Last checked at 19 Jul 2018 07:00
19th July 2018
Gama Aviation Plc (AIM: GMAA)
("Gama Aviation", "the Company" or "the Group")
Half Year Trading Update
In advance of its half year results, Gama Aviation Plc, the global business aviation services provider, today provides an update on trading for the half year ended 30 June 2018 and confirms that the Group's expectations for the full year remain unchanged.
Gama Aviation will release its half year unaudited financial statement on Monday 24th September 2017.
Trading
Trading conditions in Europe were somewhat challenging during the period whilst those in the US continued to support strong growth. Consequently, the Group's performance during the first half was flat overall.
Air Division
The underlying performance of our EU air division was stable, despite the challenging trading conditions in the region, and we expect this stable performance to continue during the second half. The US air associate continued to deliver strong organic growth enhanced by the continuing development of the Wheels Up contract. The Middle East and Asia air divisions continued to make steady and encouraging progress in scaling up their operations.
Ground Division
The performance of our EU ground division was somewhat mixed during the period. However, a pick up in orders and contract wins in base maintenance and design during the period are expected to come through in the second half of the year delivering decent growth for the full year. Preparations for our recently announced move to Bournemouth International Airport are progressing well and remain on track for completion, as planned, in October. The move will allow the division to double its engineering capacity, improve operational efficiency and flexibility and extend its service offering.
The US ground division delivered strong organic growth during the period with new clients continuing to be attracted to its line maintenance centres. The division expects to continue to deliver strong growth for the full year.
In the Middle East, the ground division had a weak start to the year affected by regional events. The market has now stabilised and together with prompt action by management to adjust the cost base expectations for the division's full year performance remain unchanged. In Hong Kong, our collaboration with CASL is scaling up its activities and the division is expected to make a positive contribution to the Group this year.
2018 strategic plan update
The Group remains on track to deploy the proceeds of the recent equity placing and deliver on its strategic growth plan for 2018.
In the US, the ground division's strategy is to enhance and extend its client service offering to both broaden its client base and capture more of its clients' total maintenance expenditure. At the time of the equity placing, the Group set out its plans to add base maintenance capacity in the Western and Eastern corridors to complement its successful and fast-growing pan-US line maintenance network. Accordingly, the division will expand capacity at its current line maintenance operation in Las Vegas to develop a base maintenance capability to serve the Western US market. The division is also in advanced discussions to secure hangar capacity in south Florida to develop its base maintenance capability to serve the Eastern US market.
In addition to developing these two base maintenance centres which will be capable of delivering the full range of base maintenance services, the division will also be expanding its base maintenance capabilities at five of its other line maintenance centres (New York Teterboro, New York White Plains, Palm Beach International, Dallas Love Field and Los Angeles Van Nuys). These facilities will provide a limited range of base maintenance services which will, the division believes, be very attractive to clients seeking quick turnaround times from proximate locations. The division is also continuing to expand the reach of its line maintenance network with the recent addition of facilities at Chicago and Miami Opa Locka airports.
All of these facilities remain on track to be operational before the year end and will, therefore, be revenue generating as planned in 2019.
In Sharjah, the development of the Business Aviation Centre continues as planned with the recent award of a contract for the earthworks which will commence in August. A contract for the detailed design and construction is expected to be awarded in the very near future. Overall, the development remains on track for completion in the fourth quarter of 2019.
The Group continues to pursue an active pipeline of acquisition opportunities with a number in advanced stages of discussions.
As stated at the time of the placing, £1.5m of the proceeds have been used to pay down legacy high interest debt during the period.
A further update on the implementation of our strategic plan will be provided within the half year results statement.
Trading Outlook
With strong growth in the US, steady and encouraging progress in scaling up our Middle East and Asia operations and stable trading in the EU market, supplemented by new business wins in the EU Ground division, the Group's expectations for the full year remain unchanged.
Marwan Khalek, Chief Executive Officer commented:
"I am pleased to report continuing progress in our operational performance and in the implementation of our 2018 strategic plan. We have been busy building business capabilities in the US to strengthen our market position in that key market, and have progressed our plans to scale up our Middle East and Asia operations. Despite some challenges in Europe during the first half, we have been winning new contracts and orders in the Ground division which gives us confidence in the outlook for our full year results. We continue to evaluate several potential acquisitions, in line with the criteria set out at the time of our equity placing, and are in advanced discussions on a number of these. We are confident that we will deliver on our full year expectations and future growth plans consistent with our strategic objectives."
ENDS
For further information please visit www.gamaaviation.com or contact:
Gama Aviation Plc +44 (0) 1252 553029
Marwan Khalek, Chief Executive Officer
Camarco +44 (0) 20 3757 4992
Ginny Pulbrook
Geoffrey Pelham-Lane
Tom Huddart
Jefferies International +44 (0) 207 029 8000
Simon Hardy
Will Soutar
Gama Aviation - Notes to Editors
Gama Aviation Plc (AIM:GMAA) is a global business aviation services group that specialises in providing support for individuals, corporations and government agencies; allowing them to deliver on the promises they make.
The Group's services are split into two divisions: Air and Ground. Air services include aircraft management, special mission support and charter. Ground services cover aircraft maintenance services, aircraft modification design and installation, and Fixed Base Operations (FBO).
More details can be found at: http://www.gamaaviation.com/