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Gama Aviation PLC (GMAA)

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Monday 29 October, 2018

Gama Aviation PLC

Trading Update

RNS Number : 5017F
Gama Aviation PLC
29 October 2018
 

 

29 October 2018

 

Gama Aviation Plc (AIM: GMAA)

("Gama Aviation", "the Company" or "the Group")

Trading Update

 

Gama Aviation Plc, one of the world's largest business aviation service providers, today announces a trading update for the full year to 31st December 2018.

 

At the time of the H1/18 interim results substantial growth was anticipated in the 2nd half of the year. However, with Q3 delivered and with better visibility for the full year, trading in certain divisions has not improved sufficiently to deliver the full year expectations.

As a result, whilst no individual division is significantly weaker, in aggregate there is a material impact, and accordingly the board now expects the full year underlying operating profit to be $3m below its original expectations. Nevertheless, the investments made into the capacity and capability of the business during 2018 have progressed well and provide a robust operational baseline for continuing the execution of our strategy into 2019.

 

Trading update 

 

Air Division

 

The performance of our Europe, Middle East and Asia air divisions remains stable, with these businesses performing broadly as expected, despite difficult trading conditions in Europe and the Middle East. Commercial progress continues with significant special missions opportunities in Europe and fleet growth prospects in ME and Asia.

 

The profit from the Group's US Air associate is not now in line with expectations for the full year due to slower than the expected growth in charter and aircraft management revenues.

 

Ground Division

 

The Europe ground division has successfully completed its transition of operations from Farnborough and Oxford airports to our major new facility at Bournemouth International Airport. This has been a substantial endeavour and business continuity has been achieved with key staff retained in line with the transition plan. Productivity gains have already been delivered as intended and business prospects are good with the new facility now fully operational. However, our forecast assumed a level of revenue growth during this transition that has proved too ambitious in the circumstances.  We do however expect a proportion of these lost revenues to be realised in 2019.

 

The US ground division continues to deliver strong organic growth and solid productivity. However, the growth in maintenance revenues, whilst strong, has not been at the level required to achieve our expectations, partly as a result of it taking longer for new capacity to come on stream.

 

In Asia, the Group's associate China Air Services Limited (CASL) has continued to underperform with the unexpected loss of contracts significantly impacting margins in an operationally geared business.  Plans are in place to reduce costs and recover margins.

 

The Middle East Ground division is performing well in the context of a challenging regional market.



 

Marwan Khalek, Chief Executive of Gama Aviation said:

 

" The reduction in our expectations for this year is disappointing with the growth that we had anticipated not coming through as strongly as expected.   Nonetheless, we are still expecting healthy growth for the year whilst continuing to make good progress in building capability and capacity and securing encouraging new business in all of our key markets. The fundamentals of our business remain strong."

 

-ENDS-

 

 

 

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

 

For further information please visit www.gamaaviation.com or contact:

Gama Aviation Plc                                            +44 (0) 1252 553029

Marwan Khalek, Chief Executive Officer

David Stickland, Chief Financial Officer

 

Camarco                                                            +44 (0) 20 3757 4992

Ginny Pulbrook

Geoffrey Pelham-Lane

 

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/

 


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