AIR.L Regulatory News (AIR)

LEI: 213800JLR6YIRMSCUS98

22 February 2021

AIR PARTNER PLC("Air Partner" or "Group")

SHAREHOLDER UPDATE AND DIVIDEND POLICY

Air Partner, the global aviation services group, is today publishing an update to shareholders, including details of its dividend policy. This re-affirms the Board's expectation, as previously stated in the Group's trading update of 20 January 2021, to announce underlying profit before tax of no less than £11.5 million for the year ended 31 January 2021 (FY 2020: £4.2m).

Review of the financial year to 31 January 2021

Air Partner has enjoyed a strong year, driven by exceptional levels of COVID-19 related activity in our Group Charter and Freight divisions in H1, notably evacuations and the transportation of PPE. Conversely, Private Jets and Safety & Security were negatively impacted by government restrictions and airport closures globally. Performance was mixed across geographies, with the US being the standout performer.

During the first half of the year, the Group implemented cost cutting initiatives and successfully completed a share placing, raising gross proceeds of £7.5m. These actions strengthened the business ahead of further COVID-19 uncertainty and lower trading levels, as demand for evacuations and PPE flying significantly decreased. However, after the half year we did see tentative signs of recovery in Safety & Security and a rise in enquiries for Private Jets, particularly in the US.

Asset purchase of CHS Engineering Ltd trading assets

At the end of 2020, we acquired the trading assets of CHS Engineering Ltd (CHS) after the business went into administration. CHS offered consultancy services for airports and logistics operations, remote condition monitoring and baggage system testing, and these services will now be incorporated into Air Partner's Managed Services offering and trade as Air Partner CHS. This is a small acquisition, where, by moving quickly, we have been able to add to our customer offering. The business is not expected to be profit enhancing until the second half of the year when airports remobilise post lockdown.

Cash position

As at 31 January 2021, the Group has no debt and cash in the bank of £9.9m. Excluding significant customer deposits and JetCard cash, normalised cash was £8.3m. The Group has access to a total debt facility of £14.5m, comprising of a £1.5m overdraft and a £13.0m revolving credit facility (RCF), which remain undrawn. The RCF is due to expire in February 2023.

Dividend

The Board has reviewed its dividend policy so as to ensure that the Group has the ability to pay a sustainable and growing level of dividends over time. Having announced the reinstatement of dividends at the interim results in September with a payment of 0.8 pence per share, it is the Board's current intention to announce a final dividend of 1.6 pence per share at the time of the full year results, subject to audit. This makes a total of 2.4 pence per share for the year as a whole.

In future, and looking beyond the extraordinary conditions created by the pandemic, the Board will target dividend cover of 3.0 to 3.5 times earnings in a normal year, after adding back non-cash related exceptional items such as amortisation of acquired intangibles.

Current trading and outlook

The Group has made a profitable start to the year, although clearly lower than the exceptional earlier months we experienced in our last financial year as a result of pandemic related activity. Encouragingly, the US business remains buoyant across all product lines and performance in our global Group Charter and Freight divisions continues to improve and track towards management's expectations. However, Private Jets in the UK and Europe remains impacted by travel restrictions and quarantine measures. In the Safety & Security division, Security has started to show signs of recovery as airports start to build towards increased passenger numbers over the summer, but the pandemic continues to obscure visibility for Safety.

The Board's current base-case expectation for FY22 is to deliver profits in line with the financial year ended 31 January 2020, despite the continued global restrictions on passenger movements.

The global charter business has consistently been a volatile industry, with low visibility, and we are seeing that now more than ever. However, we have a strong balance sheet and are well placed to benefit from the eventual re-opening of the travel industry across both our Charter and Safety & Security divisions. We have a strong portfolio of global aviation services, with diverse exposure to sectors and geographies, and we expect to continue to see a growing contribution from markets outside the UK and Europe, particularly the US. A further update will be provided with our full year results.

ENDS

About Air Partner:

Founded in 1961, Air Partner is a global aviation services group providing aircraft charter and aviation safety & security solutions to industry, commerce, governments and private individuals, across civil and military organisations. The Group has two divisions: Air Partner Charter, comprising Group Charter, Private Jets, Freight and Specialist Services; and Air Partner Safety & Security (formerly Consulting & Training), which comprises Baines Simmons, Redline Assured Security and Managed Services.

Group Charter charters large airliners to move groups of any size. Private Jets offers the Company's unique pre-paid JetCard scheme and on-demand charter for up to 19 people. Freight charters aircraft of every size to fly almost any cargo anywhere, at any time. Specialist Services comprises Air Partner's other aviation services that complement its Charter business: Remarketing, ACMI, scheduled group travel, tour operations, air evacuation and flight operations.

Baines Simmons offers aviation safety management and fatigue risk management. Redline Assured Security delivers government-standard security training, consultancy and solutions to regulated, high value and high threat environments. Managed Services offers wildlife hazard management and aircraft registry services.

Air Partner has 16 locations across three continents, with its headquarters located alongside Gatwick airport in the UK. The group employs around 450 aviation professionals globally and operates 24/7. Air Partner is listed on the London Stock Exchange (AIR) and is the only publicly listed air charter broker and aviation safety & security consultancy. It is ISO 9001:2015 compliant for commercial airline and private jet solutions worldwide.

More information is available on the company's website (www.airpartner.com).