AIR.L Regulatory News (AIR)

Air Partner PLC

("Air Partner" or "the Group" or "the Company")

Results for the year ended 31 July 2012

Air Partner is a leading provider of private aviation services to industry, commerce, governments and individuals worldwide.

Highlights:

·; Group trading profitably, debt free with a strong cash position

·; Overall reduction in revenue and profit; reflecting challenging trading conditions and tough comparable period

·; US revenues up 14% to £18.1 million (2011: £15.9 million)

·; Private Jet revenues up 8% to £44.0million (2011: £40.7 million)

- driven by selective investment in sales

- JetCard membership at record levels, with 35 new members year on year

·; Commercial Jet broking sector remains challenging

- tough prior year comparable due to Arab Spring and aircraft overcapacity

·; Total dividend for the year up 10% to 18.2 pence per share (2011: 16.5 pence per share)

Mark Briffa, CEO of Air Partner, commented:

"The growth and increased market share achieved across our Private Jet division reflect Air Partner's selective investment in skills that can drive growth in new markets and products. Air Partner's JetCard is one of the most flexible and user friendly private aviation products available in the market today and we are excited about its growth and future potential. Across the Group's three main divisions and 20 international offices, the Air Partner team have worked hard to deliver results in a challenging economic environment, and against a tough comparable period. Looking ahead, the Group has started the financial year with improved efficiency, a clear strategy and a high quality sales team to drive growth. The Board remains confident in the long term future of the Company and its ability to add significant value for all our stakeholders and clients"

11 October 2012

* Underlying profit is profit before non-trading items (see note 3)

Enquiries:

CHAIRMAN'S STATEMENT

As reported at the half year, trading conditions have continued to be challenging reflecting the global economic conditions. However, there are encouraging signs for the future within our Private Jet Division across the Group, and for particular sectors within the Commercial Jet Division. During the year we continued to develop our strategy based on core broking and sales and continued to be profitable.

The Group's prospects as a full service broker have been underpinned through specialist recruitment, talent management, investment in the Private Jet Division and a cost restructuring programme. With a strategy focused on key growth areas where we can increase market share, and as a result of the other actions we have taken this year we are well positioned to continue to deliver value for shareholders.

Results and dividend

Underlying pre tax profit reduced to £3.2 million (2011: £5.7 million) on revenues of £227.6 million (2011: £281.9 million) reflecting the very competitive trading environment and the absence of exceptional world events such as last year's Arab Spring and the Japanese tsunami which boosted profits in the previous financial year. The Board remains confident about the Group's long term prospects and is pleased to propose a final dividend of 12.7 pence per share, to be paid on 14 December 2012 to shareholders on the register on 16 November 2012, subject to shareholder approval at the Annual General Meeting. This brings the total dividend for the year to 18.2 pence per share, an increase of 10% over the prior year and reflects Air Partner's continuing commitment to a progressive dividend policy which is underpinned by strong cash reserves at the end of the year of £15.7 million (2011: £7.2 million).

There have been a number of one off non-trading events during the year, including the resolution of the Federal Excise Tax ("FET") issue, the write down of our only owned aircraft which is being actively marketed for sale and a reorganisation which cost £0.3 million that will deliver significant annual cost savings which, in part, will be reinvested in specialist staff. A review of historical accrual balances also resulted in a release of £1.0 million that were no longer considered to be linked to liabilities to third parties.

Strategy

We have refined our core strategy of concentrating the business on aircraft charter broking, and have prioritised our focus on the areas of Private Jets in all parts of the Group and key sectors such as Oil and Gas and Tour Operators within the Commercial sector. A fundamental review of costs has been undertaken across the business, largely impacting non revenue generating areas. This enables the Company to make key investments in specialist sales recruitment and talent management in order to deliver its strategy.

Board and Governance

As reported last year, Aubrey Adams announced his intention to resign as Chairman following his appointment with The Royal Bank of Scotland. After a search by external agents Russell Reynolds, a shortlist of suitable candidates was sourced and interviewees agreed. Following interviews with this shortlist and after due consideration, the Nomination Committee recommended to the Board my appointment as Non-Executive Chairman, which I willingly accepted in February this year. I would like to thank Aubrey Adams, for his leadership of the business and for a smooth transition.

The Board is committed to high standards of corporate governance and throughout the period under review, the Company complied with all relevant provisions set out in the UK Corporate Governance Code issued in June 2010. The Directors are dedicated to providing strong and effective leadership that allow us to manage the risks we face and grasp the opportunities that lie ahead. In line with best practice corporate governance, all directors put themselves up for re-election at this year's Annual General Meeting.

People

Our greatest asset is our people and teamwork remains the cornerstone of our business. Key to our success is attracting and retaining the right people whilst remaining as efficient as possible. A number of senior appointments were made in the year bolstering an already experienced and talented leadership team to help drive our strategy forward. We are actively managing talent throughout the Group, ensuring that high achievers remain motivated and rewarded as well as providing them with opportunities for development and advancement. The Board recognises the hard work and dedication of all our employees who deliver the high quality service expected of Air Partner whilst working in an increasingly competitive market.

Outlook

As I close my first financial year as Chairman, the Board is cautious in its outlook for the coming year because of the uncertainty of the world economy. However it remains confident that Air Partner is strengthening its position as a global leader for air charter solutions with a clearly defined strategy implemented by focussed, experienced and results-driven individuals. We will continue to focus on driving shareholder value and we believe we are well positioned to grow the business as market conditions improve.

CEO'S REVIEW

The Private Jet division performed strongly in a difficult market with broking revenues increasing by 8% year on year. This growth has primarily been driven by strong performance in ad hoc charters within the UK and US where returns on investment in additional dedicated sales staff is showing good results. This is an excellent achievement within a market that saw European business jet flights decline by 1.7% (EBAA) and is testament to the high quality service we provide to our clients. Similar to prior years, non-governmental contracts account for an increasing share of Group revenues, representing 71% of Group sales (2011: 63%) as governments continue to review and reduce expenditure.

Ongoing economic difficulties and uncertainty continued to lower demand for Commercial Jets and Freight broking. In addition, the number of brokers in the market has not yet diminished which, combined with an oversupply of commercial jets, has led to increased competition for fewer opportunities at lower margins. Trading conditions in Freight also remained difficult with lower levels of market activity.

For the first time in the Group's history, the international offices this year accounted for the majority of total revenues at 52% (2011: 42%) mainly generated from the US which saw 14% growth to £18.1 million (2011: £15.9 million). Whilst this does reflect the reduction in overall UK revenue, it is nonetheless an encouraging factor in the broader development of our business.

In spite of these continuing challenges in Commercial Jets and Freight, Air Partner has once again traded profitably and clients continue to value the high quality service that Air Partner provides. This is particularly true within the Private Jets Division and with our industry-leading JetCard product. The success of this premium offering is atypical of an industry currently experiencing strong pricing competition, and a reduction in service and value. Air Partner, however, remains committed to providing a quality, value-add service. As such we will continue to retain the skills of our core team and invest in experience through talented personnel with proven capability to increase market share.

As reported at the half year, tighter cost controls have been implemented in line with our strategy of focusing on core broking and sales. The Group conducted a structural review of the business with particular focus on non revenue generating areas. As a result we have removed £1.4 million of 2011/2012 costs from the 2012/2013 cost base. Recruitment in 2011/2012 will reduce this saving to £0.9 million. Any 2012/1013 recruitment will be largely self funding and targeted at strategic priority areas. The review resulted in £0.3 million of restructuring costs, comprised principally of redundancies, which have been classified as non-trading items.

Work to develop an integrated financial and customer relationship management system is progressing well. This system will be launched next year delivering a step change improvement in Air Partner's ability to understand our clients and their requirements, while measuring conversion ratios and sales activity more accurately. Alongside this new system, Air Partner successfully renewed the ISO 9001 accreditation in France in June with the other European offices on course to achieve their accreditation for the first time next year.

During the financial year, Air Partner also undertook a brand refresh, better focusing the business divisions' look and feel to the requirements of their clients - the benefits of which are reflected in this report and on our website. The 51 year-heritage of the Air Partner brand remains, retaining the Group's core brand principles of reliability, innovation, transparency and superior experience, while each division is now instantly recognisable with sub marques to help distinguish the diversity of the Group's product offering.

Strategy

Core broking remains at the heart of what we do and we will continue to focus on growing revenue and client numbers across our product range. During the year we have tightened and clarified our existing strategy by identifying those areas of the business able to provide the best growth opportunities going forward. More specifically, the Board has identified four clear areas where the Group will seek to grow market share significantly over the next three years. We will concentrate on aggressively growing our market share in the US, growing our Private Jet broking in Europe, proactively marketing within the Oil & Gas and Tour Operator sectors for Commercial Jets and seeking to grow our presence in high growth emerging markets through strong local partnerships.

In the US we believe our reputation, history, global reach and Royal Warrant puts us in a strong position to win significant business in this region. This will be achieved through ad hoc charters and JetCard sales within Private Jets, and in the Oil & Gas sector for Commercial Jets.

Within Continental Europe our penetration into the Private Jet broker market is relatively low at 2% in a market worth an estimated £650 million. Most of our existing offices have a Commercial Jets heritage, but investment into the Private Jet offering on the continent has been well rewarded, both in more established as well as new growth markets. As part of our strategy we have created a Private Jets Division for Continental Europe, reporting into one manager, with an increased focus on developing sales through ad hoc broking and JetCard, primarily in those regions that have the strongest private jet traffic flows. As a result we expect to take market share in Europe and grow sales quickly.

As the search to fulfil worldwide energy needs moves into more difficult and challenging geographies, Air Partner is seeing greater demand for bespoke, specialised transport solutions and this trend is set to continue. Whilst the Oil and Gas sector has long formed a part of our client base, a focused and targeted sales campaign as well as specialist recruitment is underway to improve market share and to position the Group as a recognised leader in the energy field from Houston to Aberdeen and Papua New Guinea.

With a focus on high growth emerging markets, we are looking to strengthen further our global network in Asia and South America, where demand and supply are attractive. We are seeking to build relationships with strong commercial partners so that costs and risks of international expansion are effectively managed. Over the longer term due to higher available rates of return we may consider the establishment of wholly owned offices where there is a proven business case. A strategic partnership was launched in June this year with InterGlobe Established Private Limited (The ESTD) in New Delhi providing a range of private aviation products in India, based on a low cost model. We believe the partnership with The ESTD is an excellent example of a low cost, low risk entry into an emerging market.

Our focus on these key strategic areas will be fully monitored and measured through performance indicators enabling us to react to changing circumstances while protecting shareholder returns. Air Partner will continue to invest in its people, through recruiting key industry talent that fits our strategy and ensuring we retain our existing talent within the business.

Divisional Review

Private Jet Broking

Revenue grew by 8% to £44.0 million (2011: £40.7 million) an increase derived through investment in sales, smarter broking, improved client care and leveraging our unique brand attributes. A slight decrease in underlying profit before tax of 15% to £1.0 million (2011: £1.2 million) is a result of increased overhead allocation based on the division's contribution to Group revenues. Revenue from our US Private Jet broking exceeded £9.2 million in the year, an increase of 67% on the previous year with client numbers rising by 32%.

Globally, Air Partner sold 35 new JetCards and with existing client renewal rates increasing by 9% this boosted JetCard membership to record levels. This achievement in JetCard sales demonstrates that clients recognise the advantages of the product over fractional ownership schemes appreciating the flexibility provided by this service. The number of clients switching to JetCard from such schemes is testament to its benefits over a scheme that ties clients in whilst offering little transparency in pricing.

Our innovative approach to the Spanish market is a good example of how we have adopted more effective business models to access new territories. By using local sales resource supported by the full strength of the UK's established broking team, we have succeeded in unlocking genuine potential in what is widely regarded as a depressed and mature charter market. We expect similar results from our Russia-based sales team where, again in combination with specialist brokers based in the UK, recruiting key local talent has provided a step change in our already successful engagement in this market. The entire Private Jet team now includes a wealth of experience and talent that will help us to build for the future.

Quality and flexible premium services, as well as our robust financial position, listed company status and Royal Warrant to HM Queen Elizabeth II are of paramount importance to high net worth individuals who have continued to charter aircraft despite economic uncertainty. This differentiates Air Partner as a market leader and the increase in private jet revenues continues to show that clients trust and believe in us.

Commercial Jet Broking

Revenue decreased by 18% to £138.9 million (2011: £170.0 million) and a 51% decrease in underlying profit before tax to £1.6 million (2011: £3.3 million). This reflects the wider economic malaise across most geographies and sectors as well as a decline in the number of non-repeatable charters such as those undertaken during last year's Arab Spring and the Japanese tsunami. As reported at the half year, worldwide commercial jet broking experienced a shift in fortunes compared to the prior year, migrating from a shortage of wide-bodied aircraft to an oversupply, this combined with a decrease in the number of governmental contracts and an increase in competition. This in turn led to highly competitive tendering activity which placed greater pressure on margins and subsequently profits.

Our Commercial Jet Division continued to be successful in winning tenders for contracts to supply governments and non-governmental organisations with both single and multi-flight contracts awarded. Sales to niche tour operators in France, Italy, Germany and Austria continued to grow with new opportunities being sought and contracted within the UK market.

Paul Argyle was appointed during the year as Director of UK Commercial Jets from Flight Directors Group where he was CEO, having led the business's development since its launch in 1984. Paul was identified as part of our key talent search and brings significant broking experience, leadership skills and a strong track record in new business development that will help move the Division forward. The Division has re-organised and refocused sales efforts around specific industry segments where there is higher potential for revenue growth. This has enabled dedicated broking teams to develop a deeper understanding and expert knowledge of those industries and will provide the impetus for greater penetration in the Oil and Gas sector.

The objective for the year under review was to develop stronger relationships with existing clients and suppliers, alongside a drive to identify and serve more clients across a wide spectrum of the charter market which we achieved. We dealt with many varied requests this year from repatriating stranded cruise ship passengers from South East Asia, providing tour transport for music stars to supporting major global sporting events and product launches. There have been encouraging signs of growth in the Conference and Incentives sector across the Group with opportunities coming particularly from organisations involved in the Automotive sector. Our German office co-ordinated over 100 flights for a leading German automotive manufacture to launch their new model in Ibiza and Alicante, as well as 30 flights for the 2012 Euro football championships in Poland and Ukraine. The niche tour operator business and football team charters in Italy helped to increase market share in that country.

Freight Broking

Revenue was down 38% year on year to £25.9 million (2011: £41.8 million) and underlying profit before tax down by 41%, to £0.3 million (2011: £0.6 million). The worldwide global freight market has experienced a very tough period compared to last year and there has been no real improvement in worldwide freight levels over the last twelve months. We do not anticipate that the air charter market for freight will start to recover significantly in the short term and in response we have lowered the team cost base to reflect these market conditions.

In October last year Air Partner worked closely with the UK Government's Department for International Development (DFID) to fly emergency relief aid to Turkey, following the 7.2 magnitude earthquake that devastated the Van province. The dedication and specialist knowledge of our freight team, combined with extensive broking experience, ensured quick and efficient delivery to those who needed it most.

The Division is building on the success of Air Partner's Time Critical product as it continues to gain traction and is securing repeat business. This product, along with our recent Freight Calculator app (the first charter broker to offer such a product) continue Air Partner's constant efforts to provide clients with innovative technology to assist them anytime, anywhere, at a moment's notice.

Support Services

The contribution to Group revenue from Air Partner's ancillary services (Emergency Planning Division, fuel, aircraft sub-leasing and an in-house travel agency) decreased by 36% to £18.8 million (2011: £29.5 million) with underlying profit before tax reducing by 54% to £0.3 million (2011: £0.6 million). This reduction is indicative of a very competitive market especially within aircraft sub-leasing and fuel. Although still very important as part of the wider offering, the Group took a conscious strategic decision this year to focus these services as support functions to the core business rather than further investing in them as standalone businesses.

Outlook

Under our clear, simple and focused strategy we expect Private Jets to perform well as clients continue to trust and rely on us and, coupled with the investment in the US and Europe, we will continue targeting growth in our market share. The investment into the Oil and Gas sector in Commercial Jets should help to offset those areas that are currently experiencing tough market conditions. Strengthening our global network over the long term will also enable us to grow our presence in emerging markets in a low cost, low risk manner.

Overall, we maintain a cautious view for the year ahead but I have every confidence that in spite of the low visibility inherent in our industry, we are positioning the Group to achieve growth in our key target areas that will cement Air Partner's position as a leading global aviation broker.

Financial information

This preliminary announcement of annual results was approved by the Board of Directors on 10 October 2012. The announcement has been prepared solely to provide additional information to shareholders, in accordance with the UK Listing Authority's Disclosure and Transparency Rules. It should not be relied on by any other party, for any other purpose.

The financial information in this preliminary announcement which comprises the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of financial position, consolidated statement of changes in equity, consolidated statement of cash flows, summary accounting policies and related notes does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006.

Statutory accounts for the year ended 31 July 2012 have not yet been delivered to the Registrar of Companies. The auditor's reports on the financial statements for the years ended 31 July 2012 and 31 July 2011 were unqualified and did not contain a statement under Section 498 of the Companies Act 2006. The financial statements for the year ended 31 July 2011 have been delivered to the Registrar of Companies.

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

Lead times for ad-hoc bookings are measured in days or weeks, rather than months. 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. Economic uncertainty affects corporate, government and individual clients and affects the quality of supply of aircraft as operators consolidate or leave the market. These are trends outside the Group's control but the strategy remains to diversify to address seasonality and changes in the client mix.

Principal risks and uncertainties facing the Group

Aircraft charter broking on the Air Partner model can be classed as a relatively low financial risk business, in that the broker sells capacity on aircraft owned and operated by a third party and contracts are normally placed as mirrored transactions. The Group does not have any contractual arrangements with any significant individual or company which are essential to continuation of the business.

The Board has reviewed the processes for identification and reporting of risks during the year, including operational aviation-related risks (shortages 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 cashflow management. The profile of both financial and operational risks varies from time to time. The principal risk to the Group's business stems from the ongoing financial position of clients and the general economic conditions in which they operate, affecting their willingness to charter. Ad-hoc charters are likely to continue to be impacted by serious economic instability in the major world markets.

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 responsibility statement below has been prepared in accordance with the Company's full annual report for the year ended 31 July 2012. Certain parts thereof are not included in this announcement.

Each of the directors serving at the date of approval of the accounts confirms that, to the best of his knowledge and belief:

·; the financial statements, which have been prepared in accordance with IFRS as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and financial performance of the Group; and

·; the Chairman's Statement and the CEO's Review, together with the supporting notes, give a fair review of the Group, including a description of the principal risks and uncertainties faced by Air Partner plc.

The responsibility statement was approved by the Board of Directors on 10 October 2012.

Air Partner PLC

("the Group" or "the Company")

Preliminary Announcement of audited results for the year ended 31 July 2012

Consolidated income statement

for the year ended 31 July 2012

* Before non-trading items (see note 3)

Consolidated statement of comprehensive income

for the year ended 31 July 2012

Consolidated statement of financial position

as at 31 July 2012

Consolidated statement of changes in equity

for the year ended 31 July 2012

The translation reserve represents the accumulated exchange differences arising from the impact of the translation of subsidiaries with a functional currency other than pounds Sterling.

The share option reserve relates to the accumulated costs associated with the outstanding share options issued to staff but not exercised.

Consolidated statement of cash flows

for the year ended 31 July 2012

1 GENERAL INFORMATION, BASIS OF PREPARATION AND ACCOUNTING POLICIES

General information

The Company is a limited liability company incorporated and domiciled in England and Wales under registration number 980675. 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. This condensed consolidated financial information was approved for issue on 10 October 2012.

This condensed consolidated financial information does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 July 2012 were approved by the board of directors on 10 October 2012, but have not yet been delivered to the Registrar of Companies. The auditor's reports on the financial statements for the years ended 31 July 2012 and 31 July 2011 were unqualified and did not contain a statement under Section 498 of the Companies Act 2006. The financial statements for the year ended 31 July 2011 have been delivered to the Registrar of Companies.

Basis of preparation

The financial information has been extracted from the audited financial statements for the year ended 31 July 2012 and has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards ("IFRS") as adopted for use in the European Union in accordance with EU law (IAS regulation EC1606/2002) and those parts of the Companies Act 2006 applicable to companies reporting under IFRS. However this announcement itself does not contain sufficient information to comply with IFRS. The Company expects to publish full financial statements that comply with IFRS in due course.

Accounting policies

Except as described below, the accounting policies applied are consistent with those of the annual financial statements for the year ended 31 July 2011, as described in those annual financial statements.

Non-trading items

The presentation of the income statement and related notes has been amended to show the Group's underlying income and expenditure separately from total income and expenditure. For this purpose, underlying income and expenditure is defined as total income and expenditure less non-trading items, being those items that in the directors' view are required to be separately disclosed by virtue of their size or incidence to assist in understanding the Group's performance. The directors believe that this amended presentation assists in understanding the Group's performance.

The same presentational change has been made to the comparative information in the income statement and related notes. The non-trading items in the comparative period were not separately disclosed as exceptional items in the prior year financial statements as, in the directors' view, they were not material.

Adoption of new and revised Standards

The following new and revised Standards and Interpretations have been adopted in the current year. Their adoption has not had any significant impact on the amounts reported in these financial statements but may impact the accounting for future transactions and arrangements.

- IAS 24 Related Party Disclosures (revised); effective for periods beginning on or after 1 January 2011. The revised standard clarifies the definition of a related party.

- Improvements to IFRSs (issued May 2011) - certain improvements effective for periods beginning on or after 1 January 2011. The amendments to IAS 1 Presentation of Financial Statements clarify the presentation choices for other comprehensive income. The amendments to IAS 34 Interim Financial Reporting provide clarification about disclosures of significant events and transactions during the interim period. The amendments to IFRS 7 Financial instruments: Disclosures clarify the disclosure requirements for certain types of financial instrument. The amendments to IFRIC 13 Customer Loyalty Programmes clarify the treatment for the fair value of award credits. The amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards are not relevant to the Group.

- IFRS 7 (amended) Financial instruments: Disclosures; effective for periods beginning on or after 1 July 2011. The amendments enhance the derecognition disclosure requirements for transfer transactions of financial assets.

- IFRIC 14 Prepayments of a Minimum Funding Requirement (amended); effective for periods beginning on or after 1 January 2011. The amendments apply to prepayments of minimum funding requirements for defined benefit pension schemes.

New standards, amendments and interpretations in issue but not yet effective

The following standards, amendments and interpretations to existing standards have been published and are not mandatory for the current accounting period, and have not been early adopted by the Group:

- IAS 1 Presentation of Financial Statements; effective for periods beginning on or after 1 July 2012;

- IAS 12 Income taxes - Recovery of Underlying Assets (amendment); effective for periods beginning on or after 1 January 2012;

- IAS 19 Employee Benefits (amended); effective for periods beginning on or after 1 January 2013;

- IAS 27 Separate Financial Statements and IAS 28 Investments in Associates and Joint Ventures (revised); effective for periods beginning on or after 1 January 2013;

- IFRS 9 Financial Instruments; effective for periods beginning on or after 1 January 2015;

- IFRS 10 Consolidated Financial Statements; effective for periods beginning on or after 1 January 2013;

- IFRS 11 Joint Arrangements; effective for periods beginning on or after 1 January 2013;

- IFRS 12 Disclosure of Interests in Other Entities; effective for periods beginning on or after 1 January 2013;

- IFRS 13 Fair Value Measurement; effective for periods beginning on or after 1 January 2013.

There are no standards and interpretations in issue but not yet adopted which, in the opinion of the directors, will have a material effect on the reported income or net assets of the Group or the Company.

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 in the period of the revision and future periods if these are also affected.

Third party claims

An assessment has been made of the potential costs of settlement of third party claims received following the closure of Air Partner Private Jets Limited, based on discussions with advisors and the outcomes of similar legal cases. There is no guarantee that such claims will be successful, nor that the full amount of the provision will be required.

Impairment of aircraft

During the year, the carrying value of the Group's sole owned aircraft was written down to management's estimate of its fair value less costs to sell, based on a third party valuation. It is possible that the aircraft will not be sold, or that the sales price will differ from the third party valuation, or that the selling costs will not equal management's estimates.

Accruals related to air charter contracts

When revenues and costs for air charter contracts are initially recognised, estimates may need to be made in order to accrue items of income and expenditure that have not been invoiced. These estimates may not reflect the ultimate outcome. During the year, an extensive review of historical accruals related to air charter contracts was performed and as a result a number of accruals were reversed. See note 3 for further details.

2 SEGMENTAL ANALYSIS

The services provided by the Group consist of hiring different types of aircraft for charter to its clients and related aviation services. The Board reviews the performance of the services that are provided by the Group on the following basis: Commercial Jet Broking, Private Jet Broking, Freight Broking and Other Services (which includes operations and travel services). Each of these components has been identified as an operating segment.

Sale transactions between operating segments are carried out on an arm's length basis and all revenues, results, assets and liabilities which are reviewed by the Board are prepared on a basis consistent with those that are reported in the financial statements.

The Board does not review information about the amounts of additions which are made to the operating segments' non-current assets. Assets and liabilities are not reviewed at a segmental level, therefore these are not disclosed.

Discontinued operations comprised the activities of Air Partner Private Jets Limited, which was put into administration on 15 March 2011.

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

During the year, the segmentation of profit before tax in the information provided to the Board has been updated to more fairly reflect the allocation of overheads to different service categories. The segmentation of profit before tax for 2011 in the table above has therefore been restated to reflect this change.

The Company is domiciled in the UK but, due to the nature of the Group's operations a significant amount of revenue from external customers is derived from overseas countries. The Group attributes revenue to individual countries based upon the location of the assets used to generate those revenues. Apart from the UK, no single country is deemed to have material revenue and non-current asset levels, but the Board continues to monitor potential reportable segments.

The Board also reviews information about operating segments on a geographical basis based on the 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:

3 NON-TRADING ITEMS

During the year, the Group wrote back £1,029,000 of credit balances from the balance sheet, resulting in a gain within administrative expenses in the income statement. These balances were estimates of invoices and credit notes for revenues and costs related to air charter contracts. Following an extensive review in the year, the Group has concluded that these balances should no longer be retained. This review is now complete.

At the prior year end, a provision of £1,000,000 was held in relation to unpaid Federal Excise Tax due on certain flights contracted by the Company outside the US but involving a US destination. During the second half of the year, the Company and its US tax advisors concluded discussions with the relevant authorities, resulting in payments totalling £468,000 including interest for late payment and professional fees. The remaining provision of £532,000 has been written back to the income statement, resulting in a gain of £443,000 within administrative expenses and a gain of £89,000 within finance expense (2011: £196,000 increase in administrative expenses and £24,000 increase in finance expense).

The carrying value of the Group's sole owned aircraft was written down by £335,000 (2011: £186,000) to its fair value less costs to sell of £690,000 based on a third party valuation. The aircraft is being actively marketed for sale.

The completion of the Group's cost reduction programme during the year resulted in a one-off restructuring cost of £319,000 (2011: £nil), including redundancy payments, external legal advice and outplacement costs. These costs were included within administrative expenses.

4 TaxATION

Corporation tax in the UK was calculated at 25.33% (2011: 27.33%) of the estimated assessable profit for the year. Taxation for other jurisdictions was calculated at the rates prevailing in the respective jurisdictions.

The charge for the year can be reconciled to the profit per the consolidated income statement, as follows:

The UK corporation tax rate decreased from 28% to 26% from 1 April 2012. The impact on the current year's tax charge is shown above.

Further reductions to the UK corporation tax rate have been announced. A reduction to 23% with effect from 1 April 2013 was substantively enacted on 17 July 2012 and the deferred tax balance has been adjusted to reflect this change.

A further reduction to 22% on 1 April 2014 is proposed and will be applied in the Group's financial statements as the legislation is substantively enacted. This change is not expected to result in a material change to the Group's net assets.

5 Dividends

6 Earnings per share

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

7 Net cash INFLOW / (outflow) from operating activities