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Air Partner PLC - Full Year Trading Update

RNS Number : 5134A
Air Partner PLC
22 January 2020
 


LEI: 213800JLR6YIRMSCUS98

22 January 2020

 

AIR PARTNER PLC

('Air Partner' or 'Group')

 

FULL YEAR TRADING UPDATE

  

Overview

 

Air Partner, the global aviation services group, today provides a trading update for the year ending 31 January 2020. The Group's UK Charter division has been impacted by slower than expected Q4 trading and as a result the Board expects to announce underlying profit before tax of not less than £4.3 million for the 12 months to 31 January 2020, which is lower than previously expected. 

 

The Board looks ahead to the new financial year with confidence, which is supported by a strong order book in Safety & Security, with order book coverage of c.35% of the forecast outlook, and sizeable business wins in the Charter division for delivery in the first half of the year ending 31 January 2021.

 

Divisional Review

 

Charter division

 

While Group Charter has performed well in the US, and reasonably well in Europe, the UK has been weak, which has impacted Group performance. Our UK sales have been impacted by:

(i)    a single UK customer suspending a complex global flying programme in H1, which did not revert in H2 as expected. We continue to support this customer on an ad hoc basis;

(ii)    a soft UK private jet market, which worsened in Q4; and

(iii)   an A330 Remarketing mandate, where, at the date of this announcement, the sale and purchase agreement is signed but remains subject to closing conditions. As a result, it now looks highly likely that this will fall into the next financial year for revenue recognition purposes.

 

Outside of the UK, the US market continues to be strong and our US business is performing very well, particularly in Private Jets. This is despite no 'Urgent Action' events taking place in either H1 or H2 of 2019, the absence of which is highly unusual in Charter. We have invested in our US Charter business consistently over the last three years, selectively increasing broker headcount and opening new offices, and investment will continue in 2020, signalling our continued confidence in this division. In continental Europe, Charter has had a reasonable year overall, though performance is mixed depending on region and product. 

 

Safety & Security division

 

The newly formed Safety & Security division has performed in line with expectations, with revenue growth expected to exceed the prior period by at least 10%.    

 

In line with our stated strategy of diversifying the Group's revenue streams and broadening the portfolio of aviation services we offer, we acquired Redline Assured Security, a leading global aviation security solutions and training company, in December 2019, and the integration is progressing well. We are encouraged by the beneficial synergies this acquisition affords us in safety and security, as well as the strong pipeline of business opportunities.

 

Divisional Outlook

 

Charter division

 

While the visibility around Charter orders is always limited, it has been further impacted by the political uncertainty in the UK and headwinds in the global economy. From the UK perspective, the General Election result on 13 December 2019 delivered a clear majority, which we believe over time will help to build business and consumer confidence.


The Charter division has already secured some sizeable new business wins for the next financial year. Moreover, the 2020 events calendar is significantly better than 2019, with a variety of opportunities for Charter in sectors where we excel, such as large corporate programmes and governmental work. Our Remarketing business has a good pipeline of exclusive mandates and is in the process of growing this even further. Exclusive mandates, which are active, include one B777, one A330, one ATR72, six S76 helicopters and three Twin Otters.

Heightened tensions in the Middle East have resulted in increased interest in our Emergency Planning product. We received several enquiries for Evacuations during and immediately post the events in Iran/Iraq at the beginning of 2020 and we continue to monitor the situation in the region.  

 

Over the last two years, we have opened offices in Los Angeles (June 2018), Houston (February 2019), Singapore (February 2019) and Dubai (September 2019). The cost of new office openings is expensed and a positive contribution is expected after 18/24 months. We remain confident of the contribution that the four recently opened offices will make to the Group within this time period, and are still committed to opening one/two new offices per annum over the next three years to increase our geographical footprint and diversify further.

 

Safety & Security division

 

Pleasingly, the Safety & Security division, which includes the full year effect of the Redline acquisition, starts the year with an order book coverage of c.35% of its forecast outlook. Redline is an important addition to this division and during the year will be rebranded as "Air Partner Assured Security". 

 

Group Outlook

 

While it is disappointing that the last quarter has not traded in line with the Board's expectations, we are encouraged by our forward order book and the increasing levels of visibility that we are gaining through the continued growth of our Safety & Security division. The Board enters the new financial year with confidence that the Group is well positioned to execute its stated strategy to become a world-class aviation services group, for the benefit of all stakeholders.

 

END

 

Enquiries:

 

Air Partner

01293 844 788

Mark Briffa, Chief Executive Officer

 

Joanne Estell, Chief Financial Officer

 

 

 

TB Cardew (PR Advisor to Air Partner)

020 7002 1080

Tom Allison

07789 998 020

Alycia MacAskill           

07876 222 703

 

AIR PARTNER NOTICE:

The global charter business has consistently been, and will continue to be, a volatile industry. Against this backdrop we manage the business for the long term, with a very clear strategy of alignment to the needs of our global customer base.   We have a strong portfolio of global aviation services, which provides us with exposure to various sectors and geographies, and our portfolio approach, without any single product or market dominance, often enables us to limit the impact of such market volatility.

 

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 defence organisations. The Group has two divisions: Air Partner Charter, comprising Group Charter (formerly Commercial Jets), Private Jets, Freight and Remarketing; and Air Partner Safety & Security (formerly Consulting & Training), which comprises Baines Simmons and Redline Assured Security.

 

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. Air Partner Remarketing provides comprehensive remarketing programmes for all types of commercial and corporate aircraft to a wide range of international customers.

 

Baines Simmons offers Aviation Safety Management, Fatigue Risk Management, Air Traffic Services, Wildlife Hazard Management and Aircraft Registry Services. Redline Assured Security delivers government-standard security training and solutions.

 

Air Partner has 17 offices 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).

 

 


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TSTEAFFFAFLEEAA

Quick facts: Air Partner

Price: 47

Market: LSE
Market Cap: £25.16 m
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