Source - RNS
RNS Number : 1424L
Air Partner PLC
29 September 2016
 

29 September 2016

 

 

Air Partner plc

 

Interim results for the six months ended 31 July 2016

 

Air Partner delivers strong first half trading results with Broking and Consulting divisions both performing well

 

Air Partner plc ("Air Partner" or "Group"), the global aviation services group, today reports results for the six months to 31 July 2016.

 

 

July 2016

July 2015

Change (%)

Gross Transaction Value

£112.9m

£110.2m

2.4

Gross Profit

£16.1m

£12.1m

33.8

Underlying§ profit before tax

£3.0m

£2.2m

34.7

Statutory profit before tax

£2.6m

£1.9m

38.8

Cash (including JetCard)

£24.6m

£15.0m

64.2

Net Cash (excluding JetCard)

£5.2m

£1.4m

273.5

Underlying basic EPS

22.3p

17.1p

30.4

Basic continuing EPS

18.8p

14.4p

30.6

Interim dividend

8.06p

7.33p

10.0

 

§ - Underlying results are stated after other items as defined by note 2(k) (page 94) to the financial statements for the year ended 31 January 2016

 

Financial Highlights:

·     Gross profit of £16.1m, a year-on-year increase of 34%, reflecting strong trading performance and contribution from Baines Simmons

·      Underlying PBT of £3.0m, a year-on-year increase of 35% with Broking and Consulting performing well

Commercial Jets delivered underlying operating profit growth of 18%

Private Jets achieved record H1 results

Consulting division integrated and contributed underlying profit of £0.3m

·      Underlying EPS of 22.3p, a year-on-year increase of 30%

·      Net cash inflow from operating activities of £5.1m, compared to outflow of £1.2m in prior period

·      Net cash (non-JetCard cash less debt), of £5.2m compared to net debt of £0.5m at year end

·      Interim dividend increased 10% to 8.06p per share payable on 28 October 2016

 

Operating Highlights:

Broking

·      Commercial Jets:

Significant sport contracts won for Euros and pre-season Premier League tours, including Leicester City and Manchester City

Cabot Aviation remarketed two Boeing 777s for Kenya Airways

·      Private Jets:

Exceptional UK performance, underlying operating profit up 56%

JetCard utilisation up by 25%

Record H1 JetCard results

 

Consulting:

·      Won 10 year Isle of Man aircraft registry contract

·      Won a number of long-term government and corporate contracts, including BAE Systems

 

Strategic Highlights & Outlook

·      Acquisitions fully integrated, performing well and contributed to strong H1 performance

·      Customer First programme rolled out globally and helped drive growth in Broking's underlying operating profit of 24%

·      New NED appointments further aligns industry and operational experience with Group strategy

·      Current trading is in line with expectations

 

Mark Briffa, CEO of Air Partner, commented: "The Group has performed well in our first six months and I am very pleased to have seen strong performances across both Broking and Consulting. Our customer focused approach is delivering results and this is evidenced by significant contract wins from both new and existing customers. We have entered the second half of the year with confidence and look forward to continuing to develop and grow our services and capabilities across the world."

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.

 

Air Partner

01293 844788

Mark Briffa, CEO

 

Neil Morris, CFO

 

 

 

Temple Bar Advisory (Financial PR advisor)

020 7002 1080

Tom Allison

07789 998 020

Ed Orlebar

 

Alycia MacAskill           

 

 

CHAIRMAN'S STATEMENT

 

Strong full year results

 

The Board is pleased to report a strong performance for the six months to 31 July 2016. Gross profit rose by 34% to £16.1m while underlying operating profit and underlying profit before tax increased by 36% and 35% respectively, reflecting the Group's strong trading performance. Reported pre-tax profit rose by 39% to £2.6m after a charge of £0.4m relating to amortisation of acquisition related intangibles and restructuring costs. This strong performance is reflected in the Group's underlying basic earnings per share increasing by 30% to 22.3p.

 

The strong performance resulted not only from improved trading in the Broking business, but also encouraging performances from our Consulting business, Baines Simmons and our remarketing business, Cabot Aviation. In our Broking division, there were outstanding performances in Private Jets, which increased its underlying operating profit by 56% to £1.5m (2015: £0.9m) and Commercial Jets, which increased its underlying operating profit to £2.0m (2015: £1.7m), despite not benefitting from a significant Oil & Gas contract that was completed in the comparative period.

 

The increase in non-JetCard cash of £7.0m to £8.4m was driven by the solid trading performance for the period, coupled with a working capital contribution, which relates to a major Oil & Gas contract that has now completed. Taking into account the £3.2m bank loan associated with the acquisition of Baines Simmons, our period end net cash was £5.2m, demonstrating the strength of the Group's balance sheet.

 

Strategy

 

Air Partner's strategy is to build a world class aviation services group which delivers tailored and comprehensive aviation solutions to our global customers. Where appropriate, we will acquire complementary capabilities and services that either add to or improve our customer offer, enabling us to leverage our existing global office network and enhance the quality and visibility of our earnings. It has been pleasing to see Cabot Aviation and Baines Simmons, both businesses acquired in 2015, generating positive contributions in this period, confirming our confidence that these businesses will thrive as part of the Air Partner Group. In line with our stated growth strategy, we continue to assess opportunities for investment, both organic and through acquisitions, which will improve the service offering to our clients across the world.

 

Dividend

 

As previously announced, the Board has determined that to pursue our acquisition strategy as well as invest in the future organic growth of the Group, the Company should continue to pay a progressive dividend while at the same time aiming to build cover to between 1.5 and 2.0 times underlying EPS.

 

Accordingly, the Board has proposed an interim dividend of 8.06p, a year-on-year increase of 10%. The interim dividend is expected to be paid on 28 October 2016 to those shareholders registered at close of business on 7 October 2016.

 

Board changes

 

Over the last 12 months we have proactively strengthened our Board with three new non-executive directors, further aligning our industry and operational experience to the needs of the Group's future direction and strategy. 

 

Richard Jackson joined the Air Partner Board in September having spent 11 years at the Civil Aviation Authority ("CAA") as Group Director of Consumer Protection. Amanda Wills CBE was appointed to the Board in April. She is a non-executive director of eDreams ODIGEO S.A. and former CEO of Virgin Holidays Travel Group.  Shaun Smith, Group Finance Director of Norcros plc and former Group Finance Director of Aga Rangemaster Group plc, joined the Board in May.

 

Outlook

 

Given the strong first half performance and current trading, the Board remains confident that its expectations for the remainder of the financial year will be achieved.

 

Richard Everitt, Chairman

 

 

CHIEF EXECUTIVE'S REVIEW

 

This has been a strong start to the year and our first half performance provides a solid platform for the remainder of the financial year.

 

The Group's underlying profit before tax has increased to £3.0m, a 35% increase on the prior period. This growth demonstrates the impact of our strategic initiatives, particularly our Customer First programme, which have helped deliver like-for-like growth in Broking of 24%, as well as the addition of Baines Simmons and Cabot Aviation to the Group.

 

 

BROKING

 

Commercial Jets

 

Gross profit in the period increased by 8% to £7.3m and underlying operating profit rose by 18% to £2.0m, with the increase driven by strong trading in the UK and in Europe, albeit with some continuing challenges in the US. Within the UK Commercial Jet team we increased our focus on developing a clearer sales strategy, invested in key talent, particularly in the Sports sector, and focused on improving the service levels we provide to our customer base. Success stories for the UK include a strong contribution from the Sports sector, with flights conducted for a number of Premier League football teams, continued success from our Oil & Gas clients, along with continued government work.

 

In Europe, growth has been driven through an increase in our tour operations programme, a notable achievement given the challenges faced in this sector during the year; the Sports sector, with flights for Euro 2016, football clubs and major cycling events; and continued successes in the automotive industry. Although H1 performance in the US was below our expectations, prospects for H2 look promising as a result of government and election related contracts.

 

Cabot Aviation, the Group's remarketing business, has had an encouraging start to the financial year, primarily through the successful remarketing of two Kenya Airways B777-200ERs to Omni International. This deal demonstrates the positive impact joining a larger Group has had on Cabot Aviation as being part of a larger, publicly listed group was instrumental in helping win the mandate in a competitive tender. Cabot Aviation continues to hold the mandate to remarket a further two B777-200ERs and two 737-700s on behalf of Kenya Airways together with a B787 for a cruise operator and two B747-400s for China Airlines. Cabot Aviation continues to review opportunities in other markets as it looks to enhance and extend its service offering globally within the Air Partner group.

 

Private Jets

 

Our Private Jet division comprises two distinct product offerings: JetCard, Air Partner's private jet card programme with transparent pricing and no hidden charges, and Ad hoc broking, our on-demand charter service.

 

The competitive advantage delivered through our Customer First programme, together with the first rate service delivered by our team of experts who are available 24/7 can be demonstrated through the record H1 performance, with gross profit in the period increasing by 17% to £5.1m and underlying operating profit up 56% to £1.5m. The increased profitability was largely driven by a very strong performance in the UK, a solid performance in Europe, with the US showing signs of improvement after a disappointing performance in the prior year.

 

For JetCard, there are a number of measurements which highlight its strong performance: JetCard cash deposits at 31 July 2016 stood at £16.1m, up on the prior year balance of £13.6m and the number of JetCards stood at 218, an increase of 9 since 31 January 2016. JetCard profit is not recognised until the client has flown hours and our focus has been to increase the number of cards and to improve the frequency of use, which is reflected in the utilisation rate which increased by an impressive 25% in the year. Overall, this performance is a great testament to our flexible card product which was verified by Conklin and de Decker in an independent study in April 2015 to be the most flexible product in the market.

 

Freight

 

Although Freight has benefited from a strong performance in automotive in Europe, this has not been enough to compensate for the lack of any government aid agency work this  period.  As a result gross profit was down 20% year-on-year to £0.8m and the underlying operating profit of £0.3m decreased by 23%. Despite this the division remains profitable and has carried out some excellent work in other client sectors.  Moreover, Freight continues to be a key component of Air Partner's aviation service proposition to ensure a full suite of aviation related products are offered to our client base. 

 

CONSULTING

 

Baines Simmons

 

Baines Simmons, which was acquired in August 2015, has made a promising start to the financial year, delivering gross profit of £3.0m, equivalent to 19% of the Group total. At an underlying operating profit level, Baines Simmons delivered a profit of £0.3m, equivalent to 10% of the Group total. There have been a number of contract wins during the period, including the renewal of the Isle of Man aircraft registry for a further ten years and the provision of in-house training at BAE Systems, focusing on the Typhoon aircraft.

 

Strategy

 

We have made significant progress against our strategy through investment, both organic and through acquisitions, which enhance or extend the services and capabilities we can provide to our clients across the world. Today, both Baines Simmons and Cabot Aviation are fully integrated into the Group and performing well. We are proud of the new contract wins achieved by both businesses and firmly believe that Air Partner's international reach and listed status have played an important role in supporting ‎this success.

 

People

 

I would like to express my sincere thanks to all of my colleagues across the Group for the hard work, dedication and commitment that they continue to show. I am proud of our people and the excellent service that they deliver to our customers day in and day out across the globe.

 

Our people are critical to the success of Air Partner and we will continue to invest in the recruitment of the best and most professional people in our industry, and provide the training and IT support that enables us to deliver excellent customer service and the best possible solutions to customers.

 

Outlook

 

The Board remains optimistic about the Group's prospects for the remainder of the year and the trading performance since the period end is in line with our expectations. So far the Group has not noted any adverse impact on trade as a result of the EU referendum but continues to monitor the situation closely. While we are mindful of this issue and other uncertainties inherent in our industry, the current momentum and our clear strategic direction, coupled with the enthusiasm and the dedication of our people, gives the Board optimism for the remainder of the financial year.  

 

Mark Briffa, Chief Executive Officer

 

 

FINANCIAL REVIEW

 

 

Financial position

 

The total cash balance of £24.6m has increased from the prior year comparative of £15.0m, driven by an increase in JetCard deposits over the period to £16.1m from £13.6m in the previous year and an increase in non-JetCard cash to £8.4m from £1.4m. The increase in non-JetCard cash was driven by a positive inflow from operating items together with the unwinding of working capital absorbed by a major contract with a credit customer and favourable foreign exchange gains arising from the weakening of sterling against the US dollar and the euro.

 

Our gross debt at the year-end totalled £3.2m and has reduced from this position due to a scheduled repayment made during the period.

 

The Group's net cash, excluding JetCard cash, stood at £5.2m, compared to net debt of £0.5m at the year end and demonstrates the strength of our balance sheet.

 

Foreign Exchange

 

As a result of the EU referendum, foreign exchange rates have been extremely volatile in recent months with sterling falling sharply against both the US dollar and euro. However, given that the Group maintains a net asset position in these currencies and profits are generated in its international offices, the Group has not suffered an adverse impact from these movements. In addition, JetCard and Cabot Aviation revenues within the UK are denominated primarily in euro and US dollars respectively, which provides a further upside as a result of the weakening of sterling.

 

Where possible the Group uses natural hedging to minimise its foreign exchange exposure, for example matching JetCard deposits denominated in euro with the respective deferred income. The net foreign exchange gain for the period was £92k (2015: £42k gain).

 

The Group also uses derivative financial instruments to hedge certain transactions in accordance with its internal policy. The fair value of these instruments at the balance sheet date was a liability of £5k (2015: £292k) and the loss recognised through the income statement as a result of the change in fair value since 31 January 2016 was £41k (2015: £142k).

 

Taxation

 

The underlying effective tax rate for the period stood at 25% (2015: 23%) and is higher than the statutory rate of tax due to the impact of international tax rates. 

 

Other items

 

Other items of £0.4m (2015: £0.3m) include amortisation of acquisition related intangible assets of £0.2m with the remainder being restructuring costs. Other items in the prior period comprise acquisition costs of £0.3m.

 

 

Neil Morris, Chief Financial Officer

 

Forward-looking statements

 

Announcements issued by Air Partner plc may contain forward looking statements, indicated by words such as "aims", "believes," "expects", "intends," and similar expressions. These statements reflect current views and expectations up to the date of approval of this statement and are made in good faith by the directors. Unless otherwise required by laws, regulations or changes in accounting standards, Air Partner accepts no obligation to update these statements as a result of future events or new information subsequently obtained. New announcements will be made to the market as required under the Disclosure and Transparency Rules.

 

Trends and factors affecting the business

 

Air Partner's lead times for ad hoc bookings are measured in days or weeks, rather than months and future revenues cannot be predicted with any certainty. Forward bookings can be impacted very suddenly by changes in financial markets, political instability and natural events affecting the movement of people or cargo from one country to another. Lead times in the Remarketing business can be up to one year and therefore forecasting when a particular contract may be realised is not easy to predict. Economic uncertainty affects corporate, government and individual clients and affects the quality of supply of aircraft as operators consolidate or leave the market. These trends are outside the Group's control but the strategy remains to diversify to address seasonality and broaden the client mix.

 

Principal risks and uncertainties facing the Group

 

Aircraft charter broking, remarketing and consultancy can be classed as a relatively low financial risk business, in that the business sells capacity on aircraft owned and operated by a third party and contracts are normally placed as mirrored transactions, or remarkets aircraft on behalf of a third party. The Group does not have any contractual arrangements with any significant individual or company which are essential to continuation of the business. The Board reviews risks which may have a significant impact on the Group, including operational aviation related risks (quality and quantity of supply, adverse weather conditions, competitive pricing pressure and regulatory changes) and financial risks such as foreign exchange and interest rate fluctuations, credit risk and liquidity and cash flow management. The profile of both financial and operational risks varies from time to time but the current level of risk is not substantially different from that as at 31 January 2016, as described in the principal risks and uncertainties section of the annual report. The principal risk to the Group's business remains the degree to which clients' available financial resources and the general economic conditions in which they operate affect their willingness to charter. The Group recognises that ad hoc charters are likely to continue to be impacted by changes, both positive and negative, in the macro-economic climate.

 

Related party transactions

 

There has been no significant change in the level of transactions between Air Partner plc and its subsidiaries since that disclosed in the annual report for the year ended 31 January 2016. Such transactions did not materially affect the financial position or performance of the Group in the period under review. There are no other related party transactions which are required to be disclosed under DTR 4.2.8R.

 

Going concern

 

After making enquiries, the directors are satisfied that the Group and the Company have adequate resources to continue in business for the foreseeable future.  The directors have therefore continued to adopt the going concern basis in the preparation of these financial statements.

 

Directors' responsibility statement

 

The interim report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

 

As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The unaudited condensed consolidated financial statements included in this interim report have been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" as adopted by the European Union.

 

 

 

Mark Briffa

Neil Morris

Chief Executive Officer

Chief Financial Officer

28 September 2016

28 September 2016

 

The directors of Air Partner plc are listed in the Group's Annual Report and Accounts for the year ended 31 January 2016 and on our website at www.airpartner.com.

 

See more at: http://www.airpartner.com/en/investors.

 

Enquiries

 

Air Partner

01293 844788

Mark Briffa, CEO

 

Neil Morris, CFO

 

 

 

Temple Bar Advisory (Financial PR advisor)

020 7002 1080

Tom Allison

07789 998 020

Ed Orlebar

 

Alycia MacAskill           

 

 

About Air Partner:

Founded in 1961, Air Partner is a global aviation services group that provides worldwide solutions to industry, commerce, governments and private individuals. The Group has two divisions‎: (a) Broking division, comprising air charter broking and remarketing through the Air Partner and Cabot Aviation brands respectively; and (b) Consulting division, via the aviation safety consultancy Baines Simmons. For reporting purposes, the Group is structured into four divisions: Commercial Jets, Private Jets, Freight (Broking) and Baines Simmons (Consulting). The Commercial Jet division charters large airliners to move groups of any size. Cabot Aviation, which is formed within the Commercial Jet division, provides comprehensive remarketing programmes for all types of commercial and corporate aircraft to a wide range of international clients. Private Jets offers the company's unique pre-paid JetCard scheme and on-demand charter. Air Partner Freight charters aircraft of every size to fly almost any cargo anywhere, at any time. Baines Simmons is a world leader in Aviation Safety Consulting which specialises in aviation regulation, compliance and safety management. Air Partner is headquartered alongside Gatwick airport in the UK. Air Partner operates 24/7 year-round and has 20 offices globally. Air Partner is listed on the London Stock Exchange (AIR) and is also ISO 9001:2008 compliant for commercial airline and private jet solutions worldwide. www.airpartner.com

 

Consolidated income statement

for the half year ended 31 July 2016 (unaudited)

 

 

 

Half year ended 31 July 2016

Half year ended 31 July 2015

Year ended 31 January 2016

Continuing operations

Note

Underlying*

£'000

Other items

£'000

Total

£'000

Underlying*

£'000

Other items

£'000

Total

£'000

Underlying*

£'000

Other items

£'000

Total

£'000

Gross transaction value (GTV)

 

112,922

-

112,922

110,226

-

110,226

210,752

-

210,752

Revenue

 

22,230

-

22,230

22,150

-

22,150

49,942

-

49,942

Gross profit

2

16,141

-

16,141

12,066

-

12,066

27,269

-

27,269

Administrative expenses

 

(13,087)

(385)

(13,472)

(9,825)

(342)

(10,167)

(22,883)

(1,178)

(24,061)

Operating profit

2

3,054

(385)

2,669

2,241

(342)

1,899

4,386

(1,178)

3,208

Finance income

 

8

-

8

3

-

3

10

-

10

Finance expense

 

(49)

-

(49)

(8)

-

(8)

(81)

-

(81)

Profit before tax

 

3,013

(385)

2,628

2,236

(342)

1,894

4,315

(1,178)

3,137

Taxation

8

(745)

32

(713)

(511)

67

(444)

(1,311)

81

(1,230)

Profit for the period from continuing operations

 

2,268

(353)

1,915

1,725

(275)

1,450

3,004

(1,097)

1,907

 

 

 

 

 

 

 

 

 

 

 

Discontinued operations

 

 

 

 

 

 

 

 

 

 

Profit for the period from discontinued operations

 

-

-

-

-

-

-

387

-

387

Profit for the period

 

2,268

(353)

1,915

1,725

(275)

1,450

3,391

(1,097)

2,294

Attributable to:

 

 

 

 

 

 

 

 

 

 

Owners of the parent company

 

2,268

(353)

1,915

1,725

(275)

1,450

3,391

(1,097)

2,294

Earnings/(loss) per share:

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

 

 

 

 

 

 

 

 

 

Basic

5

22.3p

(3.5)p

18.8p

17.1p

(2.7)p

14.4p

29.7p

(10.8)p

18.8p

Diluted

5

22.2p

(3.5)p

18.7p

17.0p

(2.7)p

14.3p

29.5p

(10.8)p

18.7p

Discontinued operations

 

 

 

 

 

 

 

 

 

 

Basic

5

-

-

-

-

-

-

3.8p

-

3.8p

Diluted

5

-

-

-

-

-

-

3.8p

-

3.8p

Continuing and discontinued operations

 

 

 

 

 

 

 

 

 

 

Basic

5

22.3p

(3.5)p

18.8p

17.1p

(2.7)p

14.4p

33.5p

(10.8)p

22.6p

Diluted

5

22.2p

(3.5)p

18.7p

17.0p

(2.7)p

14.3p

33.3p

(10.8)p

22.5p

 

*Before other items (see note 3)

 

Consolidated statement of comprehensive income

for the half year ended 31 July 2016 (unaudited)

 

 

 

Half year ended
31 July 2016

£'000

Profit for the period

1,915

1,450

2,294

Other comprehensive income - items that may subsequently be reclassified to profit or loss:

 

 

 

Exchange differences on translation of foreign operations

254

(231)

(29)

Total comprehensive income for the period

2,169

Attributable to:

 

 

 

Owners of the parent company

2,169

1,219

2,265

 

 

 

Consolidated statement of changes in equity

for the half year ended 31 July 2016 (unaudited)

 

 

 

 

Share

capital

£'000

Share

premium

account

£'000

Merger Reserve

£'000

 

Own

shares

£'000

 

Translation

reserve

£'000

Share

option

reserve

£'000

 

Retained

earnings

£'000

 

Total

equity

£'000

Opening equity as at 1 February 2015

513

4,518

-

(1,051)

1,093

1,485

6,753

13,311

Profit for the period

-

-

-

-

-

-

1,450

1,450

Exchange differences on translation of foreign operations

-

-

-

-

(231)

-

-

(231)

Total comprehensive income for the period

-

-

-

-

(231)

-

1,450

1,219

Issue of shares

9

296

295

(300)

-

-

-

300

Share option movement for the period

-

-

-

-

-

52

-

52

Share options exercised during the period

-

-

-

152

-

-

(67)

85

Dividends paid (note 4)

-

-

-

-

-

-

(1,578)

(1,578)

Closing equity as at 31 July 2015

522

4,814

295

(1,199)

862

1,537

6,558

13,389

 

 

 

Share

capital

£'000

Share

premium

account

£'000

Merger Reserve

£'000

 

Own

shares

£'000

 

Translation

reserve

£'000

Share

option

reserve

£'000

 

Retained

earnings

£'000

 

Total

equity

£'000

Opening equity as at 1 February 2016

522

4,814

295

(1,199)

1,064

1,708

6,650

13,854

Profit for the period

-

-

-

-

-

-

1,915

1,915

Exchange differences on translation of foreign operations

-

-

-

-

254

-

-

254

Total comprehensive income for the period

-

-

-

-

254

-

1,915

2,169

Share option movement for the period

-

-

-

-

-

122

-

122

Issue of shares

-

-

-

60

-

(60)

-

-

Share options exercised during the period

-

-

-

110

-

-

(45)

65

Dividends paid (note 4)

-

-

-

-

-

-

(1,741)

(1,741)

Closing equity as at 31 July 2016

522

4,814

295

(1,029)

1,318

1,770

6,779

14,469

 

Consolidated statement of financial position

as at 31 July 2016

 

 

Note

31 July

2016

(unaudited)

£'000

31 July

2015

(unaudited)

£'000

31 January

2016

(audited)

£'000

Assets

 

 

 

 

Non-current assets

 

 

 

 

Goodwill

6

3,440

1,500

3,346

Other intangible assets

 

4,825

1,361

5,038

Property, plant and equipment

 

1,140

1,155

1,281

Deferred tax assets

 

524

256

143

 

 

9,929

4,272

9,808

Current assets

 

 

 

 

Trade and other receivables

 

34,191

41,829

23,708

Current tax assets

 

399

985

438

Restricted bank balances

 

2,434

2,454

2,840

Other cash and cash equivalents

 

22,121

12,500

16,951

Total cash and cash equivalents

 

24,555

14,954

19,791

Derivative financial instruments

 

-

-

36

 

 

59,145

57,768

43,973

Total assets

 

69,074

62,040

53,781

Current liabilities

 

 

 

 

Trade and other payables

 

(6,564)

(8,744)

(3,911)

Current tax liabilities

 

(466)

(199)

(133)

Other liabilities

 

(5,241)

(5,400)

(5,633)

Borrowings

 

(514)

-

(514)

Deferred income

 

(38,242)

(33,509)

(25,807)

Provisions

 

-

(507)

(421)

Derivative financial instruments

 

(5)

(292)

-

 

 

(51,032)

(48,651)

(36,419)

Net current assets

 

8,113

9,117

7,554

Long term liabilities

 

 

 

 

Borrowings

 

(2,700)

-

(2,957)

Deferred tax liability

 

(873)

-

(551)

Total long term liabilities

 

(3,573)

-

(3,508)

Total liabilities

 

(54,605)

(48,651)

(39,927)

Net assets

 

14,469

13,389

13,854

Equity

 

 

 

 

Share capital

 

522

522

522

Share premium account

 

4,814

4,814

4,814

Merger Reserve

 

295

295

295

Own shares

 

(1,029)

(1,199)

(1,199)

Translation reserve

 

1,318

862

1,064

Share option reserve

 

1,770

1,537

1,708

Retained earnings

 

6,779

6,558

6,650

Total equity

 

14,469

13,389

13,854

 

Consolidated statement of cash flows

for the half year ended 31 July 2016 (unaudited)

 

 

 

 

 

Note

 Half year ended
31 July 2016

£'000

Half year ended
31 July 2015

£'000

Net cash inflow/(outflow) from operating activities

7

5,088

(1,216)

Investing activities

 

 

 

‒            Interest received

 

8

3

‒            Acquisition of subsidiary

 

-

(524)

‒            Purchases of property, plant and equipment

 

(22)

(114)

‒            Purchases of intangible assets

 

-

(35)

Net cash used in investing activities

 

(14)

(670)

Financing activities

 

 

 

‒            Dividends paid

 

(1,741)

(1,578)

‒            Proceeds on exercise of share options

 

65

85

‒            Repayment of borrowings

 

(257)

-

Net cash used in financing activities

 

(1,933)

(1,493)

Net increase/(decrease) in cash and cash equivalents

 

3,141

(3,379)

Opening cash and cash equivalents

 

19,791

18,794

Effect of foreign exchange rate changes

 

1,623

(461)

Closing cash and cash equivalents

 

24,555

14,954

JetCard cash

The closing cash and cash equivalents balance can be further analysed into 'JetCard cash' (being restricted and unrestricted cash received by the Group in respect of its JetCard product) and 'non-JetCard cash' as follows:

 

 

 

 

2016

£'000

2015

£'000

JetCard cash restricted in its use

2,434

2,454

Jetcard cash unrestricted in its use

13,715

11,110

Total JetCard cash

16,149

13,564

Non-JetCard cash

8,406

1,390

Cash and cash equivalents

24,555

14,954

1 GENERAL INFORMATION, BASIS OF PREPARATION AND ACCOUNTING POLICIES

 

General information

The Directors of Air Partner plc present their interim report and the unaudited condensed consolidated financial statements for the six months ended 31 July 2016.

The Company is a limited liability company incorporated and domiciled in England and Wales under registration number 00980675. The address of its registered office is 2 City Place, Beehive Ring Road, Gatwick, West Sussex, RH6 0PA. The Company is listed on the London Stock Exchange.

The Interim Financial Statements have been reviewed, but not audited, by Deloitte LLP and were approved by the Board of Directors on 28 September 2016.

The information for the six months ended 31 July 2016 does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. The Interim Financial Statements should be read in conjunction with the Annual Report and Financial Statements, for the year ended 31 January 2016, which were prepared in accordance with European Union endorsed International Financial Reporting Standards ("IFRS") and those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The Annual Report and Financial Statements for the year ended 31 January 2016 were approved by the Board of Directors on 27 April 2016 and delivered to the Registrar of Companies. The auditor's report on those financial statements was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498(2) or (3) of the Companies Act 2006.

Basis of preparation

This condensed financial information for the half year ended 31 July 2016 has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority and International Accounting Standard ("IAS") 34 "Interim Financial Reporting" as adopted by the European Union. These interim condensed financial statements are unaudited and should be read in conjunction with the annual financial statements for the year ended 31 January 2016.

Accounting policies

The accounting policies adopted are consistent with those of the annual financial statements for the year ended 31 January 2016.

Going concern

The Directors are, based on current financial projections, satisfied that the Group has sufficient resources to continue in operation for the foreseeable future, that is a period of at least 12 months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the Interim Financial Statements.

Key accounting estimates and judgments

The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. These estimates and associated assumptions are based on historical experience and various other factors believed to be reasonable under the circumstances. Actual results could differ from these estimates. These underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or future periods.

 

2 SEGMENTAL ANALYSIS

The services provided by the Group consist of chartering different types of aircraft and related aviation services.

The Group has four operating segments: Commercial Jet Broking, Private Jet Broking, Freight Broking and Baines Simmons. Cabot Aviation Services Limited's results are aggregated into Commercial Jet Broking.

Overheads, with the exception of Corporate costs, are allocated to the Group's operating segments in relation to operating activities.

Sales transactions between operating segments are carried out on an arm's length basis. All results, assets and liabilities reviewed by the Board (which is the chief operating decision maker) are prepared on a basis consistent with those that are reported in the financial statements.

The Board does not review gross transactional value, revenue, assets or liabilities at segmental level, therefore these items are not disclosed.

The segmental information, as provided to the Board on a monthly basis, is as follows:

Half year ended 31 July 2016

(unaudited)

Continuing operations

Commercial

Jet Broking

£'000

Private

Jet Broking

£'000

Freight

broking

£'000

Baines Simmons

£'000

Corporate

costs

£'000

 

Total

£'000

Segmental gross profit

7,278

5,122

751

2,990

-

16,141

Depreciation and amortisation

(90)

(63)

-

(42)

-

(195)

Underlying operating profit

2,027

1,464

306

275

(1,018)

3,054

Other items (see note 3)

(111)

-

-

(274)

-

(385)

Segment result

1,916

1,464

306

1

(1,018)

2,669

Finance income

 

 

 

 

 

8

Finance expense

 

 

 

 

 

(49)

Profit before tax

 

 

 

 

 

2,628

Tax

 

 

 

 

 

(713)

Profit after tax

 

 

 

 

 

1,915

 

Half year ended 31 July 2015
(unaudited)

Continuing operations

Commercial

Jet Broking

£'000

Private

Jet Broking

£'000

Freight

broking

£'000

Baines Simmons

£'000

Corporate

costs

£'000

 

Total

£'000

Segmental gross profit

6,763

4,361

942

-

-

12,066

Depreciation and amortisation

(157)

(62)

-

-

-

(219)

Underlying operating profit

1,717

939

394

-

(809)

2,241

Other items (see note 3)

(72)

-

-

-

(270)

(342)

Segmental result

1,645

939

394

-

(1,079)

1,899

Finance income

 

 

 

 

 

3

Finance expense

 

 

 

 

 

(8)

Profit before tax

 

 

 

 

 

1,894

Tax

 

 

 

 

 

(444)

Profit after tax

 

 

 

 

 

1,450

 

Year ended 31 January 2016

 

Continuing operations

Commercial

Jet Broking

£'000

Private

Jet Broking

£'000

Freight

broking

£'000

Baines Simmons

£'000

Corporate

costs

£'000

 

Total

£'000

Segmental gross profit

14,005

9,361

1,857

2,046

-

27,269

Depreciation and amortisation

(339)

(186)

-

(6)

-

(531)

Impairment losses

(361)

-

-

(29)

-

(390)

Underlying operating profit

2,952

2,387

767

(99)

(1,621)

4,386

Other items (see note 3)

(436)

(261)

(44)

(437)

-

(1,178)

Segment result

2,516

2,126

723

(536)

(1,621)

3,208

Finance income

 

 

 

 

 

10

Finance expense

 

 

 

 

 

(81)

Profit before tax

 

 

 

 

 

3,137

Tax

 

 

 

 

 

(1,230)

Profit after tax

 

 

 

 

 

1,907

Discontinued operations

 

 

 

 

 

387

Profit for the year

 

 

 

 

 

2,294

 

The company is domiciled in the UK but due to the nature of the Group's operations, a significant amount of gross profit is derived from overseas countries. The Group reviews gross profit based upon location of the assets used to generate that gross profit. Apart from the UK, no single country is deemed to have material non-current asset levels other than goodwill in relation to the French operation.

The Board also reviews information on a geographical basis based on parts of the world which are considered to be key to operational activities. As a result, the following additional information is provided showing a geographical split of the United Kingdom, Europe, the United States of America and the Rest of the World:

Continuing operations

United

Kingdom

£'000

 

Europe

£'000

United States

of America

£'000

Rest of the

World

£'000

 

Total

£'000

Half year ended 31 July 2016 (unaudited)

 

 

 

 

 

Gross profit

10,286

4,274

1,511

70

16,141

Non-current assets (excluding deferred tax assets)

8,262

1,096

42

5

9,405

Half year ended 31 July 2015 (unaudited)

 

 

 

 

 

Gross profit

6,551

3,747

1,718

50

12,066

Non-current assets (excluding deferred tax assets)

3,009

948

53

6

4,016

Year ended 31 January 2016 (audited)

 

 

 

 

 

Gross profit

16,486

7,353

3,187

243

27,269

Non-current assets (excluding deferred tax assets)

8,616

995

48

6

9,665

 

Europe can be further analysed as:

Continuing operations

France

£'000

Germany

£'000

Italy

£'000

Other

£'000

Total

£'000

Half year ended 31 July 2016 (unaudited)

 

 

 

 

 

Gross profit

1,595

1,198

954

527

4,274

Half year ended 31 July 2015 (unaudited)

 

 

 

 

 

Gross profit

1,644

888

743

472

3,747

Year ended 31 January 2016 (audited)

 

 

 

 

 

Gross profit

2,730

2,306

1,491

826

7,353

 

 

3 OTHER ITEMS

Continuing operations

31 July

2016

(unaudited)

£'000

31 July

2015

(unaudited)

£'000

31 January

2016

(audited)

£'000

Restructuring costs

(161)

-

(419)

Amortisation of intangibles arising on acquisition

(171)

-

(242)

Acquisition costs

-

(342)

(419)

Acquisition consideration treated as an employee related share based payment cost under IFRS3 "Business Combinations"

(53)

-

(98)

 

(385)

(342)

(1,178)

Tax effect of other items

32

67

81

Other items after taxation

(353)

(275)

(1,097)

 

Restructuring costs in the current and prior period relate to changes in the management structure following the acquisitions made in the prior period.

 

4 DIVIDENDS

 

Half year to

31 July 2016

(unaudited)

£'000

Half year to

31 July 2015

(unaudited)

£'000

Amounts recognised as distributions to owners of the parent company

 

 

Final dividend for the year ended 31 January 2016 of 16.9 pence

 

 

(Final dividend the year ended 31 January 2015 of 15.4 pence) per share

1,741

1,578

 

5 EARNINGS PER SHARE

The calculation of the basic and diluted earnings per share is based on the following data:

 

Continuing and discontinued operations

31 July

2016

(unaudited)

£'000

31 July

2015

(unaudited)

£'000

31 January

2016

(audited)

£'000

Earnings for the calculation of basic and diluted earnings per share

 

 

 

Profit attributable to owners of the parent company

1,915

1,450

2,294

Adjustment to exclude other items

353

275

1,097

Underlying profit attributable to owners of the parent company

2,268

1,725

3,391

 

Number of shares

Number

Number

Number

Weighted average number of ordinary shares for the calculation of basic earnings per share

10,183,067

10,065,430

10,121,245

Effect of dilutive potential ordinary shares: share options

45,094

91,797

55,144

Weighted average number of ordinary shares for the calculation of diluted earnings per share

10,228,161

10,157,227

10,176,389

 

From continuing operations

31 July

2016

(unaudited)

£'000

31 July

2015

(unaudited)

£'000

31 January

2016

(audited)

£'000

Earnings

 

 

 

Profit attributable to owners of the parent company

1,915

1,450

2,294

Adjustment to exclude profit for the year from discontinued operations

-

-

(387)

Adjustment to exclude other items

353

275

1,097

Earnings for the calculation of underlying basic and diluted earnings per share

2,268

1,725

3,004

 

 

 

 

From discontinued operations

31 July

2016

(unaudited)

£'000

31 July

2015

(unaudited)

£'000

31 January

2016

(audited)

£'000

Earnings

 

 

 

Earnings for the calculation of discontinued basic and diluted earnings per share

-

-

387

 

The denominators used are the same as those above for both continuing and discontinued operations.

The calculation of underlying earnings per share (before other items) is included as the directors believe it provides a better understanding of the underlying performance of the Group. Other items are disclosed in note 3.

6 GOODWILL

 

£'000

Cost

 

At 1 February 2015

838

Recognised on acquisition of subsidiaries

701

Foreign currency adjustments

(39)

At 31 July 2015

1,500

 

 

At 1 February 2016

3,346

Foreign currency adjustments

94

At 31 July 2016

3,440

Provision for impairment

 

At 1 February 2015, 31 July 2015 and 31 July 2016

-

 

 

Net book value

 

At 31 July 2016

3,440

At 31 July 2015

1,500

At 31 January 2016

3,346


Goodwill acquired in a business combination is allocated, at acquisition, to the cash generating units (CGUs), or group of units that are expected to benefit from that business combination. Before recognition of impairment losses, the carrying amount of goodwill has been allocated as follows:

 

31 July

2016

£'000

    31 July

2015

£'000

Air Partner International S.A.S. (France)

942

799

Cabot Aviation Services Limited

787

701

Baines Simmons Limited (Training and Consulting)

1,072

-

Baines Simmons Limited (Managed Services)

639

-

 

3,440

1,500

 

The Group tests goodwill annually for impairment, or more frequently if there are indications that goodwill might be impaired. The directors do not believe that there are any reasonably possible changes to the key assumptions that would result in a material impairment of goodwill. 

7 NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES

 

 

 

 

Half year to

31 July 2016

£'000

Half year to

31 July 2015

£'000

 

 

 

Profit for the period

1,915

1,450

Adjustments for:

 

 

Finance income

(8)

(3)

Finance expense

49

8

Income tax expense

713

444

Depreciation and amortisation

419

219

Fair value losses on derivative financial instruments

41

142

Share option cost for period

122

52

Decrease in provisions

(421)

-

Foreign exchange differences

(937)

221

1,893

2,533

Decrease in receivables

(7,695)

(21,103)

Increase in payables

11,315

17,620

5,513

(950)

Income taxes paid

(376)

(258)

Interest paid

(49)

(8)

Net cash inflow/(outflow) from operating activities

5,088

(1,216)

 

8 TAXATION

 

 

 

Continuing operations

 

Discontinued operations

 

Total

 

Half year to 31 July 2016

(unaudited)

 £'000

Half year to 31 July 2015

(unaudited) £'000

Year ended 31 Jan 2016

(audited)

£'000

Half year to 31 July 2016

(unaudited)

 £'000

Half year to 31 July 2015

(unaudited) £'000

Year ended 31 Jan 2016

(audited)

£'000

Half year to 31 July 2016

(unaudited)

 £'000

Half year to 31 July 2015

(unaudited) £'000

Year ended 31 Jan 2016

(audited)

£'000

Current tax:

 

 

 

 

 

 

 

 

 

UK corporation tax

468

368

567

-

-

98

468

368

665

Foreign tax

280

68

488

-

-

-

280

68

488

Current tax adjustments in respect of prior years

-

30

345

-

-

-

-

30

345

 

748

466

1,400

-

-

98

748

466

1,498

Deferred tax

(35)

(22)

(170)

-

-

-

(35)

(22)

(170)

Total tax

713

444

1,230

-

-

98

713

444

1,328

Of which:

 

 

 

 

 

 

 

 

 

Tax on underlying profit

745

511

1,311

-

-

98

745

511

1,409

Tax on other items (see note 3)

(32)

(67)

(81)

-

-

-

(32)

(67)

(81)

 

713

444

1,230

-

-

98

713

444

1,328

 

 

9 PRIOR YEAR ACQUISITIONS

On 18 August 2015, Air Partner plc acquired 100% of the issued share capital of Baines Simmons Limited, obtaining control of the company on that date.  Baines Simmons Limited is a leading aviation safety consultant. Baines Simmons Limited will enable Air Partner to extend the Group's service and product capabilities with offerings complementary to its existing broking business.

At 31 January 2016 the purchase price allocation was provisional, the accounting in respect of the acquisition of Baines Simmons Limited has since been finalised. This resulted in adjustment to the value of intangibles recognised on acquisition, an increase in Customer relationships of £1.6m, and decreases in the value of the brand £0.04m and training materials £0.2m.

The amounts recognised in respect of the identifiable assets acquired and liabilities assumed on the acquisition of Baines Simmons are set out in the table below.

 

Baines Simmons Limited

 £'000

Fair values of assets acquired

 

Financial assets

1,490

Property, plant and equipment

191

Intangible assets - brands

158

Intangible assets - customer relationships

3,448

Intangible assets - training materials

415

Deferred tax on intangible assets

(780)

Financial liabilities

(983)

 

3,939

Goodwill

1,711

Total Consideration

5,650

Satisfied by

 

Cash

5,650

 

Net cash outflow arising on acquisition

 

Cash consideration

5,650

Less cash and cash equivalents acquired

(350)

Net cash outflow

5,300

 

INDEPENDENT REVIEW REPORT TO AIR PARTNER PLC

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 July 2016 which comprises the income statement, the statement of financial position, the statement of changes in equity, the cash flow statement and related notes 1 to 9. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board.  Our work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors.  The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union.  The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 July 2016 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

 

Deloitte LLP

Chartered Accountants and Statutory Auditor

Crawley, United Kingdom

28 September 2016

 

 

 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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