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Well, I guess that's it I'm taking the 95 offer and moving on. Can't complain made a few quid. I wish the company well wherever they go. Would have liked to be part of the next stage but a bird in the hand......
There's some really interesting coverage of the latest Air Ambulance acquisition here - and the closing comments imply more acquisitions are in view:
Https://www.helicopterinvestor.com/news/101054/hi-uplift-gama-aviations-last-minute-rescue-of-specialist-aviation-services/
Extracts:
"It was a race against time. Gama Aviation had more than 60 separate transaction documents to finalise with a host of stakeholders in just a few hours. All part of its bid to acquire UK air ambulance provider Specialist Aviation Services before the business would be forced to cease operations.
At risk were life-saving air ambulance services over London and the southeast of England. Without a last-minute deal, the emergency medical service (EMS) ambulance helicopters could have been grounded for weeks if not months"
"The acquisition is designed to accelerate the growth of Gama’s Special Mission strategic business unit (SBU) and complements other recent contract wins, including the Welsh Air Ambulance contract. Gama also recently opened new international operations in the Middle East to augment its fixed-wing aircraft management and MRO services in the region."
"“Long-term contracts that give you regular income and regular cash flow for a long time is very welcome,” he said. “Obviously, that’s provided by government work and special missions work as opposed to the ad hoc nature of the rest of business aviation.”
"Netted about $100m
So, what next for Gama Aviation? The company is always open to promising business opportunities, according to Khalek. And, after the sale last autumn of its US MRO business Jet East, it has the means to invest. Gama acquired the business for about $12m and injected up to $20m of debt. It sold the business for $131m and, after costs, netted about $100m.
While non-compete clauses limit Gama’s short-term acquisition strategy in the US, the company remains hungry for new opportunities. “Debt markets are pretty horrible at the moment and pricing is not very nice,” Khalek told our CJI London conference. “So, we’ve taken the opportunity to use our funding to influence budgets more and look to other financing down the line.”
It remains to be seen what, where and when Gama Aviation will be tempted to make its next acquisition."
You might think the board are being over cautious with our money given one can sell in the mrkt around current price.
On further consideration I see little point in tendering all or part of my shares at 95p as long as the shares stay around 80-100 level. I'm sure the board were cognisant of this pricing the offer as they have.
I'd rather stay and see how the SBU operational synergies plays out in 2024/5 on an expanded aircraft base. I think there's a very good chance the SBU will be the main driver of future revenues for GMMA as the company expect the division to break even in H1'24. I'd be willing to bet the use of helicopter ambulances emergency or otherwise will only increase in the years ahead.
As I haven't any desperate need for funds I may as well stay here than risk my money elsewhere on a chance I pick the right stock. Given my record of stock picks that's not a given by any means!
I expect the board to stand at their posts ready to accept returns at 95p, a small premium to the current bid price. You could be scaled back so best offer your full holding if your minded to fold as round 2 might be adjusted downwards if the economics of the business change.
No mention what the board intend to do. I'd expect them to retain their % and possibly add. Will returned shares go into treasury or be cancelled? As of now I'm minded to sell but will await the tender offer.
Evening all.
Https://www.thetimes.co.uk/article/air-ambulances-can-keep-flying-after-last-minute-rescue-deal-d0vr7njlz
"Gama Aviation agrees to buy Specialist Aviation Services hours before it would have ceased trading
A last-minute rescue deal has been struck to prevent the grounding of most of the air ambulances in the south of England.
Specialist Aviation Services, which provides helicopters and pilots to air ambulance charities in and around London, would have ceased trading on Thursday had its administrators not been able to find a buyer.
Gama Aviation, which has contracts with other air ambulance charities, agreed to acquire the business via a pre-pack sale. It paid ÂŁ280,000, but anticipates that its total outlay, including a cash injection to keep the business running and the costs of the transaction, will amount to nearer ÂŁ3 million.
Had Specialist gone bust, the six helicopters used by air ambulances serving Kent, Surrey, West and East Sussex, Dorset, Somerset, Essex, Hertfordshire and Cambridgeshire would have been grounded. Last year, the six helicopters were involved in more than 5,000 incidents.
Specialist Aviation Services is based at Gloucestershire airport, outside Cheltenham, and had been owned by a Dutch family office. FRP, which was brought in last October to find a buyer, said that the group had been suffering losses “for a number of years”, mainly because of unprofitable contracts that it had agreed.
In an attempt to shore up its finances, Specialist decided to move away from owning its helicopters and instead leased them back. It also set up a maintenance business.
Jonathan Dunn, the other FRP partner appointed as joint administrator, said that the changes had helped but were not enough to get the company into profit. “They were going to have a cash hard-stop,” Dunn said. “We needed to get a sale done before we hit that point.”
Under the deal, Gama will acquire Specialist’s contracts, as well as its six Leonardo AW169 aircraft and all but a couple of its 184 employees. The Civil Aviation Authority has assigned all of Specialist’s regulatory approvals to Gama.
“Our sector, because of the cost base and the regulatory environment and everything else, it’s really hard to do it without scale, and scale needs investment,” Marwan Khalek, 63, Gama’s chief executive, said. “My observation would be that [Specialist] was caught in that no man’s land of not having enough scale and also not having access to investment to scale up.”
Gama, which also charters private jets, intends to fold Specialist into its “special mission” business, which includes air ambulances and medical repatriation flights. That division is expected to turn over about £50 million in the present financial year. The most recent results for Specialist, for 2022, show that it generated revenue of £24.3 million.
“[Specialist] is being bolted on to a scaled business already, so we’re immediately in a bett
Big news late last night - GMAA are scaling up their helicopter special mission division.
They've paid just ÂŁ280k to administrators for a forecast ÂŁ27m of turnover in acquiring Specialist Aviation:
Https://uk.advfn.com/stock-market/london/gama-aviation-GMAA/share-news/Gama-Aviation-PLC-Gama-Aviation-strengthens-Special-Mission-offer/93177831
Of course there are added wrinkles. Transaction costs etc will take the total cost to ÂŁ3m, and there are lease obligations on helicopters and property to take on.
Nevertheless, this could be an absolute bargain price given the likely synergies and cost savings etc, with H2'24 and onwards likely benefiting nicely.
Morning Widster77, first I would say it would be sensible to await the 55p dividend payout then make a decision on whether you think the company can grow the business given the 'tight' margins. Seems to me they are buying revenues in the expectation of bigger growth down the line. Gut feeling the sp is underpinned at c.80-90 as there will be plenty of "flying air miles."
I'm holding until the board have completed the SAS acquisition and decided on the "55" I've no idea why it's taking so long since we completed the sale of Jet East and why we are being kept in the dark on returning cash to shareholders. Buffet would give you a decision on a $BN deal in 5 minutes with a handshake to cement the deal.
Thanks for that post. I wonder when we will hear more about the special dividend being returned to us.
I am not sure whether to stick with gama aviation after this. Will the share price be affected? I wonder when the cut off line was / is. These are all questions I have as an amateur investor. I only have about 1.5% of my portfolio in Gama but they are one of my longest held share. I bought after a motley Fool recommendation when I first started investing. Anyway, enough rambling. These boards are pretty quiet which I think reflects the small number of private investors. Good to have your opinion.
As has been mentioned elsewhere Gama is controlled by a few large holders (see below) who control the majority of the outstanding (64m shares) which leaves ordinary holders with no voice and a lot on trust.
Hutchinson 30%
Marwan Khalek 22%
Rozzi Business 19%
Others 17%
Free float 13% (832,000)
Rozzi Business Inc is incorporated in Panama but who the beneficial owners are is unknown. I'd guess friends of the CEO. Recent news has been positive with the potential acquisition of Specialist Aviation Services which generated ÂŁ24m of revenue in 2022.
Hopefully this will go to remedy the poor or rather 'wafer thin' margins (10%) the company has been making. They need to improve the returns, 10% is too skinny for my liking. I think returning 55p of (dividends?) to holders is a good move particularly for those who think the company
wouldnt use the money wisely.
Warren Buffet never paid a dividend to share holders in his life arguing he could put the money to work more profitably than anyone else. Noone argued with him.
So the Gama board have sensibly absolved themselves from acting like fund managers by returning a proportion of our money for us to invest. That may or may not include buying Gama in the open market once the SAS deal is concluded.
Morning all.
Https://overandunder.substack.com/p/gama-aviation-gmaa?utm_source=substack&utm_medium=email
Extracts:
"Quite honestly, I’m flabbergasted by the RemainCo’s incredibly low valuation. As I already mentioned, this is a business that in FY 2022 had sales of ~$167 million! Furthermore, I’m expecting the new strategy to deliver growing Operating Margins that will eventually reach ~10%. An assumption that values the entire company at less than 2 times Operating Profit - an exceptionally cheap price!"
"Ultimately, given the low price and the strong balance sheet, I think this is one of the best investment setups I’ve seen for a long time. As such, I’m really looking forward to following the company’s recovery into 2024 and beyond."
News that GMAA are in discussions with "a UK-based provider of helicopter emergency medical services ("HEMS") and aircraft repairs and maintenance services ("MRO".
This quite a major acquisition coming with ÂŁ24m of revenues, and would be nicely complementary to its existing air ambulance etc services:
Https://uk.advfn.com/stock-market/london/gama-aviation-GMAA/share-news/Gama-Aviation-PLC-Statement-re-Potential-Acquisition/92980108
On the 3rd November 2023 the company confirmed the sale of Jet East for $131m. Subsequent to that news shareholders have heard nothing as to how the company intends to proceed particularly on the return of cash to holders rumoured to be c.55p per share.
Usually a company will stipulate that those on the register at such and such a date will be entitled to the cash return. I would have thought on the 3rd Nov RNS the company would have said payment will be made to holders on the register (for arguments sake on 3rd Dec'23) will be entitled to any distribution of monies?
Assuming the company know what they are doing as a fractional owner of Gama I think holders are overdue an explanation as to why the delay and who exactly will be entitled to any disbursement. Will all shareholders be treated equally? Should all holders be treated equally given some may have subscribed at previous placings?
The ÂŁ65m Welsh Air Ambulance contract has started earlier than expected (and should therefore help with this year's figures):
Https://www.helicopterinvestor.com/news/100901/gama-aviation-takes-off-early-on-wales-air-ambulance-contract/
You have made a 143% increase on your Gama shares and you should look at your holding in those terms and not the amount. So well done. Must admit I would have expected to have heard some news by now.
The company have said they intend to pay out not less than 55p dividend but to whom and when remains unknown. Unlikely they will go back on that assurance. Really no point in doing anything until holders are updated. I'm holding.
It doesn't look like we will hear anything until the New Year then. Gama shares were one of my first purchases in the early days of Covid. I was pleased with the recent news and I am not sure to continue holding after this or not. It's difficult to find Information as they're only small. Do people think this is a done deal now, with the special dividend? I don't have a lot of shares, about 1300, but they have turned out to be a good deal as I bought thr first batch at 37p.
Any chance of a Chrissy present this week?
I should have been clearer on my post re the bonus dividend (20th Nov), I should have said " I'm thinking early Dec 2024".....
I'm thinking early Dec the board will announce how the proceeds will be distributed to shareholders. I'd also expect some news on how the company intend to invest the balance.
No doubt an acquisition will be on the cards once we're in a debt free position. I have no wish to see Gama pile on debt in a rush to buy revenue.
West Star Aviation is an airframe repair and maintenance organisation with no interest in aircraft operations or MRO sites outside of the USA. So i can see why they would only want the Jet East part of this particular cake
This will only shift once volume arrives. When it does, move will be prompt and sudden.
Yea I agree. I wonder whether our SMB was offered to Jet East and turned down? Anyone going to Farnborough on the 3rd Nov could ask?
I can’t understand stand what they don’t just buy the company as a whole not just a division. They would have gotten the lot for £1.25 a share for sure.
Jet East of course! Maybe Jet Air next?
A year ago the shares traded at 66 valuing the company at c.ÂŁ44m. Much has happened since though looking at the sp you wouldn't think so. In receipt of cash from the sale of Jet Air
the company balance sheet has been improved out of all recognition, most importantly we're debt free and holders can look forward to a cash distribution of 55p almost the sp of the Co a year ago. Doubters will point to selling our most profitable division will put considerable strain on the Co finances going forward as we deplete cash in Bank. Regardless I much prefer to have that problem than being back at 50 where we traded in early October.
The deals already done . 50.3% of the vote already received and voted for the deal.