TIDMGMAA
RNS Number : 6007T
Gama Aviation PLC
09 January 2017
9 January 2017
Gama Aviation Plc (AIM: GMAA)
Full Year Trading Update
Good performance in line with expectations
In advance of its full year results, Gama Aviation Plc ("Gama
Aviation"), the global business aviation services provider, today
provides an update on trading for the financial year ended 31
December 2016.
Gama Aviation will release its audited results for its financial
year ended 31 December 2016 on 27 March 2017.
Highlights
Ø Strong revenue growth of over 10% year on year
Ø Earnings in line with market expectations
Ø Improving European business performance
Ø 12% increase in the number of aircraft under management
Group Performance
Total group revenues for the year, on a constant currency basis,
increased by over 10% compared with 2015. This growth was primarily
organic and based on a strong overall performance, especially in
the second half of the year, with aircraft under management up 12%
to 165 (2015: 147).
Adjusted earnings, which exclude exceptional items and
amortisation, on a constant currency basis, are in line with market
expectations. Earnings also exclude a material foreign exchange
credit, which resulted from the unusually volatile currency
fluctuations during the year. The full year results will be
reported at the annual average exchange rate of 1.35 USD to the
pound sterling.
Regional Performance
US
Trading in the US Aircraft Management business (US Air) remained
very robust, delivering strong organic revenue growth of over 20%
compared with 2015. Modest margin improvement was also achieved
during the year.
US Ground performed well, delivering organic revenue growth of
over 10%. Three new bases were added during the year taking the
total number of bases to nine. Whilst revenue builds up at the new
bases established during 2015 and 2016, margins have been held
back. Further new bases are planned for 2017 to complement the
national coverage of our enlarged aircraft management business.
The combination of our aircraft management business with BBA
Aviation provides a strong platform for the development of both our
US Air and Ground activities and will enable us to build on the
strong performances achieved in the current year.
Europe
Europe Air continued its steady recovery, despite challenging
market conditions, following the actions taken by management in
late 2015. Primarily due to the termination of underperforming
contracts during 2016, revenues for the year decreased by
approximately 15%, on a constant currency basis. However, following
the actions taken to reduce the cost base and the continued focus
on operational efficiencies, margins have shown a strong
improvement through the year. This improvement was achieved despite
a transactional foreign exchange cost of approximately $1 million
arising from the unusually volatile currency fluctuations during
the year.
Europe Ground delivered modest single digit revenue growth with
new business wins offsetting a generally subdued market
environment. Healthy and sustainable margins were maintained
throughout the year.
The acquisitions of Aviation Beauport in Europe Ground and Flyer
Tech in Europe Air are integrating well and have begun to deliver
on the anticipated benefits.
We are also pleased to have announced two significant contract
awards following competitive tenders. The first is a new three year
contract for our Europe Ground business to maintain the fixed wing
fleet of the National Police Air Service and the second is a five
year contract renewal to manage and pilot a UK aerial survey
platform.
The European market is expected to remain challenging during
2017 with little overall growth. However, with new contract wins,
more tenders in process and a healthy pipeline, our European
business is well-positioned and well-equipped to gain market share
and deliver organic revenue growth. These factors, combined with
ongoing proactive management of the cost base, should deliver a
margin improvement during 2017.
Middle East
The Middle Eastern operations continued to make good progress
with the addition of two aircraft during the last quarter, bringing
the total aircraft under management to nine. Another aircraft is
contracted and will enter service in the early part of 2017. These
additional aircraft bring much needed charter capacity into the low
inventory, midsize category within the region.
On the ground, our Sharjah Airport FBO continues to attract new
customers and increase its line and base maintenance coverage. With
fleet growth coming late in 2016, revenues remained flat over the
period but are expected to grow in 2017 along with continuing
improvements in margins. Importantly, this region is now generating
sufficient cash to meet its operating expenditure requirements.
Preparations for the development of our new 100,000 square foot
business aviation facility at Sharjah Airport are progressing well.
The facility will provide much needed hangar and maintenance
infrastructure to the region and attract increased fixed-base
operator traffic, line and base maintenance.
Asia
During 2016, we re-organised and consolidated the infrastructure
and operational capabilities of our regional aircraft management
business based in Hong Kong. With minimal aircraft sale and
purchase activity in the region over the period, the opportunity to
grow our managed fleet was limited. However, there are some
encouraging signs of renewed activity in the market and this is
reflected in an improving pipeline.
Plans to launch our line maintenance operations in the region
remain on track and we expect to be generating revenues from ground
operations during the course of 2017.
Marwan Khalek, Chief Executive Officer commented:
"This has been a busy and productive year for Gama Aviation. We
have targeted and delivered organic growth and operational
efficiencies despite challenging markets in some regions. We have
also been actively developing the group's strategic capabilities
across all regions through acquisitions, capital expenditure and
partnerships. The recent combination of our US Aircraft management
business with BBA Aviation is a clear demonstration of our
determination to build scale into our business in ways that add
value to our shareholders."
Ends
For further information please visit www.gamaaviation.com or
contact:
Gama Aviation Plc +44 (0) 1252 553000
Marwan Khalek, Chief Executive Officer
Kevin Godley, Chief Financial Officer
Camarco +44 (0) 20 3757 4992
Ginny Pulbrook
Geoffrey Pelham-Lane
Jefferies International +44 (0) 207 029 8000
Simon Hardy
Harry Nicholas
Gama Aviation - Notes to Editors
Gama Aviation (GMAA) is a global business aviation services
company that specialises in providing support for individuals,
corporations and government agencies. Gama Aviation is now one of
the top three global players in a highly fragmented market, with a
fleet of over 250aircraft. Gama operates across Europe, the US, the
Middle East, Asia and Africa.
Gama's services can be split into two broad areas: Air and
Ground. The Air Operations include aircraft management, special
mission and charters, with Ground Services covering aircraft
maintenance services, aircraft modification design and installation
and Fixed Base operations.
http://www.gamaaviation.com/
This information is provided by RNS
The company news service from the London Stock Exchange
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