31 March 2008
Interims 2008 6 months to 31 Jan 2008 David Savile, CEO Steph White, CFO Mark Briffa, COO
Disclaimer This presentation contains forward looking statements which reflect Management’s current views and estimates. The forward looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those contained in the forward looking statements. Potential risks and uncertainties include such factors as general economic conditions, foreign exchange fluctuations, competitive product and pricing pressures and regulatory developments. 3 www.airpartner.com
Trading environment � Excellent results from good trading conditions � Our products are increasingly popular � Diversification strategy driving success � Government and HNW sectors are strong � Market is competitive, locally not globally � Encouraging forward orders � Group remains well-positioned 4 www.airpartner.com
Financial highlights for H1 � Sales £ 109.4 m up 21% � Operating profit £ 3.5 m up 9% � Profit before tax £ 3.9 m up 12% � Diluted EPS 25.1 p up 9% � Final dividend 7.4 p up 10% � Cash £ 14.3 m down * 17% � Entering 14 th consecutive year of a 10% dividend increase *after £6m special dividend payout in 2007 5 www.airpartner.com
Sales (£m) 200 175 150 125 H2 ---- 100 H1 75 50 25 0 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 6 www.airpartner.com
Profit before tax (£m) 8 7 6 5 H2 ---- 4 H1 3 2 1 0 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 7 www.airpartner.com
Income statement 2008 2007 £’000 £’000 Revenue 109,366 90,308 Cost of Sales (95,923) (76,064) Gross Profit 13,443 14,244 Operating profit 3,462 3,203 Profit before tax 3,881 3,464 Earnings per share: Basic 25.6p 23.5p Diluted 25.1p 23.0p 8 www.airpartner.com
Balance sheet 2008 2007 £’000 £’000 Non-current assets 6,306 5,712 Current assets 41,487 33,096 Total assets 47,793 38,808 Current liabilities (33,988) (23,539) Non-current liabilities (75) (266) Total liabilities (34,063) (23,805) Net assets 13,730 15,003 9 www.airpartner.com
Group cash flow 2008 2007 £’000 £’000 Net cash from operating activities 2,176 10,036 Net cash from investing activities (716) (3,993) Net cash used in financing activities (6,639) (588) Net (decrease)/increase in cash (5,179) 5,455 Opening cash 19,479 11,931 Foreign exchange rate changes 49 (75) Closing cash 14,349 17,311 10 www.airpartner.com
Dividend growth (pence) Half Year Full Year Special 80 70 60 50 40 30 20 10 0 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 11 www.airpartner.com
Divisional review 12 www.airpartner.com
Geographic review (sales) � 23 offices across 4 continents H1: 2008 21% 15 offices 4 offices 2 offices 2 offices H1: 2007 USA UK Europe Rest of the 8% 60% 31% world 1%
Geographic review (Op. profit) H1: 2008 15 offices 9% 4 offices 2 offices 2 offices H1: 2007 USA UK Europe Rest of the 9% 72% 17% world 2%
Divisional split of sales Freight Other Private Jets Commercial Jets 1% 8% 24% 67% H1: 2008 21% H1: 2007 15 www.airpartner.com
Approx split of sales by client sector Private HNW Government Corporate 8% 52% 40% H1: 2008 21% H1: 2007 16 www.airpartner.com
Commercial Jets (Broking of airliners) 67% of Group sales � Sales up 28% � Operating profit up 9% � Increase in longer term contracts � Delivering 100% successful flights is the key • This stems from increasing investment in training, retention, and client care • 24 hour live flight operations support � Government flights are currently more than half of CJ activity � Talent secondment • Schemes to export best practice to international offices 17 www.airpartner.com
Private Jets 24% of Group Sales � Sales up 11% (31%) across all our PJ products � PJ split into Ad hoc broking, JetCard sales, Operating Company
Private Jets (Broking of private jets and JetCard sales) 18% of Group sales � Market is still very active • Overall market demand is still rising, but at a slower rate • Growth being driven by HNWI activity (up 20%) � JetCard sales up 50% • Tangible product • Renewal rates very high – product is popular; existing clients refer new business • Steady balanced growth provides sustainable profitability � Industry evidence shows no let up in demand for new aircraft. • Backlog for new jets extends from 2 to 7 years 19 www.airpartner.com
Air Partner Private Jets (our operating company at Biggin Hill) 6% of Group sales � Completing on strategic aims • Strong halo effect across PJ broking and JetCard sales • Cross-selling from Gatwick broking to Biggin Hill fleet fully successful • Average Fleet utilisation up 10%; 2 new aircraft • Fleet optimisation much improved � Ongoing integration • Renegotiating legacy contracts – much achieved, more to be done � Current trading • Expecting good summer season 20 www.airpartner.com
Other Divisions � Freight Division (8% of Group sales) • Sales up 39%; PTP up 74% as we consolidated team mgmt into the UK • Hit its annual target in month 5 � Emergency Planning Division • GP up 10%, PTP up almost 200% as we save costs � Air Planner • Key support division that also acts for third parties and makes a contribution � Air Partner Travel • Concierge service for key clients requiring more than an internet service • Sales up 28%, PTP up 10% � Australian Leasing Operation • No plans to alter investment levels 21 www.airpartner.com
Group product review Players Products Territories Private Jet Private Jet Aircraft Airliner Freight Jet Card Emerg. USA EUR ME ASIA Charter Sales Mgmt Charter Charter Program Evac � � � � � � � � � � � Air Partner � � Airlines (direct sell) Most are single continent � � � Private Jet Operators � � � � � Fractionals � � Card � Programme Operators
Current trading � H2 sales expected to be strong � Opportunities remain in ample supply • Market is tight but business activity levels remain high � And as at end February: • Forward orders are 40% ahead of comparable period (on AP’s usual limited visibility) • Cash is up a further £3.6m Air Partner remains, as always, a long term investment 23 www.airpartner.com
Q & A
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Appendix � For the benefit of investors who are new to our business, we attach some previously used slides that provide a background briefing on Air Partner. Please contact us if you would like further amplification. 26 www.airpartner.com
Contents � A straightforward Business Model � An uncomplicated Financial Model � The Business by Activity � The Growth Drivers � Size of the Global Market � Driving the Business • The PLC Board • Senior Management • Building Depth • Private Jet Enclave 27 www.airpartner.com
A Straightforward Business Model � Putting together the buyer who wants to charter an aircraft but doesn’t know how to do it, with the seller who has spare aircraft capacity but cannot successfully market himself � Compares with a stock broker: even if the buyer finds the seller direct, is today’s price the right price to pay? � Aiming for the ideal scenario where: • the client is happy that he has a quality aircraft at a price he could not achieve on his own; • the supplier is happy with quality business he could not have secured on his own; • and Air Partner is earning the right margin and building long term client loyalty and respect 28 www.airpartner.com
An Uncomplicated Financial Model � Transactional explanation: incoming client funds • Corporate clients: mirrored transactions 90% of sales is payment prior, then we pay supplier prior 10% of sales is payment after, then we pay after Government clients: funding required 90% of sales: Western Govts demand 30-45 days credit but we pay suppliers at time of flight, a key reason for why the Group requires significant cash resources � Margin explanation: • Client funds (100%) come in (as turnover) • ~90% go out to external supplier airline (as COGS) • Leaving ~10% (our gross profit) as fee income, from which we run our business � Working capital: • We use ~£7-9m to fund our Govt flying • Treated as a significant USP not available from our rivals 29 www.airpartner.com
The Business by Activity Business Flights Heads of State Conference/Incentives Product Launches IPO Road-shows Cruise Connections Vital Freight Country Evacuations Air Ambulances Relief Aid Trade Delegations Immediate Flights Government Flights Urgent Media Peace-keeping Point-to-Point 30 www.airpartner.com
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