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5 Jun 2009 07:00
Air Partner PLC
("Air Partner" or "the Group")
Interim Management Statement
("IMS")
Air Partner, a leading provider of private aviation services to industry, commerce, governments and private individuals worldwide, today releases its second interim management statement for the year ending 31 July 2009.
At the half year results released on 25th March 2009 the Group reported difficult trading conditions with reduced visibility and shorter lead times. The Board also cautioned that Q3 trading was poor and it expected the rest of the second half of the financial year to be difficult and challenging. This has proved to be the case, with reduced demand and weak pricing prevailing across all markets.
Despite the diverse nature of Air Partner's business, the global recession has now impacted each of its geographic and product markets, and many of its clients. While the core broking divisions remain profitable and cash generative, Group sales are currently down 15%, although there is a wide spread of local variance ranging from sales 44% down in the USA, to up 40% in Germany. In the UK, which represents half of all Group activity, sales are currently down 22%, due to short term adverse pricing as the full force of the recession is felt across the industry. While forward orders are currently 31% lower than the same period last year, poor visibility continues to hamper the Group's ability to forecast.
The greatest impact of the market downturn is felt in the private jet operating company. In March the company reported early evidence of increasing high net worth flying; while this provided some optimism for the summer season, this trend did not develop. The continuing combination of reduced demand and weaker pricing, overlaid onto fixed costs, has converted last year's earnings into a substantial loss. For this reason, the Board expects the Group's profits to be below current market expectations. Accordingly the Board has taken action to significantly reduce costs at Biggin Hill, sizing the business to meet the demands of the current market conditions. These cost savings will positively impact the next financial year, and further details will be provided at the year end results. It is important to emphasise that the strategy of having in-house control of private jet capacity provides important additional benefits to the core business earnings.
Air Partner's cash generation remains strong and the Group continues to be profitable, debt free, and with a current cash position of £18m. The Board is confident that Air Partner is well positioned to weather the economic downturn that is currently universally impacting the entire sector.
5th June 2009
ENQUIRIES:
Air Partner PLC
David Savile Tel: 01293 844805
Temple Bar Advisory Tel: 0207 002 1080
Tom Allison Tel: 0778 999 8020
Notes to editors:
Please ensure "Air Partner" is written in its correct singular form, not in the plural.
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