Air Partner plc Half Year Results to 31 July 2018 Mark Briffa, CEO - - PowerPoint PPT Presentation

Mark Briffa, CEO | Joanne Estell, CFO

Air Partner plc

Half Year Results to 31 July 2018

Mark Briffa

Group Chief Executive

• Good first half trading performance; underlying§ PBT of £4.2m, an increase of 2.4%
• Strong net cash position of £6.7m, up £1.9m from the year end
• Underlying§ EPS of 6.1p up 8.9%
• Interim dividend increased by 2.9% to 1.75p
• Investing in people, infrastructure, processes and controls positioning for next phase of growth
• Confidence in expectations for the full year

H 1 2018/19 R ESU LTS OVERVIEW

3 3

AIR PARTNER PLC | HALF YEAR RESULTS OCTOBER 2018 § - Underlying results are stated before other items of £1.6m

Air Partner plc Charter Consulting & Training Managed services

3

A GLOBAL AVIATION SERVIC ES GR OU P

4 Commercial Jets Regulatory & Compliance AVIATION SAFETY Fatigue Risk Management Wildlife Hazard Management, ATC Managed Services JetCard Freight Private Jets Commercial Jets

Blue Chip Global Customer Base



Airline Operators



Military & Civil



Regulators



Airports



Oil & Gas



Sports



MICE



Corporates



Individuals

AIR PARTNER PLC | HALF YEAR RESULTS OCTOBER 2018

STR ON G GEOGR APH IC PR ESEN C E

Founded in 1961, Air Partner is an aviation services group that provides worldwide aviation charter, consulting and training services to industry, commerce, governments and private individuals and across civil and military organisations

3 5

AIR PARTNER PLC | HALF YEAR RESULTS OCTOBER 2018

Operating 24/7, 365 days 16 locations 300 employees globally

2010 2010- 2014 2014 2015 2016 2017 2018

Launch of

Project Connect launched a multi-year technology programme

OU R J OU R N EY OF TR AN SFOR MATION

6

AIR PARTNER PLC | HALF YEAR RESULTS OCTOBER 2018

Military contracts > 60% of profits

Mark Briffa becomes CEO, having joined AP in 1995 Diversification begins: US, Europe, Tour Operations Tight control of

• verheads

Margin growth against tough economic backdrop Acquisition

• f Cabot

(Air Partner remarketing) Acquisition

• f Baines

Simmons Customer First initiative launched Acquisition

• f Clockwork

Baines Simmons wins 10 year Isle of Man contract New dividend policy announced New York

• ffice opened

Acquisition

• f SafeSkys

New Finance System 1 into 5 share split Upskilling of Finance Team leads to Accounting Review Los Angeles

• ffice opened

No one customer >10% Profits

TOTAL SHAREHOLDER RETURN*

• 156%

*TSR calculated with dividends reinvested

Charter

• Continued strong performance in the US and Freight
• CJ down year on year due to large, one-off 2017 contract
• New office opened in Los Angeles in June
• PJ performing well in US; flat in UK and EU

Consulting & Training

• Benefit of acquisitions coming through
• Delivering large programmes for broad, global customer base

Delivering our long term growth strategy

• Strengthening of finance capabilities; new CFO
• Implementation of effective financial controls advanced
• Customer First initiatives supporting cross selling
• CRM upgrade on track for completion end of FY19

H 1 2018/19 OPER ATIN G H IGH LIGH TS

3 7

AIR PARTNER PLC | HALF YEAR RESULTS OCTOBER 2018

Joanne Estell

Chief Finance Officer

H 1 2018/19 FIN AN C IAL H IGH LIGH TS

3

§ Underlying profit before tax is stated before “other items” of £1.6m 9

AIR PARTNER PLC | HALF YEAR RESULTS OCTOBER 2018

Six months ended 31 July July 2018 July 2017 Year ended 31.1.2018 Change (%) Gross transaction value (£m) 132.8 135.5 261.3 (2.0) Gross profit (£m) 18.0 18.1 36.1 (0.6) Underlying profit before tax (£m) 4.2 4.1 5.8 2.4 Statutory profit before tax (£m) 2.6 3.7 4.8 (29.7) Net cash/(debt) (£m) excl JetCard cash 6.7 10.6 4.8 (36.8) Underlying basic EPS (pence) 6.1 5.6 8.4 8.9 Basic continuing EPS (pence) 3.6 4.9 6.9 (26.5) Interim dividend (pence) 1.75 1.70

• 2.9

Total dividend (pence)

• 5.50

H 1 2018/19 PR OFIT R EC ON C ILIATION

3

10

AIR PARTNER PLC | HALF YEAR RESULTS OCTOBER 2018

Six months ended 31 July July 2018 July 2017 Year ended 31.1.2018 Underlying profit before tax (£m) 4.2 4.1 5.8 One off isolated costs associated with accounting review (0.7) Aborted acquisition costs (0.5) Change of Board positions (0.2) Amortisation of acquired intangible assets (0.2) (0.2) (0.3) Acquisition costs (0.2) (0.4) Restructuring / other (0.4) Statutory profit before tax (£m) 2.6 3.7 4.8

• Commercial jets down 11%, significant one off contract

in the prior year

• Strong 2nd QTR driven by FIFA World cup, tour
• perations and short term leasing
• US performing well in PJ and freight driving year on

year growth

• Consulting & Training achieving acquisition targets
• Commercial Jets remains largest division, with a

proportion of total GP at 47%

• Freight becoming the third leg of the broking

business, albeit a small contribution to the Group at 8%

• Consulting & Training 15% of total gross profit

9

£’m

GR OSS PR OFIT BY PR OD U C T

11

AIR PARTNER PLC | HALF YEAR RESULTS OCTOBER 2018

• Europe gross profit increased c.20%
• Office opened in Los Angeles in June 2018 supporting further overseas expansion
• Prior year was supported by a significant one off contract in UK and US

11

£’m

GR OSS PR OFIT BY R EGION

12

AIR PARTNER PLC | HALF YEAR RESULTS OCTOBER 2018

H 1 2018/19 BALAN C E SH EET – as at 31 J uly

3

13

AIR PARTNER PLC | HALF YEAR RESULTS OCTOBER 2018

£m's July 2018 July 2017

(restated)

January 2018 Intangible assets 12.1 8.7 12.1 Tangible assets 1.0 1.1 1.2 Trade and other receivables 26.1 42.1 26.5 Restricted cash balances - JetCard 16.2 15.4 15.9 Other cash balances 9.2 13.4 7.3 Other current assets 0.8 0.5 0.7 Trade and other payables (7.9) (4.9) (7.3) Deferred income (34.6) (46.5) (34.4) Other current liabilities (exc. Borrowings @ July 17) (7.2) (14.4) (6.2) Deferred tax (net) (0.3) (0.2) (0.3) Borrowings (2.5) (2.9) (2.5) Other long term liabilities (1.3) (0.2) (1.5) Net assets 11.7 12.1 11.5

C ASH FLOW

3

• The above explains net increase in cash between the opening and closing balances
• Gross cash has increased by £1.9m from the year end
• Net cash after bank debt is £6.7m versus £4.8m at the year end

14

23,193 25,483 7,302 9,236 1,873 (246) 459 1,114 217 588 (1,979) (234) (134) 276 5,000 10,000 15,000 20,000 25,000 30,000 Cash @ 1 Feb Profit after tax Fixed asset additions Depreciation & amortisation Working capital movements Share option charge Tax charge in excess of payments Dividends Provision movements Other F/x differences Cash @ 31 July £'000 JetCard JetCard 15,891 16,247 Non-JC Non-JC

AIR PARTNER PLC | HALF YEAR RESULTS OCTOBER 2018

Mark Briffa

Group Chief Executive

C H ARTER

16

Gross profit down 1.9%, operating profit up 2.1%

Commercial Jets:

• Gross profit down 11.1% due to a large one-off 2017 contract
• Strong Q2 driven by FIFA World Cup, Tour Operations & Short Term Leasing
• Remarketing exclusive mandates; timing difficult to predict

Private Jets:

• Gross profit up 5.9% year-on-year
• Investment in people in US building on record 2018 performance
• US JetCard sales up 20%, bookings up 34%
• UK & Europe flat as new sales teams bed in

Freight:

• Gross profit up 36.4%
• Continued strong performance across the Group
• Targeted marketing, successful cross selling and investment in teams
• Becoming a strong ‘3rd leg’ to the business

AIR PARTNER PLC | HALF YEAR RESULTS OCTOBER 2018

55% 35% 10%

Commercial Jet Private jets Freight

C ON SU LTIN G & TR AIN IN G

17

Gross profit up 8.0%, operating profit up 10.8%

Baines Simmons:

• New management and a focus on costs and contracts having positive impact
• Good new contract wins over H1 across military and commercial sectors
• 4-6 year MOD programme initiated, good revenue projected for H2
• Strong pipeline

Clockwork Research:

• Small but complementary; Baines Simmons now offering Fatigue Risk
• Croydon Trams fatigue risk management
• Safety case for Air France
• Investment in Business Development to bolster pipeline

SafeSkys:

• Good progress in first year of ownership; integration of back office progressing
• Strategy focusing on growth in wildlife hazard management
• New products and services in development for airports with in-house teams
• Significant opportunity to expand services and grow internationally

AIR PARTNER PLC | HALF YEAR RESULTS OCTOBER 2018

• Clear growth strategy to build a global aviation services group
• Aviation market growth leading to increased demand for services
• Organic initiatives and selective acquisitions broaden our services, capabilities, geographies and

customers

• Objective to achieve balance between our two market leading divisions
• Managing for the long term: aligning with global customers’ needs and consistently putting the

Customer First will drive shareholder returns

• Clear recognition of cyclical risks in Aviation

C LEAR LON G TER M GR OW TH STR ATEGY

18

AIR PARTNER PLC | HALF YEAR RESULTS OCTOBER 2018

IN VESTIN G FOR TH E FU TU R E

19

POSITIONING THE BUSINESS FOR THE NEXT PHASE OF GROWTH PEOPLE

• Ongoing upskilling of our teams
• Upgrading of finance capabilities
• Excellent results in US and Freight following investment

INFRASTRUCTURE

• New office opened in Los Angeles in June
• Efficiencies from integrating shared services
• Clockwork into Baines Simmons

PROCESSES & CONTROLS

• On-going focus on key financial controls
• CRM upgrade on track for completion by end FY19
• Strengthening our core and building ever stronger foundations

AIR PARTNER PLC | HALF YEAR RESULTS OCTOBER 2018

SU MMARY AN D OU TLOOK

20

H1 2018

• Good half year trading performance
• Success of prior investments and focus on delivering for our global customers

FY 2018/2019

• Trading in line with management expectations
• Final quarter traditionally more challenging
• The Board is confident in the Group’s prospects for the full year and beyond

Looking forward

• Clear, long term strategy positions the business well for future growth
• Ongoing investment in people, offices, processes and controls
• Board continues to look at further investment opportunities, both organic and acquisition
• Strong portfolio of global aviation services helping to mitigate volatility

AIR PARTNER PLC | HALF YEAR RESULTS OCTOBER 2018

Appendix

3 A leading fatigue risk management

consultancy delivering innovative & effective fatigue risk management solutions for clients across various sectors of the aviation industry A leading provider of turnkey Air Traffic Control (ATC) Services including ATC engineering and wildlife management units COMMERCIAL JETS Charter of large aircraft for 20+ people for governments, corporates, sports and entertainment teams, industrial, manufacturing customers and tour operators PRIVATE JETS & JETCARD FREIGHT BAINES SIMMONS Charter of cargo aircraft & part-charter for regular & bespoke requirements, including emergency aid drops, time critical door to door freight delivery and

• n-board couriers

A world leading aviation safety consultant specialising in regulation & compliance, safety management, training, consulting and outsourcing SUPPORT SERVICES CLOCKWORK RESEARCH Charter of small aircraft or jets for up to 19 people, for business and leisure, by corporates, HNWIs and government. Pre paid JetCard offering fixed hourly rates, guaranteed aircraft availability 24/7 Operations Travel Management Includes REMARKETING A global aircraft remarketing service akin to used sales, covering both commercial and private jets SAFESKYS

CHARTER CONSULTING & TRAINING

Experts in planning, executing and managing air support and evacuations worldwide EMERGENCY PLANNING

AIR PARTN ER : TW O D IVISION S

22

AIR PARTNER PLC | HALF YEAR RESULTS OCTOBER 2018

21 Certain information included in this presentation is forward looking and involves risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed or implied by forward looking statements. Forward looking statements cover all matters which are not historical facts and include, without limitation, projections relating to results of operations and financial conditions and Air Partner plc’s plans and objectives for future operations. These may include, without limitation, discussions of expected future revenues, financing plans, expected expenditures, risks associated with changes in economic conditions, the strength of the aviation markets in the jurisdictions in which the Air Partner group operates, changes in exchange and interest rates. Forward looking statements can be identified by the use of forward looking terminology, including, but not limited to, terms such as "believes", "estimates", "anticipates", "expects", "forecasts", "intends", "plans", "projects", "goal", "target", "aim", "may", "will", "would", "could" or "should" or, in each case, their negative or other variations or comparable terminology. Forward looking statements are not guarantees of future performance. All forward looking statements in this presentation are based upon information known to Air Partner plc on the date of preparation of this presentation. Accordingly, no assurance can be given that any particular expectation will be met and readers are cautioned not to place undue reliance on forward looking statements. Additionally, forward looking statements regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Other than in accordance with its legal or regulatory obligations (including under the UK Listing Rules and the Disclosure and Transparency Rules of the Financial Conduct Authority), Air Partner plc undertakes no obligation to publicly update or revise any forward looking statement, whether as a result of new information, future events or otherwise. Nothing in this presentation shall exclude any liability under applicable laws that cannot be excluded in accordance with such laws.

D ISC LAIMER

23

AIR PARTNER PLC | HALF YEAR RESULTS OCTOBER 2018