for the period 2,584 2,371 5,095Attributable to:Equity holders of the parent 2,584 2,301 5,089Minority interests - 70 6 2,584 2,371 5,095Earnings per share:Basic 4 25.6p 23.5p 51.8pDiluted 4 25.1p 23.0p 50.3p Unaudited condensed consolidated statement of recognised income and expensefor the six months ended 31 January 2008 Half year to Half year to Year to 31 January 31 January 31 July 2008 2007 2007 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Exchange differences on translation of foreign operations 451 (123) (175)Net income / (expense) recognised directly in equity 451 (123) (175)Profit for the period 2,584 2,371 5,095Total recognised income and expense for the period 3,035 2,248 4,920Attributable to:Equity holders of the parent 3,035 2,178 4,909Minority interests - 70 11 3,035 2,248 4,920 Unaudited condensed consolidated balance sheetas at 31 January 2008 31 January 31 January 31 July 2008 2007 2007 (unaudited) (unaudited) (audited) Note £'000 £'000 £'000AssetsNon-current assetsGoodwill 4,373 3,877 3,619Other intangible assets 292 - 379Property, plant and equipment 1,470 1,463 1,421Deferred tax assets 171 372 157 6,306 5,712 5,576Current assetsInventories 371 457 395Trade and other receivables 26,551 15,328 26,675Financial assets 216 - -Cash and cash equivalents 14,349 17,311 19,479 41,487 33,096 46,549 Total assets 47,793 38,808 52,125 Current liabilitiesTrade and other payables (9,601) (8,394) (9,763)Financial liabilities - - (170)Current tax liabilities (912) (856) (1,164)Other liabilities (23,475) (14,289) (23,605) (33,988) (23,539) (34,702)Net current assets 7,499 9,557 11,847Non-current liabilitiesDeferred tax liability (75) (266) (76) (75) (266) (76) Total liabilities (34,063) (23,805) (34,778) Net assets 13,730 15,003 17,347EquityShare capital 509 497 499Share premium account 4,294 3,350 3,475Hedging reserve - 5 -Translation reserve 162 (237) (289)Share option reserve 419 396 454Retained earnings 8,346 10,746 13,023Equity attributable to equity holders of the 5 13,730 14,757 17,162parentMinority equity interest - 246 185 Total equity 13,730 15,003 17,347 Unaudited condensed consolidated cash flow statementfor the six months ended 31 January 2008 Half year to Half year to Year to 31 January 31 January 31 July 2008 2007 2007 (unaudited) (unaudited) (audited) Note £'000 £'000 £'000 Net cash from operating activities 6 2,176 10,036 12,097Investing activitiesInterest received 422 261 668Proceeds on disposal of property, plant and equipment - 1,611 1,638Acquisition of subsidiaries (net of cash acquired) (957) (5,094) (2,104)Purchases of property, plant and equipment (181) (771) (968)Net cash (used in)/generated by investing activities (716) (3,993) (766)Financing activitiesDividends paid (7,468) (1,370) (2,030)Decrease in bank loans - - (2,533)Proceeds on issue of shares 829 782 910Net cash used in financing activities (6,639) (588) (3,653)Net (decrease)/increase in cash and cash equivalents (5,179) 5,455 7,678Opening cash and cash equivalents 19,479 11,931 11,931Effect of foreign exchange rate changes 49 (75) (130)Closing cash and cash equivalents 14,349 17,311 19,479 Reconciliation of net cash flow to movement net fundsfor the six months ended 31 January 2007 Half year to Half year to Year to 31 January 31 January 31 July 2008 2007 2007 (unaudited) (unaudited) (audited) Note £'000 £'000 £'000 (Decrease)/increase in cash in the year (5,179) 5,455 7,678Effect of foreign exchange rate changes 49 (75) (130)Movement in net funds during the period (5,130) 5,380 7,548Opening net funds 19,479 11,931 11,931Closing net funds 14,349 17,311 19,479 Selected notes to the condensed consolidated interim financial information 1 Interim statement Basis of preparation This unaudited condensed interim financial information for the half year ended31 January 2008 has been prepared in accordance with IAS 34, 'Interim financialreporting'. The interim condensed financial report should be read inconjunction with the annual financial statements for the year ended 31 July2007. The accounting policies adopted are consistent with those of the annualfinancial statements for the year ended 31 July 2007, as described in the annualfinancial statements for the year ended 31 July 2007. The financial information contained in this document does not constitutestatutory accounts as defined in Section 240 of the Companies Act 1985. The auditors have issued an unqualified opinion on the Group's statutory financial statements under International Financial Reporting Standards for the year ended 31 July 2007, which have been filed with the Registrar of Companies. 2 Segmental analysis Half year to Half year to Year to 31 January 31 January 31 July 2008 2007 2007 (unaudited) (unaudited) (audited) £'000 £'000 £'000Geographical segment - revenueUnited Kingdom 65,152 51,803 107,935Europe 33,827 26,181 57,970United States of America 8,374 8,054 16,041Rest of the World 2,013 4,270 3,834 109,366 90,308 185,780 Geographical segment - resultUnited Kingdom 2,496 1,888 4,324Europe 598 575 1,313United States of America 299 334 856Rest of the World 69 406 454 3,462 3,203 6,947 Finance income 422 261 668Finance costs (3) - (9)Profit before tax 3,881 3,464 7,606Income tax expense (1,297) (1,093) (2,511) Profit for the period 2,584 2,371 5,095 Business segment - revenuePrivate jets 26,405 23,711 55,282Commercial jets 73,290 57,253 117,525Freight 8,697 6,262 10,527Other 974 3,082 2,446 109,366 90,308 185,780 Business segment - resultPrivate jets 1,027 938 2,783Commercial jets 2,106 1,941 3,717Freight 280 59 120Other 49 265 327 3,462 3,203 6,947 Finance income 422 261 668Finance costs (3) - (9)Profit before tax 3,881 3,464 7,606 Income tax expense (1,297) (1,093) (2,511) Profit for the period 2,584 2,371 5,095 3 Dividends Half year to Half year to Year to 31 January 31 January 31 July 2008 2007 2007 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Interim dividend for year ending 31 July 2007 of 6.7p per share - - 666Final dividend for year ending 31 July 2007 of 13.3p (2006: 12.1p) per share 1,355 1,200 1,200Special dividend for year ending 31 July 2007 of 60p per share 6,113 - - 7,468 1,200 1,866 The final and special dividend for the year ended 31 July 2007 was paid on 5 December 2007. The proposed 2008 interim dividend of 7.4p per share was approved by the Boardon 5 March 2008 and in accordance with IFRS has not been included as a deductionfrom equity at 31 January 2008. The dividend will be paid on 16 May 2008 tothose shareholders on the register at the close of business on 18 April 2008.The ordinary shares will be marked ex-dividend on 16 April 2008. 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 2008 2007 2007 (unaudited) (unaudited) (audited) £'000 £'000 £'000 EarningsEarnings for the purposes of basic earnings per share being net profit attributable to equity holders of the parent 2,584 2,301 5,089Earnings for the purposes of diluted earnings per share 2,584 2,301 5,089 Number of shares Weighted average number of ordinary shares for the purposes of basic earnings per share 10,087,454 9,800,486 9,818,736 Effect of dilutive potential ordinary shares 213,296 198,440 296,161 Weighted average number of ordinary shares for the purposes of diluted earnings per share 10,300,750 9,998,926 10,114,897 5 Group statement of changes in equity Share Share Share premium option Translation Retained Minority Total capital account reserve reserve earnings interest equity £'000 £'000 £'000 £'000 £'000 £'000 £'000 Opening equity as at 1 August 2007 499 3,475 454 (289) 13,023 185 17,347 Exchange differences on translation of foreignoperations - - - 451 - - 451 Net income recognised directly in equity - - - 451 - - 451 Profit for the period - - - - 2,584 - 2,584 Share option movement for period - - 172 - - - 172 Total recognised income and expense for the period - - 172 - 2,584 - 2,756 Issue of shares under share option scheme 10 819 (207) - 207 - 829 Purchase of minority interest - - - - - (185) (185) Dividends - - - (7,468) - (7,468) Closing equity as at 31 January 2008 509 4,294 419 162 8,346 - 13,730 During October 2007 212,900 new shares were issued following exercise of staffoptions under the Air Partner plc Company Share Option Plan 2003. 6 Net cash from operating activities Half year to Half year to Year to 31 January 31 January 31 July 2008 2007 2007 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Operating profit for the period 3,462 3,203 6,947Adjustments for:Depreciation and amortisation 225 181 458(Profit) on disposal of property, plant and equipment - (105) (78)Movement on financial (asset)/liability (386) 33 198Share option cost for period 172 106 213 Operating cash flows before movements in working capital 3,473 3,418 7,738Decrease/(increase) in receivables 124 10,817 (522)Decrease in inventories 24 - 54Increase/(decrease) in payables 96 (3,046) 6,979 Cash generated from operations 3,717 11,189 14,249Income taxes paid (1,538) (1,153) (2,143)Interest paid (3) - (9) Net cash from operating activities 2,176 10,036 12,097 7 Tax Half year to Half year to Year to 31 January 31 January 31 July 2008 2007 2007 (unaudited) (unaudited) (audited) £'000 £'000 £'000Current tax:UK corporation tax 850 728 1,636Foreign tax 443 407 969 1,293 1,135 2,605Deferred tax 4 (42) (94) 1,297 1,093 2,511 Income tax for the interim period is charged at 33.4% (2007: 31.5%),representing the best estimate of the weighted average income tax expected forthe full financial year. 8 Acquisitions and disposals On 4 September 2007 the Group purchased the 45% minority interest in Air PartnerInternational SAS for a consideration of €1.38m (£931,000) and as a result thereis no longer any minority owned investments within the Group. The assessment ofthe fair value of assets acquired is still in progress and therefore goodwill recognised in theperiod on the acquisition represents the difference between consideration paidand the book value of assets acquired. Advisors Secretary and registered office Stephanie WhitePlatinum House, Gatwick RoadCrawley, West Sussex RH10 9RP Stockbrokers Oriel Securities Limited125 Wood StreetLondon EC2V 7AN Auditor Mazars LLPChartered Accountants and Registered AuditorsTower Bridge HouseSt Katharine's WayLondon E1W 1DD Solicitors Travers Smith10 Snow HillLondon EC1A 2AL Principal bankers NatWest Bank PLC16 The BoulevardCrawley, West Sussex RH10 1XU Registrars Capita IRG PlcThe Registry, 34 Beckenham RoadBeckenham, Kent BR3 4TU Financial PR advisor Temple Bar Advisory60 Cannon StreetLondon EC4N 6JP Registered number980675 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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