REG - Gama Aviation PLC - Interim Results
22/09/2023 07:30
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RNS Number : 3509N Gama Aviation PLC 22 September 2023
The information contained within this announcement is deemed to constitute
inside information as stipulated under Article 7 of the Market Abuse
Regulations (EU) No. 596/2014 as it forms part of UK domestic law by virtue of
the European Union (Withdrawal) Act 2018. Upon the publication of this
announcement, this inside information is now considered to be in the public
domain.
22 September 2023
Gama Aviation Plc (AIM: GMAA)
("Gama", "the Company" or "the Group")
Unaudited interim results for the six months to 30 June 2023
Continuing Progress in the Implementation of our Strategy in a Challenging
Economic Environment.
Gama Aviation Plc, the business aviation services company, is pleased to
announce its unaudited interim results for the six months to 30 June 2023.
Financial Summary
Adjusted(1) $m Statutory $m
Jun-23 Jun-22(3,4) Jun-23 Jun-22(3,4)
Unaudited Unaudited Unaudited Unaudited
Revenue 145.0 139.3 145.0 139.3
Gross profit(3) 27.6 26.7 27.6 26.7
Gross profit % 19.0% 19.2% 19.0% 19.2%
EBITDA(2) 7.9 9.2 6.4 6.3
EBIT 0.3 1.8 (1.8) (1.7)
Loss for the period (2.7) (0.8) (4.5) (3.8)
Basic and diluted loss per share (cents) (4.2) (1.6) (7.0) (6.4)
(1) The Alternative Performance Measures (APMs) are defined in Note 4 of the
notes to the financial statements and reconciled to the nearest IFRS measure.
APMs include Adjusted Revenue, Adjusted Gross Profit, Adjusted EBIT and Net
debt. APMs also include organic and constant currency Revenue, Gross Profit
and Adjusted EBIT
(2) Statutory EBITDA represents earnings before interest, tax, depreciation,
and amortisation. Adjusted EBITDA is Statutory EBITDA after Adjusting Items.
Adjusted EBITDA and Statutory EBITDA provide management and investors with
useful additional information about the Group's performance and profitability.
(3) Depreciation charges of $2,788,000 in the prior period, have been
reclassified from administrative expenses to cost of sales to conform with the
presentation in the Annual Report and Accounts 2022. This has resulted in a
reduction of $2,788,000 in gross profit.
(4) To aid comparability, a further version of the H1 2022 results has also
been calculated on a constant currency basis using a constant foreign exchange
rate of $1.23 to £1, being the cumulative average USD/GBP exchange rate for
2023, instead of the reported exchange rate of $1.30 to £1 for H1 2022. On a
constant currency basis H1 2022 Revenue is $136.0, Gross Profit is $26.1m,
Gross Profit percentage is 19.2%.
Financial Highlights
· Revenue growth of 4% (7% at constant currency) to $145.0m (H1
2022: $139.3m)
· Gross profit up 3% (6% at constant currency) to $27.6m (H1 2022:
$26.7m)
· Gross profit margin down by 0.2 percentage points ('ppt') at
19.0% (H1 2022: 19.2%)
· Adjusted earnings before interest and tax ('Adjusted EBIT') of
$0.3m (H1 2022: $1.8m)
· Adjusted EBIT includes foreign exchange losses of $0.3m (H1 2022:
$1.4m gain) $1.4m Statesville start-up costs, $1.1m Las Vegas restructuring
expenses and a gain of $2.6m for a legacy debtor recovery (HY22: one-off items
included a gain of $1.0m for release of PPP grant repayment provision,
recovery of $0.6m of branding fees and operating losses of $1.0m associated
with closure of FXE).
· Excluding foreign exchange gains and losses and one-off items,
adjusted EBIT is $0.5m (H1 2022: loss $0.2m)
· Net cash inflow from operating activities of $11.6m (H1 2022:
$15.5m)
· As at 30 June 2023 cash balances were $11.6m (FY 2022: $22.4m)
· Net debt, inclusive of $53.9 (FY 2022: $52.7) of lease
obligations, was $66.1m as at 30 June 2023 (FY 2022: $66.4m). Net bank debt
decreased by $12.3m to $22.5m (FY 2022: $34.8m)
· As at 21 September 2023, cash balances were $9.1m.
Outlook
The Group continues to make steady progress in the execution of its strategy.
Despite the strong growth in the US, the Group delivered modest revenue growth
overall during the period against the backdrop of a challenging economic and
business environment, but as expected, margins were impacted by inflationary
cost pressures. With little prospect of any significant change in the
macro-economic conditions coupled with the continuing geopolitical
uncertainties, the Board remains understandably cautious in its outlook for
the second half of the year.
However, continuing focus on optimising operational performance and
controlling costs is helping to mitigate the impact on margins whilst the
inflationary and adverse economic conditions persist in the UK and ensuring
the Group is well placed to restore and grow these margins when conditions
ease.
Commenting on the half year results, Marwan Khalek, Chief Executive said:
"The H1/23 results demonstrate the progress the Group continues to make in
consolidating and building upon the significant improvement in financial
performance that has been delivered over the last couple of years. This is the
result of our diligent implementation of our organic growth strategy and the
optimisation of our operational platform and cost base whilst continuing to
deliver our clients' mission.
These results, delivered against a backdrop of a very challenging economic and
business environment, again serve to illustrate the robustness and resilience
of our business, as well as the unwavering commitment and dedication of our
people to delivering our clients' mission.
Despite this uncertain economic backdrop, the pipeline of business
opportunities continues to grow, and the Group remains well positioned for the
future."
-ENDS-
For more information and persons responsible for arranging the release of this
announcement on behalf of the Company contact:
Gama Aviation Plc
+44 (0) 1252 553029
Marwan Khalek, Chief Executive Officer
Michael Williamson, Chief Financial Officer
Camarco
+44 (0) 20 3757 4992
Ginny Pulbrook
Geoffrey Pelham-Lane
WH Ireland
+44 (0) 20 7220 1666
James Joyce
Ben Good
Gama Aviation - Notes to Editors
Founded in 1983 with the simple purpose of providing aviation services that
equip its customers with decisive advantage, Gama Aviation Plc (LSE AIM: GMAA)
is a highly valued global partner to blue chip corporations, government
agencies, healthcare trusts and private individuals.
The Group has three global divisions: Business Aviation (Aircraft Management,
Charter, FBO & Maintenance), Special Mission (Air Ambulance & Rescue,
National Security & Policing, Infrastructure & Survey, Energy &
Offshore); and Technology & Outsourcing (Flight Operations, FBO, CAM
software, Flight Planning, CAM & ARC services).
More details can be found at: http://www.gamaaviation.com/
(http://www.gamaaviation.com/)
Chief Executive Officer's Statement
Introduction
The H1/23 results demonstrate the progress the Group continues to make in
consolidating and building upon the significant improvement in financial
performance that has been delivered over the last couple of years. This is the
result of our diligent implementation of our organic growth strategy, the
optimisation of our operational platform and cost base whilst continuing to
deliver our clients' mission.
This has been underpinned by significant organic investment in new facilities
in our US MRO business, the development of infrastructure for our recently
awarded Special Mission contracts that come on stream at the start of 2024 and
in our T&O SBU so as to ensure we maintain our leading technology
platforms for the future.
Over the last year or so, the Group has successfully secured alternative debt
for its maturing credit facilities allowing it to maintain the necessary
liquidity levels for its on-going operations. However, efforts to secure the
additional funding necessary to support the Group's hangar construction
projects are behind schedule due to the challenging credit markets.
These results, delivered against a backdrop of a very challenging economic and
business environment, again serve to illustrate the robustness and resilience
of our business. They are also testament to the efforts and dedication of
our people and their unwavering commitment to upholding our values, which
remains critical to retaining the trust and loyalty of our existing clients
and to the winning of new business.
Despite this uncertain economic backdrop, the pipeline of business
opportunities continues to grow, and the Group remains well positioned for the
future.
Strategic Business Unit Update
Business Aviation
The Business Aviation SBU delivered a solid performance thanks largely to
strong revenue and profit growth in our US MRO business, the world's largest
business aviation market, which we operate under our Jet East brand.
Further investments in the first half of 2023 saw the opening of our new
flagship retail base maintenance facility in Statesville, North Carolina.
During the same period, and working collaboratively with one of our major
clients, we consolidated the base maintenance services we previously provided
at Las Vegas into our Millville facility, which will optimise efficiencies and
service delivery and transitioned the released capacity at Vegas to support
additional line maintenance demand there. These highly strategic investments
are expected to ensure that Jet East continues to deliver solid revenue and
profit growth into the future.
Elsewhere, the other three business lines within this SBU (Aircraft Charter
and Management, FBO services and MRO services in Europe) have been the most
challenged by the economic conditions which have limited growth and impacted
margins. However, the pipeline of new business opportunities across these
business lines is encouraging.
Special Mission
The Special Mission SBU delivered another strong performance which is
underpinned by its stable long term government contracts. Inflationary cost
pressures have impacted margins, but this has been partially mitigated by
increased revenues resulting from appropriate contract provisions.
The SBU is currently experiencing a high level of bid activity both in terms
of the periodic re-competing of some of its current contracts as well as the
strong pipeline of new opportunities. Alongside this, the SBU continues to
make very good progress in the standing up of its capabilities to support the
commencement of operations in January 2024 of the two recent major contract
awards in Wales and the North Sea. This contracts awards, which we announced
towards the end of last year will deliver significant revenue and profit
growth for the SBU.
Technology & Outsourcing ('T&O')
The T&O SBU continues to deliver leading edge technology and outsourcing
services to support the business sector. We continue to invest in our industry
leading SaaS platform, which we deliver though our myairops brand.
There is extensive interest in the product and a strong pipeline of qualified
prospects, but client capture has been slower than expected. This is largely
due to customers delaying their transition decisions due to other priorities
during this uncertain economic period. However, the continuing engagement
with these customers is encouraging and management remains positive about the
prospects for this SaaS offering and the opportunity to develop it into a
market leading service. Sales and marketing efforts are very focused on
growing our share of the North American market, which is the world's largest.
The skill shortages in the technology sector are impacting costs and
development timelines, and consequently margins.
H1 2023 Operational & Financial Performance
The Operational Performance report and CFO Finance review that follow provide
detailed segmental analysis and financial commentary on the operational and
financial performance of the Group.
Outlook
The Group continues to make steady progress in the execution of its strategy.
Despite the strong growth in the US, the Group delivered modest revenue growth
overall during the period against the backdrop of a challenging economic and
business environment, but as expected, margins were impacted by inflationary
cost pressures. With little prospect of any significant change in the
macro-economic conditions coupled with the continuing geopolitical
uncertainties, the Board remains understandably cautious in its outlook for
the second half of the year.
However, we are continuing to focus on optimising operational performance and
controlling costs which is helping to mitigate the impact on margins whilst
the inflationary and adverse economic conditions persist in the UK and
ensuring the Group is well placed to restore and grow these margins when
conditions ease.
Marwan Khalek
Chief Executive Officer
Group Operational Performance Review
Revenue(1)
$'000
H1 2023 H1 2022
Unaudited Unaudited
Business Aviation 115,418 108,792
Special Mission 27,091 27,245
Technology & Outsourcing 2,446 2,639
Branding Fees − 625
Total 144,955 139,301
(1) There are no Adjusting Items that impact Revenue. To aid comparability
2022 results have been calculated on a constant currency basis. See note 4 for
more details.
Gross Profit(1,2)
$'000
H1 2023 H1 2022(1,2)
Unaudited Unaudited
Business Aviation 20,750 17,039
Special Mission 5,528 7,168
Technology & Outsourcing 1,334 1,889
Branding Fees − 625
Total 27,612 26,721
(1) There are no Adjusting Items that impact Gross Profit. To aid
comparability 2022 results have been calculated on a constant currency basis.
See note 4 for more details.
(2) Depreciation charges of $2,788,000 in the prior year have been
reclassified in the profit and loss account to cost of sales to conform with
the disclosure in the Annual Report and Accounts 2022. This has resulted in a
reduction of $2,788,000 in gross profit and is attributable to Business
Aviation ($327,000), Special Mission ($2,440,000) and Technology &
Outsourcing ($21,000).
EBIT
$'000
Adjusted Statutory
H1 2023 H1 2022 H1 2023 H1 2022
Unaudited Unaudited Unaudited Unaudited
Business Aviation 545 (797) (1,013) (3,807)
Special Mission 2,841 2,302 2,806 2,260
Technology & Outsourcing (1,499) (493) (1,632) (636)
Branding Fees - 625 − 625
Central Costs (1,552) 137 (1,971) (130)
Total 335 1,774 (1,810) (1,688)
The above Group results are explained in detail below.
Business Aviation
Business Aviation is focused on the delivery of the following lines of
business to clients principally in the top three regional business aviation
markets: the US, Europe, and the Middle East.
/ Management. The operational management of an aircraft (or fleet), and its
crew, that the owner wishes to place on one of the Group's air operating
certificates ("AOCs")
/ Charter. The sale of available flight hours on aircraft to charter brokers
or to direct clients worldwide
/ FBO. The management of our strategically positioned fixed base operations at
airports in the UK, Channel Islands and Middle East
/ MRO. The delivery of comprehensive maintenance, repair and modification
solutions that support business aviation aircraft operators and owners.
Business Aviation MRO in the US has a dedicated management team and is
separately reviewed by the Group Chief Executive Officer who acts as the Chief
Operating Decision Maker ('CODM'). Therefore, Business Aviation MRO US has
been presented separately from Business Aviation excluding MRO US which falls
under a separate management team and is separately reviewed by the CODM.
Unaudited Adjusted EBIT
$'000
BA MRO US BA excluding MRO US Total
H1 2023 H1 2022(2) Constant currency growth(1) H1 2023 H1 2022 Rebased Constant currency growth(1) H1 2023 H1 2022(2) Rebased Constant currency growth(1)
H1 2022 H1 2022
Revenue 70,701 55,473 27% 44,717 53,319 51,518 (13%) 115,418 108,792 106,991 8%
Gross profit 14,779 12,045 23% 5,971 4,994 4,910 22% 20,750 17,039 16,955 22%
Gross profit % 20.9% 21.8% 9.4% 9.5% 18.0% 15.7%
13.4% 15.8%
Adjusted EBIT(1) 885 (66) (340) (731) 545 (797)
( )
(1 )The Alternative Performance Measures (APMs) are defined in Note 4 of the
notes to the interim financial statements and reconciled to the nearest IFRS
measure. APMs include Adjusted Revenue, Adjusted Gross Profit, Adjusted EBIT
and Net debt. APMs also include organic and constant currency Revenue, Gross
Profit and Adjusted EBIT.
(2) Depreciation charges of $2,788,000 in the prior year have been
reclassified in the profit and loss account to cost of sales to conform with
the disclosure in the Annual Report and Accounts 2022. This has resulted in a
reduction of $2,788,000 in gross profit and is attributable to Business
Aviation ($327,000), Special Mission ($2,440,000) and Technology &
Outsourcing ($21,000).
Overall, the Business Aviation SBU grew its revenues by 8% on a constant
currency basis to $115.4m. Gross profit was up 22% on a constant currency
basis to $20.8m.
The US business has seen increased revenues and gross profits from all key
business lines, which led to 27% growth. Gross profit also improved, up 23% to
$14.8m (H2 2022: $12.0m).
The US Adjusted EBIT was $0.9m after investments in startup activities at the
Statesville facility ($1.4m) and the transition of the Las Vegas facility to
tier one status ($1.1m).
In the BA ROW the number of aircraft under management decreased compared with
prior period and this resulted in lower revenue. Improved gross profit
benefitted from higher profit allocation to BA ROW maintenance activities in
relation to work undertaken to support Special Mission contracts. The
improvement in BA ROW adjusted EBIT reflects the improved gross profits,
combined with the recovery of previously impaired debtors, partially offset by
re-allocation of overheads to the BA ROW MRO activities.
USD'000s BA MRO US BA excluding MRO US Total
H1 2023 H1 2022 H1 2023 H1 2022 H1 2023 H1 2022
Adjusted EBIT(1) 885 (66) (340) (731) 545 (797)
Exceptional items - integration and business re-organisation costs − (244) − − − (244)
Exceptional items - deferred consideration adjustment − 243 − − − 243
Exceptional items - profit on disposal of entity − − − 126 − 126
Exceptional items - impairment of goodwill − (787) − − − (787)
Exceptional items - impairment of assets under construction − − (98) (749) (98) (749)
Long-term employee incentive plan (1,026) (956) − − (1,026) (956)
Share-based payments 2 (201) (14) (18) (12) (219)
Amortisation (369) (368) (53) (56) (422) (424)
EBIT (508) (2,379) (505) (1,428) (1,013) (3,807)
( )
(1) The Alternative Performance Measures (APMs) are defined in
Note 4 of the notes to the interim financial statements and reconciled to the
nearest IFRS measure. APMs include Adjusted Revenue, Adjusted Gross Profit,
Adjusted EBIT and Net debt. APMs also include organic and constant currency
Revenue, Gross Profit and Adjusted EBIT
Exceptional items include: -
· Impairment charges of $98k (H1 2022: $749k) relating to assets
under construction at the Sharjah Business Aviation Centre.
· There were various other H1 2022 charges which were not repeated
in H1 2023. These relate to the cost of integrating Jet East into Business
Aviation ($244k); release of the performance related deferred consideration
relating to the US acquisition ($243k); gain on the sale of Gama International
Saudi Arabia ($126k) and impairment of goodwill associated with the closure of
the paint and interior completion operations at FXE ($787k)
Other tabulated items include: -
· The Jet East long-term incentive scheme $1,026k (H1 2022: $956k)
relating to senior executives' incentives agreed at the time of acquisition
· Share-based payments charges of $12k (H1 2022: $219k)
· Amortisation of the acquired intangibles of $422k (H1 2022:
$424k)
Special Mission
The Special Mission SBU provides the mission expertise to assist governments
and businesses in exploiting a variety of aviation assets (principally fixed
wing and helicopters) within the following sectors:
/ Air Ambulance & Rescue. The delivery of fixed wing and rotary mission
solutions to the governments of Scotland, Jersey and Guernsey as well as the
approximately 21 helicopter air ambulance charities operating within the UK
/ National Security & Law Enforcement. Providing "intelligence as a
service" aviation platforms to the UK government to protect the national
interest
/ Infrastructure & Survey. The monitoring of critical national
infrastructure for the purposes of failure monitoring, environmental controls,
mapping or other such studies
USD'000s H1 2023 H1 2022(2) Rebased(1) Constant currency growth(1)
H1 2022
Revenue 27,091 27,245 25,839 5%
Gross profit(2) 5,528 7,168 6,762 (18%)
Gross profit % 20.4% 26.3% 26.2%
Adjusted EBIT(1) 2,841 2,302
(1 )The Alternative Performance Measures (APMs) are defined in Note 4 of the
notes to the interim financial statements and reconciled to the nearest IFRS
measure. APMs include Adjusted Revenue, Adjusted Gross Profit, Adjusted EBIT
and Net debt. APMs also include organic and constant currency Revenue, Gross
Profit and Adjusted EBIT.
(2) Depreciation charges of $2,788,000 in the prior year have been
reclassified in the profit and loss account to cost of sales to conform with
the disclosure in the Annual Report and Accounts 2022. This has resulted in a
reduction of $2,788,000 in gross profit and is attributable to Business
Aviation ($327,000), Special Mission ($2,440,000) and Technology &
Outsourcing ($21,000).
Special Mission has delivered 5% revenue growth on a constant currency basis
in the first half, reflecting inflationary price adjustments to key contracts.
Gross profit has reduced by 18% reflecting higher profit allocation to BA ROW
maintenance activities which support Special Mission contracts and cost
inflation. Adjusted EBIT increased to $2.8m (H2 2022: $2.3m) reflecting
re-allocation of overheads to the Group's MRO activities, partially offset by
the lower gross profit.
In the Annual Report and Accounts 2022, the Company disclosed the award of a
five-year, multi aircraft, North Sea offshore contract to Bond Helicopters,
the Group's newly created joint venture with Peter Bond. During the first half
of 2023 the Company incurred costs of $0.5m on various activities associated
with standing up this contract. These costs have been capitalised as a
contract asset and will be amortised over the life of the contract which is
scheduled to commence on 1 January 2024.
USD'000s H1 2023 H1 2022
Adjusted EBIT(1) 2,841 2,302
Share-based payments - (5)
Amortisation (35) (37)
EBIT 2,806 2,260
(1) The Alternative Performance Measures (APMs) are defined in
Note 4 of the notes to the interim financial statements and reconciled to the
nearest IFRS measure. APMs include Adjusted Revenue, Adjusted Gross Profit,
Adjusted EBIT and Net debt. APMs also include organic and constant currency
Revenue, Gross Profit and Adjusted EBIT
In addition to the movements discussed above, statutory EBIT includes
share-based payment charges and amortisation relating to the intangibles
acquired as part of the Jersey and Guernsey Air Ambulance business in 2020.
Technology & Outsourcing
T&O comprises of four lines of business which trades as Gama Aviation, but
with a further two brands, FlyerTech and myairops®. The lines of business are
Software & Data Services, Ground Operations, Part-M Services and
Maintenance Management & Advisory Services. The business unit provides
Continuing Airworthiness Management ('CAM') and airworthiness review
certification (ARC) and surveying services for business aviation, military,
and commercial airline operators. myairops® has developed a suite of business
aviation products deployed as "Software as a Service" (SaaS) and mobile app
solutions for aviation operators and charter brokers, flight support
companies, FBOs and regional airports. The Ground Operations line of business
provides trip support services which includes flight planning and the
arrangement of services such as permits, slots and fuel. These services are
provided to business and commercial aviation customers.
USD'000s H1 2023 H1 2022(1) Rebased(1) Constant currency growth(1)
H1 2022
Revenue 2,446 2,639 2,503 (2%)
Gross profit(2) 1,334 1,889 1,789 (25%)
Gross profit % 54.5% 71.6% 71.5%
Adjusted EBIT(2) (1,499) (493)
(1 )The Alternative Performance Measures (APMs) are defined in Note 4 of the
notes to the interim financial statements and reconciled to the nearest IFRS
measure. APMs include Adjusted Revenue, Adjusted Gross Profit, Adjusted EBIT
and Net debt. APMs also include organic and constant currency Revenue, Gross
Profit and Adjusted EBIT.
(2) Depreciation charges of $2,788,000 in the prior year have been
reclassified in the profit and loss account to cost of sales to conform with
the disclosure in the Annual Report and Accounts 2022. This has resulted in a
reduction of $2,788,000 in gross profit and is attributable to Business
Aviation ($327,000), Special Mission ($2,440,000) and Technology &
Outsourcing ($21,000).
Technology and Outsourcing revenue remained broadly in line on a constant
currency basis. However, increased labour and associated costs have led to a
25% reduction in gross profits, also on a constant currency basis. The lower
gross profit combined with higher investment in marketing and intangibles,
which increases amortisation, has resulted in an Adjusted EBIT loss of $1.5m
(2022: Adjusted EBIT loss of $0.5m).
USD'000s H1 2023 H1 2022
Adjusted EBIT(1) (1,499) (493)
Share-based payments (4) (7)
Amortisation (129) (136)
EBIT (1,632) (636)
(1) The Alternative Performance Measures (APMs) are defined in
Note 4 of the notes to the interim financial statements and reconciled to the
nearest IFRS measure. APMs include Adjusted Revenue, Adjusted Gross Profit,
Adjusted EBIT and Net debt. APMs also include organic and constant currency
Revenue, Gross Profit and Adjusted EBIT
Adjustments to EBIT relate to share-based payments and amortisation of
acquired customer relationship intangibles, which decreased due to the impact
of foreign exchange.
Branding Fees
Branding fees were $Nil during the 6 months ended 30 June 2023. The US
branding fee arrangement ended on 2 March 2022, with $625k being recognised in
revenue and gross profit in H1 2022, and $625k recognised in EBIT in H1 2022.
Financial Review
Adjusted(1) $m Statutory $m
Jun-23 Jun-22(3) Jun-23 Jun-22(3)
Unaudited Unaudited Unaudited Unaudited
Revenue 145.0 139.3 145.0 139.3
Gross profit(3) 27.6 26.7 27.6 26.7
Gross profit % 19.0% 19.2% 19.0% 19.2%
EBITDA(2) 7.9 9.2 6.4 6.3
EBIT 0.3 1.8 (1.8) (1.7)
Loss for the period (2.7) (0.8) (4.5) (3.8)
Basic and diluted loss per share (cents) (4.2) (1.6) (7.0) (6.4)
(1)The Alternative Performance Measures (APMs) are defined in Note 4 of the
notes to the interim financial statements and reconciled to the nearest IFRS
measure. APMs include Adjusted Revenue, Adjusted Gross Profit, Adjusted EBIT
and Net debt. APMs also include organic and constant currency Revenue, Gross
Profit and Adjusted EBIT
(2) Statutory EBITDA represents earnings before interest, tax, depreciation,
and amortisation. Adjusted EBITDA is Statutory EBITDA after Adjusting Items.
Adjusted EBITDA and Statutory EBITDA provide management and investors with
useful additional information about the Group's performance and profitability.
(3) Depreciation charges of $2,788,000 in the prior year have been
reclassified in the profit and loss account to cost of sales to conform with
the disclosure in the Annual Report and Accounts 2022. This has resulted in a
reduction of $2,788,000 in gross profit and is attributable to Business
Aviation ($327,000), Special Mission ($2,440,000) and Technology &
Outsourcing ($21,000).
Revenue and Gross Profit Bridges
$m
Unaudited
Revenue Gross Profit
2022 139.3 26.7
Rebasing of 2022 results (3.3) (0.6)
Rebased Revenue and Gross Profit − 2022 at 2023 exchange rate 136.0 26.1
Business Aviation 8.4 3.8
Special Mission 1.3 (1.2)
Technology & Outsourcing (0.1) (0.5)
Branding Fee (0.6) (0.6)
2023 145.0 27.6
Unaudited Statutory EBIT Bridge
$m
Statutory EBIT - 2022 (1.7)
Improvement in gross profit 0.6
Movement in foreign exchange gains/losses (1.7)
Increase in administrative expenses (0.5)
Decrease in impairment losses 0.7
Decrease in impairment of goodwill 0.8
Statutory EBIT - 2023 (1.8)
Unaudited Adjusted EBIT Bridge
$m
Adjusted EBIT - 2022 1.8
Increase in gross profit 0.6
Foreign exchange gains/loss movement (1.7)
Increase in administrative expenses (0.4)
Adjusted EBIT - 2023 0.3
Unaudited Adjusted EBIT excluding one-off items
$m
H1 2023 H1 2022
Adjusted EBIT 0.3 1.8
Foreign exchange losses/(gains) 0.3 (1.4)
Adjusted EBIT excluding foreign exchanges gains losses 0.6 0.4
Excluding one off items:
Statesville start-up 1.4 -
Las Vegas restructuring 1.1 -
Legacy debtor recovery (2.6) -
Release of PPP grant repayment provision - (1.0)
Branding fees - (0.6)
Operating losses associated with closure of FXE - 1.0
Adjusted EBIT - excluding one-off items 0.5 (0.2)
Impairments
Expenditure of $0.1m (H1 2022: $0.7m) incurred during the year on the Sharjah
Business Aviation Centre project has been impaired, which brings the total
impairments associated with this project to $15.3m. Whilst the Group is in
discussions with investors to secure the necessary funding for the project,
the Board considers that it is appropriate to recognise an impairment loss in
respect of this expenditure until profits can be forecast with greater
certainty.
In H1 2022, an impairment loss against goodwill of $0.8m was recognised
associated with the closure of the paint and interior completion operations at
Fort Lauderdale Executive Airport.
Finance income and expenses
Finance income of $0.7m reflects interest received on legacy debts (H1 2022:
$1.8m of foreign exchange gains on intercompany loans). Finance expense of
$3.5m (H1 2022: $4.3m) reflects the decrease in debt levels and foreign
exchange losses on debt in prior year, partially offset by higher interest
rates.
Taxation
There is a statutory taxation credit for the period of $0.1m (H1 2022: $0.2m
credit). The adjusted taxation for the period is a $0.3m charge (H1 2022:
$0.3m charge).
Earnings per share (EPS)
Weighted average shares in issue increased to 64.0m (H1 2022: 63.7m) following
the share issue in May 2022. Adjusted EPS was a loss of 4.2 cents per share
(H1 2022: 1.6 cents). Basic Statutory EPS was a loss per share of 7.0 cents
(H1 2022: 6.4 cents). No share options, vested or otherwise, have been
included in this calculation.
Credit Facilities
In 2022 and 2023, the Group progressed the establishment of new funding and
credit facilities to replace the RCF of $50m and term loan of £20m with HSBC,
which matured on 14 November 2022 and 31 January 2023, respectively. As part
of the refinancing, we reported in the H1 2022 Interim Results the completion
of the sale and lease back of its helicopter assets resulting in a cash inflow
of $27m.
On 28 December 2022, new credit facilities were secured by the Group's wholly
owned US operating subsidiary, Gama Aviation (Engineering) Inc. ("GAEI"), from
a US lender Great Rock Capital LLC. The $25.0m facilities are for a term of
four years and comprise a combination of a RCF and up to $6.5m of term loans.
A total of $20.0m was available immediately, with a further $5.0m available
contingent on future trading performance. The facilities are subject to
customary financial covenants. $11.0m of the facility was drawn down to repay
GAEI's intercompany loan from the Company. The balance of the facility is
available to fund the investment capital expenditure and other working capital
requirements of the US business in the execution of the Group's organic growth
strategy in the US.
On 25 January 2023, the Group repaid its £20m term loan from HSBC (which had
a maturity date of 31 January 2023) in full utilising the $11.0m received from
the repayment of the Company's intercompany loan with GAEI, together with cash
at hand.
On 3 March 2023, the Group received £9.4m ($11.1m) from Close Brothers
Aviation and Marine by way of a loan secured by a mortgage over the Group's
owned aircraft. The loan will be used to fund the investment capital
expenditure and other working capital requirements of the non-US business.
During 2023, management has continued to work to optimise the Company's
capital structure via further sale and leaseback and asset sale activities to
ensure that the group is fully capitalised to meet its liquidity requirements
and to finance its development projects.
Net debt and cash flow movements
Net cash inflow from operating activities was $11.6m for the first half of
2023 compared with $15.5m for the same period in 2022 and includes the benefit
of deferred revenue received in advance on certain special mission contracts
in H1 2023
Net debt, exclusive of lease obligation, was $12.1m as at 30 June 2023 (31
December 2022: $13.7m). The repayment of the HSBC term loan was offset by
the draw down of a new term loan with Close Brothers of $9.4m and a reduction
in cash balances by $10.8m to $11.6m.
Obligations under leases were $53.9m (31 December 2022: $52.7m). As a result,
total net debt remained broadly stable at $66.1m (31 December 2022: $66.4m).
Liquidity
The Group liquidity comprises $11.6m (31 December 2022: $22.4m) of cash and
$8.3m of its $15.0m RCF with Great Rock Capital was undrawn as at 30 June 2023
(31 December 2022: $9.0m).
Collection of receivables
Following the litigation update provided in the Company's 2022 Annual Report
and 2022 Interim release, the Group continues to pursue the recovery of its
long-standing trade receivables through enforcement actions both in the UK and
in other jurisdictions. The Group has made progress through court proceedings
in the UK, which has resulted in material collections in 2023 and anticipates
further recoveries in due course.
Interim dividend
The Directors do not propose that an interim dividend be paid for the six
months to 30 June 2023 (H1 2022: $nil).
Michael Williamson
Chief Financial Officer
Responsibility Statements
Each directors confirms that to the best of their knowledge:
a) the condensed consolidated set of interim financial statements has been
prepared in accordance with IAS 34 "Interim Financial Reporting";
b) the interim financial report includes a fair review of the information
required by DTR 4.2.7R (indication of important events during the first six
months and description of principal risks and uncertainties for the remaining
six months of the year); and,
c) the interim financial report includes a fair review of the information
required by DTR 4.2.8R (disclosure of related parties' transactions and
changes therein).
The basis of preparation of the condensed consolidated interim financial
statements is shown in Note 2, and related party transactions are shown in
Note 8. The principal risks and uncertainties for the remainder of the year
are unchanged from those set out in the Group's recently published statutory
financial statements for the year ended 31 December 2022 and shown below.
The directors consider the principal risks to the business are:
/ Liquidity and cash resources to support and sustain future growth of the
business
/ Health and safety risks from poor operational performance or an air accident
which damages the Group's reputation
/ Increasing regulatory burden and maintaining oversight on existing approvals
that may result with a non-compliance
/ Changes in political and economic climate that make air transport less
attractive
/ Reliance on key individuals and attrition of key staff that disrupt business
activities
/ Increasing concentration and reliance on a small number of key customers
/ Cyber threat and information security
Signed on behalf of the Board,
Marwan Khalek
Chief Executive Officer
Gama Aviation Plc
Condensed consolidated income statement
For the period ended 30 June 2023
Period ended 30 June 2023 Period ended 30 June 2022(2)
Unaudited Unaudited
Statutory result Adjustments(1) Adjusted result(1) Statutory result(4) Adjustments(1) Adjusted
$'000
$'000
$'000
$'000
$'000
Result(1 4)
$'000
Continuing operations:
Revenue 144,955 − 144,955 139,301 − 139,301
Cost of sales(2) (117,343) − (117,343) (112,580) − (112,580)
Gross profit 26,721 − 26,721
27,612 − 27,612
Administrative expenses(3 4) (29,089) 2,145 (26,944) (29,824) 3,462 (26,362)
Other expenses/income (333) − (333) 1,415 − 1,415
Operating (loss)/profit (1,810) 2,145 335 (1,688) 3,462 1,774
Finance income 723 − 723 1,783 − 1,783
Finance expense (3,499) − (3,499) (4,133) − (4,133)
(Loss)/profit before tax (4,586) 2,145 (2,441) (4,038) 3,462 (576)
Taxation credit/(charge) (note 9) 87 (339) (252) 194 (449) (255)
(Loss)/profit for the period (4,499) 1,806 (2,693) (3,844) 3,013 (831)
Attributable to:
Owners of the Company (4,457) 1,806 (2,651) (4,061) 3,013 (1,048)
Non-controlling interests (42) − (42) 217 − 217
Earnings per share attributable to the equity holders of the parent
Basic and diluted (cents) (7.0) 2.8 (4.2) (6.4) 4.8 (1.6)
(1) APMs are defined in Note 4 of the notes to the financial
statements and reconciled to the nearest IFRS measure.
(2 ) Depreciation charges of $2.8m in the prior period
relating to aircraft and refurbishment, and leasehold property improvements
have been reclassified from administrative expenses to cost of sales to
conform with the current year presentation and to show depreciation of assets
used in the delivery of revenues in cost of sales. There has been no change in
operating loss or loss for the year in respect of the prior period.
(3) Impairment of assets under construction have been included in
the administration expenses to be consistent with the presentation in the 2022
Annual report and accounts.
(4) Foreign exchange gain of $1.4m in the prior period has been
reclassified from administrative expenses to other Income in line with the
presentation in the current period.
Gama Aviation Plc
Condensed consolidated statement of comprehensive income
For the period ended 30 June 2023
H1 2023
Unaudited H1 2022
$'000
Unaudited
$'000
Loss for the period (4,499) (3,844)
Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign operations 1,888 (4,996)
Total comprehensive loss for the period (2,611) (8,840)
Total comprehensive loss is attributable to:
Owners of the Company (2,569) (9,057)
Non-controlling interest (42) 217
(2,611) (8,840)
Gama Aviation Plc
Condensed consolidated balance sheet
As at 30 June 2023
30 June 2023 31 December 2022
Unaudited Audited
$'000
$'000
Non-current assets
Goodwill 20,134 19,176
Other intangible assets 12,730 13,170
Total intangible assets 32,864 32,346
Property, plant and equipment 22,691 21,794
Right-of-use assets 39,571 38,194
Trade and other receivables 1,300 1,413
Deferred tax asset (note 9) 6,172 6,100
Total non-current assets 102,598 99,847
Current assets
Inventories 7,436 7,278
Trade and other receivables 56,295 58,271
Cash and cash equivalents 11,560 22,406
75,291 87,955
Total assets 177,889 187,802
Current liabilities
Trade and other payables (41,792) (46,770)
Current tax liabilities (675) (533)
Obligations under leases (11,685) (11,053)
Provisions (1,751) (2,250)
Borrowings (note 6) (8,593) (31,225)
Deferred revenue (17,918) (9,214)
Deferred consideration - (335)
(82,414) (101,380)
Total assets less current liabilities 95,475 86,422
Non-current liabilities
Borrowings (note 6) (15,097) (4,883)
Obligations under leases (42,254) (41,628)
Provisions (607) (885)
Trade and other payables (4,792) (3,663)
Deferred tax liabilities (note 9) (1,116) (1,206)
(63,866) (52,265)
Total liabilities (146,280) (153,645)
Net assets 31,609 34,157
30 June 2023 31 December 2022
Unaudited Audited
$'000
$'000
Shareholders' equity
Share capital 958 958
Share premium 63,712 63,712
Foreign exchange reserve 34,989 34,987
Other reserves (27,992) (29,880)
Accumulated losses (40,388) (35,992)
Total shareholders' equity 31,279 33,785
Non-controlling interest 330 372
Total equity 31,609 34,157
Gama Aviation Plc
Condensed consolidated statement of changes in equity
For the period ended 30 June 2023
Share capital Share premium Other reserves Foreign exchange reserve Accumulated losses Total shareholders' equity Non-controlling interest Total equity
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Balance at 1 January 2022 954 63,502 34,997 (24,722) (27,301) 47,430 93 47,523
Loss for the period - - - - (4,061) (4,061) 217 (3,844)
Other comprehensive income - - - (4,996) - (4,996) - (4,996)
Total comprehensive loss for the period - - - (4,996) (4,061) (9,057) 217 (8,840)
Share issue 4 211 - - - 215 - 215
Cost of share-based payments - - 91 - - 91 - 91
Transfer for lapsed options - - (30) - 30 - - -
Balance at 30 June 2022 958 63,713 35,058 (29,718) (31,332) 38,679 310 38,989
Loss for the period - - - - (4,798) (4,798) 62 (4,736)
Other comprehensive income - - - (162) - (162) - (162)
Total comprehensive loss for the period - - - (162) (4,798) (4,960) 62 (4,898)
Shares issued in period - (1) - - - (1) - (1)
Cost of share-based payments - - 67 - - 67 - 67
Transfer for lapsed options - - (138) - 138 - - -
Balance at 31 December 2022 958 63,712 34,987 (29,880) (35,992) 33,785 372 34,157
Loss for the period - - - - (4,457)
(4,457) (42) (4,499)
Other comprehensive income - - - 1,888 - 1,888 - 1,888
Total comprehensive loss for the period - - - 1,888 (4,457) (2,569) (42) (2,611)
Share issue - - - - - - - -
Cost of share-based payments - - 63 - - 63 - 63
Transfer for lapsed options - - (61) - 61 - - -
Balance at 30 June 2023 958 63,712 34,989 (27,992) (40,388) 31,279 330 31,609
Gama Aviation Plc
Condensed consolidated cash flow statement
For the period ended 30 June 2023
H1 2023 H1 2022
Unaudited Unaudited
$'000 $'000
Net cash generated by operating activities
Loss before tax (4,586) (4,038)
Adjustments for:
Finance income (723) (1,783)
Finance costs 3,499 4,132
Depreciation - wholly owned assets 2,535 3,166
Depreciation - ROU assets in admin expense 280 338
Depreciation - ROU assets in cost of sales 3,136 2,722
Amortisation of acquired intangible assets 586 598
Amortisation of other intangible assets 1,593 1,163
Impairment of goodwill - 787
Impairment of right-of-use assets - 37
Impairment of assets under construction 98 749
Impairment of leasehold improvements - 124
Loss on disposal of property, plant & equipment - 65
Release of provision in respect of COVID-19 government support program - (1,000)
Share based payment expense 63 306
Operating cash inflow before movements in working capital 6,481 7,366
Unrealised foreign exchange movements (288) (2,214)
Decrease in inventories 32 666
Decrease in receivables 3,659 1,131
Non-cash doubtful debt provision expense (22) 108
(Decrease)/Increase in payables (5,389) 1,270
Increase in deferred revenue 7,921 7,369
Decrease in provisions (792) (133)
Cash generated by operations 11,602 15,563
Taxes paid - (30)
Net cash flows from operating activities 11,602 15,533
Cash flows from investing activities
Purchases of property, plant and equipment (3,027) (2,289)
Purchases of intangibles (1,235) (996)
Net cash used in investing activities (4,262) (3,285)
Cash flows from financing activities
Interest paid (1,196) (430)
Interest received 723 −
Lease payments (5,113) (3,782)
Proceeds from borrowings 12,245 6,000
Repayment of borrowings (25,166) (13,003)
Net cash used in financing activities (18,507) (11,215)
Net (decrease)/increase in cash and cash equivalents (11,167) 1,033
Cash and cash equivalents at the beginning of the period 22,406 10,243
Effect of foreign exchange rates 321 143
Cash and cash equivalents at the end of the period 11,560 11,419
Notes to the interim financial statements
For the period ended 30 June 2022
1. Corporate information
Gama Aviation Plc is a public company limited by shares, incorporated in the
United Kingdom. The address of the registered office is 1st Floor, 25 Templer
Avenue, Farnborough, Hampshire, England, GU14 6FE. The Company's shares are
publicly traded on the AIM market of the London Stock Exchange.
2. Accounting policies
Basis of preparation
These unaudited interim condensed consolidated financial statements (the
'interim financial statements') are for the six months ended 30 June 2023.
They have been prepared in accordance with IAS 34 Interim Financial Reporting.
They do not include all the information required for full annual financial
statements and should be read in conjunction with the consolidated financial
statements of the Group for the year ended 31 December 2022.
The accounting policies set out in the Group's statutory financial statements
for the year ended 31 December 2022 have been applied in the preparation of
the interim financial statements. The Directors consider that the Group has
adequate resources to remain in operation for the foreseeable future and have
therefore continued to adopt the going concern basis in preparing the interim
financial statements.
Going concern
To support their assessment of going concern, the Directors have reviewed
detailed cash flow projections for the Group for the period from the date of
approval of these interim financial statements to 31 December 2024. The
Directors have also considered the outlook for the business beyond 31 December
2024 based upon its updated five-year strategic plan.
The analysis takes account of the following, amongst other, relevant
considerations:
· Working capital levels and the conversion of profits into cash
flows,
· The recovery of legacy debtor balances,
· The sale and/or sale leaseback of some of the Group's assets,
· The fully drawn $5.0m Term Loan and undrawn $1.5m Delayed Term
Loans with Great Rock Capital,
· The Revolving Credit Facility of up to initially $15.0m with the
potential to increase to $20m (the amount available to be drawn down is
subject to various restrictions) from Great Rock Capital. Of this facility
$8.3m was undrawn as of 30 June 2023,
· The £9.4m ($11.1m) loan from Close Brothers that completed on 3
March 2023, and which is secured on owned aircraft, and
· Cash of $11.5m of 30 June 2023 and $9.1m as at 21 September 2023.
The credit facilities with Great Rock Capital are held in the Company's US
subsidiary and are subject to financial covenants and expire in December 2026.
The RCF is settled and drawn down on a cyclical basis and has been presented
in current liabilities.
The term loan with Great Rock Capital falls due for repayment over twelve
months from the reporting date and has been presented in non-current
liabilities.
The key assumptions in the Board approved base case projections relate to
revenue, profit performance and working capital cash flows. Additionally, the
detailed cashflow projections consider planned future events within 2023 and
2024, including the Directors' assessment of:
· The likelihood of recovery of legacy debtor balances
· The likelihood of securing the planned funding through the sale
and/or sale lease back of Group assets.
The Directors have also considered a severe but plausible downside scenario in
which EBITDA is lower and working capital outflows, funding costs and
corporation tax rates are higher than base case projections.
In both the base case scenario and the severe but plausible downside scenario,
the Directors are satisfied that the Group has sufficient headroom and
potential further mitigation actions to ensure that the Group will remain
solvent and be able to pay its debts as they fall due during a period of at
least 12 months from the date of approval of these interim financial
statements.
Accordingly, after making appropriate enquiries and considering the
uncertainties described above, the Directors have, at the time of approving
these interim financial statements, a reasonable expectation that the Group
has adequate resources to continue in operational existence for the
foreseeable future and, consequently, consider that it is appropriate to adopt
the going concern basis in preparing these interim financial statements.
However, certain assumptions within the cash flow forecasts relating to
recovery of legacy debtor balances and the generation of funding through the
sale and/or and lease back of Group assets have not been concluded at the time
of approval of these interim financial statements. Furthermore, there is a
risk that these events may not be completed in the time scales planned as they
are not fully under the control of the Group. Consequently, there is a
material uncertainty that may cast significant doubt about the Group's ability
to continue as a going concern.
If one or more of these events do not occur, the Directors anticipate
undertaking additional fundraising and/or cost and cash saving activities to
ensure that the Group is able to meet its liabilities as they fall due.
The financial statements do not include any adjustments that would result if
the Group were unable to continue as a going concern.
3. Segment information
Reportable segments are operating segments that either meet the thresholds and
conditions set out in IFRS 8 for separate reporting or are considered by the
Board to be appropriately aggregated into reportable segments under IFRS 8.
All inter-segment transfers, including the recharge of centrally incurred
costs from Corporate to other operating segments, are carried out at arm's
length prices. The measure of revenue and gross profit reported to the Chief
Operating Decision Maker to assess the performance is based on external
revenue and gross profit for each operating segment and excludes intra-group
revenues and gross profit.
The results were reviewed by the Group Chief Executive Officer, who acts as
the Chief Operating Decision Maker (CODM) in the SBU structure. The CODM
reviews monthly internal reporting on a pre-IFRS 16 basis at the operating
segment level. The impact on application of IFRS 16 is reviewed separately
ahead of statutory reporting.
The Group has three SBUs: Business Aviation (Aircraft Management, Charter, FBO
& Maintenance), Special Mission (Air Ambulance & Rescue, National
Security & Policing, Infrastructure & Survey, Energy & Offshore);
and Technology & Outsourcing (Flight Operations, FBO, CAM software, Flight
Planning, CAM & ARC services). The Group believes this will provide a
direct line of sight for shareholders such that each SBU's activities in each
market, its investment requirements and its performance can be more easily
assessed and understood.
The IFRS 8 operating segments within these global divisions are Special
Mission, Business Aviation MRO US, Business Aviation excluding MRO US,
Technology & Outsourcing, Associates, Corporate and Branding Fees. The
operating segments, except T&O, met the quantitative thresholds to report
separately under IFRS 8; however, T&O is presented separately as it is of
strategic importance.
A reconciliation of segmental to overall Group performance is tabulated below:
For the period ended 30 June 2023 For the period ended 30 June 2022
USD'000s Gross profit EBIT Adjusted EBIT Adjusted EBIT pre-IFRS 16 Gross profit EBIT Adjusted EBIT Adjusted EBIT pre-IFRS 16
Revenue Revenue
BA MRO US 70,701 14,779 (508) 885 726 55,473 12,045 (2,379) (66) (202)
BA excluding MRO US (731)
44,717 5,971 (505) (340) (906) 53,319 4,994 (1,428) (1,007)
Business Aviation 108,792 17,039 (3,807) (797) (1,209)
115,418 20,750 (1,013) 545 (180)
Special Mission 27,091 5,528 2,806 2,841 2,461 27,245 7,168 2,260 2,302 1,683
T&O 2,446 1,334 (1,632) (1,499) (1,498) 2,639 1,889 (636) (493) (519)
Branding fee − − − − − 625 625 625 625 625
Corporate − − (1,971) (1,552) (1,510) − − (130) 137 202
139,301 26,721 (1,688) 1,774 782
Adjusted Result 144,955 27,612 (1,810) 335 (727)
− − − − − − (3,462) (3,462)
Adjusting items (2,145) (2,145)
Application of IFRS16 − − − − 1,062 − − − − 992
Statutory result 144,955 27,612 (1,810) (1,810) (1,810) 139,301 26,721 (1,688) (1,688) (1,688)
1 Increased unallocated corporate costs reflect unallocated foreign
exchange losses and lower allocation to certain SBU's.
4. Alternative performance measures
The Adjusted result has been arrived at after the following Adjusting items:
Period ended 30 June 2023 Period ended
30 June 2022
$'000 $'000
Exceptional items:
Transaction costs 263 98
Integration and business re-organisation - 244
Legal costs 109 93
Impairment of goodwill − 787
Impairment of assets under construction 98 749
Total exceptional items 470 1,971
Share-based payments expense 63 306
Long-term employee benefits expense 1,026 956
`Amortisation of intangible assets 586 598
Deferred consideration adjustment − (243)
Profit on disposal of subsidiary − (126)
Adjusting items in EBIT 2,145 3,462
Tax related to adjusting items (339) (449)
Adjusting items in profit 1,806 3,013
Transaction costs
Transaction costs during the period of $263k (2022: $98k) relate to corporate
activity of the Group.
Integration and business re-organisation costs
Integration and business re-organisation costs of $244k in H1 2022 relate to
Jet East integration related severance costs.
Legal costs
Legal costs in the current and prior year principally relate to professional
fees in relation to ongoing litigation in respect of legacy cases going back
many years, which are now being successfully closed out.
Impairment of goodwill
The impairment loss in H1 2022 relates to the impairment of the goodwill
associated with the closure of the paint and interior completion operations at
Fort Lauderdale Executive Airport.
Impairment of assets under construction
The impairment loss relates to the impairment of further development costs
incurred during the period in respect of the Business Aviation Centre at
Sharjah International Airport in the UAE.
Share-based payments
Equity-settled share-based payment charges of $63k (2022: $306k).
Other long-term employee benefits
Other long-term employee benefits remuneration charge of $1,026k (H1 2022:
$956k) relates to an incentive plan with payments contractually linked to the
continuing employment of executives of Jet East as well as the business
performance of the combined Business Aviation MRO US.
Amortisation of intangible assets
Acquisition related intangible amortisation relates to acquired intangible
assets (customer relationships and brands) recognised as part of the
accounting for business combinations $586k (H1 2022: $598k).
Deferred consideration adjustment
The deferred consideration adjustment relates to reconsideration of total
consideration payable as part of the Jet East acquisition.
Profit on disposal of subsidiary
The profit on disposal in H1 2022 arose on the disposal of the interest in
Gama Aviation Saudi Arabia.
Tax related to adjusting items
The tax charge related to adjusting items was $339k (H1 2022: $449k).
Organic and constant currency growth
Organic and constant currency growth in Revenue, Gross Profit and EBIT is a
measure which seeks to reflect the performance of the Group that will
contribute to long-term sustainable growth. This growth excludes the impact of
acquisitions or disposals, and foreign exchange movements. Constant currency
growth has been calculated using a constant foreign exchange rate of $1.23 to
£1, being the cumulative average USD-GBP exchange rate for H1 2023, (H1 2022:
$1.30 to £1). Results of acquired and disposed businesses are excluded where
the results include only part-year results in either current or prior periods.
No adjustment has been made in this respect.
A reconciliation from organic and constant currency growth in Revenue to the
most directly comparable IFRS measures is set out below.
For the period ended 30 June 2023 For the period ended 30 June 2022
Revenue % Constant currency growth Revenue Rebase for FX Rebased Revenue
$'000 $'000 $'000 $'000
BA MRO US 70,701 27% 55,473 − 55,473
BA excluding MRO US 44,717 (13%) 53,319 (1,801) 51,518
Business Aviation 115,418 8% 108,792 (1,801) 106,991
Special Mission 27,091 5% 27,245 (1,406) 25,839
T&O 2,446 (2%) 2,639 (136) 2,503
Branding Fee − (100%) 625 − 625
Total 144,955 7% 139,301 (3,343) 135,958
A reconciliation from organic and constant currency growth in Gross Profit to
the most directly comparable IFRS measures is set out below.
For the period ended 30 June 2023 For the period ended 30 June 2022
Gross Profit % Constant currency growth Gross Profit Rebase for FX Rebased Gross Profit
$'000 $'000 $'000 $'000
BA MRO US 14,779 23% 12,045 − 12,045
BA excluding MRO US 5,971 22% 4,994 (84) 4,910
Business Aviation 20,750 22% 17,039 (84) 16,955
Special Mission 5,528 (18%) 7,168 (405) 6,762
T&O 1,334 (25%) 1,889 (101) 1,789
Branding Fee − (100%) 625 − 625
Total 27,612 6% 26,721 (590) 26,131
Gross Profit Margin 19.0% 19.2% 19.2%
Net Debt
A reconciliation of the IFRS financial statement line items that represent the
Net Debt APM is tabulated below.
30 June 2023 31 December 2022
$'000 $'000
Cash 11,560 22,406
Borrowings (23,690) (36,108)
Net Debt before IFRS 16 obligations under leases (12,130) (13,702)
Obligations under leases (53,939) (52,681)
Net Debt (66,069) (66,383)
5. Earnings per share ('EPS')
The calculation of earnings per share is based on the earnings attributable to
the ordinary shareholders divided by the
weighted average number of shares in issue during the period.
Period ended 30 June 2023 Period ended 30 June 2022
Numerator (4,457) (4,061)
Earnings $'000
Loss on continuing operations attributable to ordinary equity holders of the
parent for basic earnings
Adjusting items 1,806 3,013
Loss on continuing operations attributable to ordinary shareholders for (2,651) (1,048)
Adjusted earnings
Denominator
Weighted average number of shares used in basic and diluted EPS 63,961,279 63,739,456
Loss per share on continuing operations (cents)
Statutory - Basic and diluted (7.0) (6.4)
Adjusted - Basic and diluted (4.2) (1.6)
Whilst the average share price for the six months ended 30 June 2023 was
higher than the exercise price of some outstanding options, there is no
dilutive effect as their effect would be anti-dilutive.
6. Borrowings
Jun-23 Dec-22
$'000 $'000
Secured borrowing at amortised cost
Other loans Variance 1,290
Bank borrowings 22,534 34,818
22,534 36,108
Total borrowings
Other loans 276 414
Bank borrowings 8,331 30,811
Amount due for settlement within 12 months 8,607 31,225
Other loans 878 876
Bank borrowings 14,376 4,007
Amount due for settlement after 12 months 15,254 4,883
Jun-23 Dec-22
$'000 $'000
Secured borrowing at amortised cost
Other loans 1,154 1,290
Bank borrowings 22,536 34,818
23,690 36,108
Total borrowings
Other loans 276 414
Bank borrowings 8,317 30,811
Amount due for settlement within 12 months 8,593 31,225
Other loans 878 876
Bank borrowings 14,219 4,007
Amount due for settlement after 12 months 15,097 4,883
On 28 December 2022, the Group secured a new credit facility with Great Rock
Capital Partners Management LLC ("Great Rock"). The facility totals $25m and
comprises a term loan of $6.5m and a RCF of $18.5m. $20m of this facility was
available immediately, with a further $5m available contingent on future
trading performance.
On 25 January 2023 the Group had repaid in full its £20m term loan with HSBC.
On 3 March 2023, the Group received £9.4m ($11.1m) from Close Brothers by way
of a loan secured by a mortgage over the Group's owned aircraft.
At 30 June 2023
Maturity Facility Drawn (local currency) Drawn (presentation currency)
'000 $'000
Great Rocks RCF 28-Dec-26 USD 15,000 USD 6,742 6,742
Close Brothers Term loan 24-Apr-28 GBP 9,218 GBP 9,218 11,672
Great Rocks Term loan 28-Dec-26 USD 5,000 USD 4,625 4,625
Bank borrowings before arrangement fees 23,039
Capitalised loan arrangement fees (503)
Bank borrowings 22,536
The RCF, which is presented in current liabilities, is settled and drawn down
on a cyclical basis.
At 31 December 2022
Maturity Facility Drawn (local currency) Drawn (presentation currency)
'000 $'000
Great Rocks RCF 28-Dec-26 USD 15,000 USD 6,000 6,000
HSBC Term loan 31-Jan-23 GBP 20,000 GBP 20,000 24,124
Great Rocks Term loan 28-Dec-26 USD 5,000 USD 5,000 5,000
Bank borrowings before arrangement fees 35,124
Capitalised loan arrangement fees (306)
Bank borrowings 34,818
7. Related party transactions
During the period, Group companies entered into the following transactions
with related parties who are not members of the Group:
Sale of services Purchase of services
H1 2023 H1 2022 H1 2023 H1 2022
$'000 $'000 $'000 $'000
China Aircraft Services Limited − − 11 -
Air Arabia/Felix Trading Company LLC 136 107 75 137
BBGA Ltd − − 12 14
EBAA − − 5 −
Mr Canning Fok 429 7 − -
M Khalek − 5 − -
The following amounts were outstanding at the balance sheet date:
Amounts owed by Amounts owed to
related parties
related parties
H1 2023 H1 2022 H1 2023 H1 2022
$'000
$'000
$'000 $'000
Air Arabia/Felix Trading Company LLC − 158 132 125
Mr Canning Fok − − − 67
M Khalek − 6 − −
8. Dividends
The Directors do not propose that an interim dividend be paid for the six
months to 30 June 2023 (H1 2022: $nil).
9. Taxation
Period ended 30 June 2023 Period ended 30 June 2022
Statutory result Adjustments Adjusted result Statutory result Adjustments Adjusted
$'000
$'000
$'000
$'000
$'000
result
$'000
Corporation tax:
Current year charge 75 - 75 64 - 64
Deferred tax:
Current year (credit)/charge (162) 339 177 (258) 449 191
Total tax (credit)/charge for the period (87) 339 252 (194) 449 255
The following are the major deferred tax liabilities and assets recognised by
the Group and movements thereon during the current period.
Non-deductible Fixed asset Tax losses Total
acquired and other $'000 $'000
intangibles temporary
$'000 differences
$'000
At 1 January 2023 (1,206) 628 5,472 4,894
Credit/(charge) in year 90 30 42 162
At 30 June 2023 (1,116) 658 5,514 5,056
10. Contingent liabilities
As disclosed in the 2022 Annual Report and Accounts, which were signed on 7
June 2023, the Company had, at that point, very recently received a letter
before action in respect of a possible legal claim against it for alleged
damages in the sum of circa £2.3m. The Board has now had the opportunity to
review this matter, take advice and intends to rigorously defend the position
of the Company. The Board has concluded that it is unlikely that there will be
a material outflow of funds associated with this matter.
11. Subsequent Events
In August 2023 the Group entered into a series of transactions to purchase,
sell and leaseback a helicopter to support its Special Mission contracts in
the UK. The Company anticipates that this is the first of two transactions.
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