Interim Results For the half year to 31 July 2019 HALF YEAR RESULTS - - PowerPoint PPT Presentation

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Interim Results For the half year to 31 July 2019 HALF YEAR RESULTS - - PowerPoint PPT Presentation

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Interim Results For the half year to 31 July 2019 HALF YEAR RESULTS PRESENTATION - OCTOBER 2019 DISCLAIMER Certain information included in this presentation is forward looking and involves risks, assumptions and uncertainties that could cause

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SLIDE 1

HALF YEAR RESULTS PRESENTATION

  • OCTOBER 2019

For the half year to 31 July 2019

Interim Results

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SLIDE 2

HALF YEAR RESULTS PRESENTATION

  • OCTOBER 2019

DISCLAIMER

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.

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HALF YEAR RESULTS PRESENTATION

  • OCTOBER 2019

Mark Briffa

Group Chief Executive

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SLIDE 4

HALF YEAR RESULTS PRESENTATION

  • OCTOBER 2019

FINANCIAL HIGHLIGHTS

  • Gross profit of £17.2m in line with the prior year
  • Underlying PBT of £3.0m (PYR: £4.2m) down on the prior period by 29.5% 1 & 2
  • Statutory reported profit up by 6.8% to £2.8m (PYR £2.6m)
  • Net cash to bank debt (excluding JetCard cash) increased to £4.3m from £2.0m at 31 January 2019
  • Underlying EPS of 4.3p, down 30.6% (H1 2018: 6.2p);
  • Statutory EPS of 4.1p up 13.9% (H1 2018: 3.6p)
  • Interim dividend increased to 1.80p (PYR 1.75p), signalling confidence in year end out turn
  • Administration expenses 1 up £0.9m reflecting the investment made in:

➢ Opening two new offices to expand the global footprint ➢ Strengthening the senior management team and the overall control environment

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1 Stated before exceptional and other items but including net impairment on financial losses 2 The adoption of IFRS16 has decreased both underlying and statutory profit before tax in the current period by £0.1m

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HALF YEAR RESULTS PRESENTATION

  • OCTOBER 2019

OPERATIONAL HIGHLIGHTS

  • Consulting & Training gross profit up 7.6% to £2.1m
  • US gross profit of £3.7m up 18.2%, driven by strong performance in private Jets
  • Consulting & Training contributes 12.4% to the overall gross profit and increasing (PYR 11.4%)
  • Charter division slightly down on the prior period at £15.0m (PYR £15.3m)
  • New office openings in Singapore and Houston, with an office in Dubai planned for the second half of the year
  • Investment in people with senior appointments at Management and Board level
  • Strong forward order book for next financial year

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SLIDE 6

HALF YEAR RESULTS PRESENTATION

  • OCTOBER 2019

A GLOBAL AVIATION SERVICES GROUP

CHARTER CONSULTING & TRAINING MANAGED SERVICES

A V I A T I O N S A F E T Y

Blue Chip Global Customer Base

  • Airline Operators
  • Military & Civil
  • Regulators
  • Airports
  • Oil & Gas
  • Sports
  • MICE
  • Corporates
  • Individuals

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PRIVATE JETS Group Charter* JETCARD FREIGHT REGULATORY & COMPLIANCE FATIGUE RISK MANAGEMENT WILDLIFE HAZARD MANAGEMENT, ATC MANAGED SERVICES HALF YEAR RESULTS PRESENTATION

  • OCTOBER 2019

* Group Charter was previously known as Commercial Jets

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HALF YEAR RESULTS PRESENTATION

  • OCTOBER 2019

STRONG GEOGRAPHIC PRESENCE

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.

Operating 24/7, 365 days 14 offices globally c.350 employees globally

GATWICK | FAIROAKS | LONDON | NEW YORK | FORT LAUDERDALE | HOUSTON | WASHINGTON D.C. LOS ANGELES | PARIS | COLOGNE | SINGAPORE | MILAN | ISTANBUL | VIENNA AIR PARTNER OFFICES

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HALF YEAR RESULTS PRESENTATION

  • OCTOBER 2019

LONG TERM GROWTH STRATEGY

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To build a world-class, global aviation services group

  • Putting customers first, to provide an exceptional tailored

service across the Group

  • To broaden the portfolio of aviation services we offer,

reduce Charter volatility and improve quality of earnings

  • To grow both organically and through acquisitions
  • To invest in the future: in our people, processes and

infrastructure

  • To maintain our strong brand identity and unite our

businesses across divisions

  • Manage the business for the long term, delivering returns to

shareholders through a progressive dividend policy

Progress achieved in the first half of the year ✓ Feefo Gold Standard Award for C&T ✓ Opened new offices in Houston & Singapore ✓ Upskilled key management positions including new Board level appointments ✓ Continue to roll out our new CRM and booking tool ✓ Currently rolling out our new brand standards including investing in a new website in readiness for next financial year ✓ We are committed to our acquisition strategy and continue to assess a pipeline of opportunities

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SLIDE 9

HALF YEAR RESULTS PRESENTATION

  • OCTOBER 2019

STRATEGY IN ACTION

Acquisition of Cabot (Air Partner Remarketing). Acquisition of Baines

  • Simmons. Customer First

initiative launched Acquisition of Clockwork. Baines Simmons wins 10 year Isle of Man contract. New dividend policy announced New York office opened Acquisition of SafeSkys New Finance System 1 into 5 share split Upskilling of key positions and Board capabilities Processes & controls upgraded Los Angeles office opened Accounting Review 2010: Military contracts > 60% of profits 2019: No one customer > 10% Gross profits

Total Shareholder Return as at 31/01/2019

83.7%

2015 2016 2017 2018 2019

New offices opened in Houston & Singapore (Dubai – late 2019)

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HALF YEAR RESULTS PRESENTATION

  • OCTOBER 2019
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SLIDE 10

HALF YEAR RESULTS PRESENTATION

  • OCTOBER 2019

Putting our customers first Broadening our offer Growing Organically: Strengthening our core business Developing and retaining our people Maintaining and enhancing our brand identity

  • Continued roll out of

CRM & booking tool. Will improve customer experience/ information requests and facilitate cross selling

  • pportunities for the

Group.

  • Our experienced and

dedicated teams have continued to deliver

  • utstanding customer

service to our worldwide customer base

  • Net Promoter score: 84%

at July 19

  • Feefo Gold Standard

Award

  • Gross profit for

Consulting and Training increased by 7.6%.

  • Consulting & Training

contributes 12.4% to Group gross profit and increasing

  • We continue to review

acquisition opportunities and remain selective in

  • ur approach.
  • Singapore office opened

with a focus on Freight and Remarketing

  • US footprint increased with

launch of Houston office

  • US gross profit has increased

by circa £0.6m against July 18 results

  • LA office opened in 2018

and is performing in line with management expectations

  • Senior Management team

upgraded – New MD of Charter for UK and Europe recruited in April 19

  • Board refresh – New

Chair/Audit Committee

  • Roll out of new Air Partner

brand - unifying the Group under one brand umbrella

  • Website development

continues to take place in preparation for new website launch in FY21

AIR PARTNER: KPI’s

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SLIDE 11

HALF YEAR RESULTS PRESENTATION

  • OCTOBER 2019

Joanne Estell

Chief Financial Officer

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SLIDE 12

HALF YEAR RESULTS PRESENTATION

  • OCTOBER 2019

FINANCIAL HIGHLIGHTS

£m’s

unless otherwise stated

July 2019 July 2018 FYR January 2019 Change (%) Gross profit 17.2 17.3 35.5 (1.0) *Admin expenses (inc. net impairment losses on financial assets) 13.9 13.0 29.5 (6.6) *Underlying operating profit 3.3 4.3 6.0 (24.1) *Underlying profit before tax 3.0 4.2 5.8 (29.5) Statutory profit before tax 2.8 2.6 3.4 +6.8 ** Underlying basic EPS (pence) 4.3p 6.2p 9.6p (30.6) Basic EPS (pence) 4.1p 3.6p 5.6p +13.9 Interim dividend (pence) 1.80p 1.75p 1.75p +2.9

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*Stated before exceptional and other items ** 2018 underlying eps has been restated from 6.1p due to a revised calculation of the weighted average number of shares in that period

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HALF YEAR RESULTS PRESENTATION

  • OCTOBER 2019

PROFIT RECONCILIATION

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£m’s July 2019 July 2018 FYR January 2019 Underlying profit before tax 3.0 4.2 5.8 Release of deferred consideration 0.3

  • 0.2

Amortisation of intangible assets arising on consolidation (0.2) (0.2) (0.4) Provision for prior year indirect tax charges (0.3)

  • Change in Board composition
  • (0.2)

(0.4) Accounting review costs

  • (0.7)

(1.3) Abortive acquisition costs

  • (0.5)

(0.5) Statutory profit before tax 2.8 2.6 3.4

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SLIDE 14

HALF YEAR RESULTS PRESENTATION

  • OCTOBER 2019

GROSS PROFIT BY DIVISION

7.2 6.0 1.9 2.1 8.4 5.4 1.5 2.0

1 2 3 4 5 6 7 8 9 Group Charter Private Jets Freight Consulting & Training

Jul-19 Jul-18

£’ms

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Group Charter Private Jets Freight Consulting and Training Jul-19 Jul-18 41.9% 34.8% 10.9% 12.4% 48.7% 31.1% 8.8% 11.4%

  • Group Charter * down 14.4%, due to weaker performance

in Tour Operations and a higher comparator in the prior year FIFA World Cup

  • Private Jets strong US performance, up 10.0% overall
  • Freight gross profit up 22.6%, reflecting growing services

and client base

  • Consulting & Training up 7.6%
  • Group Charter remains largest division at 41.9%
  • Private Jets has increased to 34.8% of total
  • Freight growth leads to contribution of 10.9%
  • Consulting & Training now 12.4% of total
  • More even split of contribution by division shows

success of diversification strategy

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* Group Charter was previously known as Commercial Jets

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HALF YEAR RESULTS PRESENTATION

  • OCTOBER 2019

GROSS PROFIT BY REGION

8.4 4.9 3.7 0.1 8.5 5.5 3.2 0.2

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 UK Europe USA ROW

Jul-19 Jul-18

£m

49.1% 49.0% 28.6% 31.9% 21.8% 18.2% 0.5% 0.9%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% UK Europe USA ROW Jul-19 Jul-18

  • Further growth in the US, up 18.2%; due to investment in

people and broadening of footprint with new offices

  • UK in line with last year, 0.8% down, where C&T grow has

helped negate a key customer delay.

  • Europe 11.1% down on last year; principally due to a sharp

drop in the tour operations activity in France partially offset by good growth in Germany and Austria

  • >50% of gross profit coming from outside UK
  • Further growth in the US increases contribution to

21.8%

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HALF YEAR RESULTS PRESENTATION

  • OCTOBER 2019

ABBREVIATED STATEMENT OF FINANCIAL POSITION

£’ms July 2019 July 2018 January 2019 Intangible assets 11.4 12.1 11.6 Tangible assets 0.9 1.1 0.9 Right of use assets 9.0

  • Trade and other receivables

25.7 25.9 19.1 Cash balances – Jet Card 18.5 16.3 17.7 Other cash balances 9.8 9.2 7.5 Other current assets 0.2 0.8 0.3 Trade and other payables (8.0) (7.5) (8.0) Deferred income (32.2) (34.6) (25.4) Current lease liabilities (5.8)

  • Other current liabilities

(8.1) (7.6) (5.8) Deferred tax (net) (0.3) (0.3) (0.3) Borrowings (5.5) (2.5) (5.5) Long term lease liabilities (3.5)

  • Other long term liabilities

(0.1) (1.3) (0.2) Net assets 12.0 11.6 11.7

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  • Includes £9.0m of Right to use assets, £5.8m of

current lease liabilities and £3.5m of long term lease liabilities as a result of IFRS 16

  • As a consequence, net assets have been

reduced by £0.3m. The Right of use assets include £6.8m for an aeroplane, £1.0m for property and £1.2m for other assets. Prior year has not been restated, as permitted under IFRS

  • Borrowing is comprised of the group’s revolving

credit facility ➢ Net cash excluding IFRS 16 leases is £4.3m ➢ Net debt including IFRS 16 leases is £5.0m

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HALF YEAR RESULTS PRESENTATION

  • OCTOBER 2019

CASH FLOW BRIDGE

  • The adoption of IFRS16 has increased the depreciation add back by £2,773,000 and introduced the

repayment of finance leases by £2,718,000 with the difference going to working capital movements.

  • Strong level of JetCard deposits at 31 July 2019 (£18.5m) an increase of £0.8m

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25,154 28,357 7,462 9,822

3,108 123 3,429 (421) (430) 843 1,554 (593) (2,718) (2,011) (296) 615

5,000 10,000 15,000 20,000 25,000 30,000 35,000

Cash @ 31st Jan 19 Operating Profit Share Options Depreciation & Amortisation Capex SafeSkys Ltd

  • Def. Con

JCD cash increase Working capital movements Tax paid Finance lease repayment Dividends Net Interest Changes in FX Cash @ 31st Jul 19

£'000 JetCard JetCard 17,692 18,535 Non-JC Non-JC

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SLIDE 18

HALF YEAR RESULTS PRESENTATION

  • OCTOBER 2019

Mark Briffa

Group Chief Executive

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SLIDE 19

HALF YEAR RESULTS PRESENTATION

  • OCTOBER 2019

CHARTER

GROUP CHARTER

  • Gross profit reduced £1.2m to £7.2m,14.4%

➢ Significant drop in tour operations activity in France due to supply ➢ Key UK customer wins offset a decrease in government flights ➢ H1 2018 included the FIFA World Cup; no comparable one off events in this period ➢ Germany and Austria strong driven by government and automotive sector work

PRIVATE JETS

  • Gross profit increased £0.6m to £6.0m, 10.0%

➢

US: Strong performance with gross profit up 42%. JetCard membership up 29% increasing future base

➢

UK & Europe: sector volatility driven by economic uncertainty, key customers flying less; but customer base retained

FREIGHT

  • Gross profit increased £0.4m to £1.9m, 22.6%

➢ Driven by UK strong performance with gross profit growth of 63% ➢ Good growth in US and Germany offsetting a large non recurring transaction in Turkey in the prior period ➢ Business and growth notably coming from On-Board Courier, Aircraft on Ground spares services 48% 40% 12% Gross Profit – Charter Group Charter Private Jets Freight

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HALF YEAR RESULTS PRESENTATION

  • OCTOBER 2019

CONSULTING & TRAINING (C&T)

BAINES SIMMONS

  • Strong management continuing to drive strategy, clear direction and future growth
  • Further improved performance in Training
  • Customer retention secured and strong feedback from customer surveys – Feefo Gold Standard Award

CLOCKWORK RESEARCH

  • Notable work incudes: Air France, Croydon Trams, BP and Cathy Pacific
  • Small, niche business – Fatigue Risk Management fully integrated into Baines Simmons
  • Opportunity to cross-sell other C&T products into blue chip customer base under one brand

AVIATION MANAGED SERVICES (PREVIOUSLY KNOWN AS SAFESKYS)

  • 3 new airfield contracts won and all existing ones retained
  • Robust plan to improve the underperforming legacy Air Traffic Control contracts
  • Digital offering being developed to be launched in Q1 2020

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Air Partner’s C& T businesses have now been fully integrated under one brand - Baines Simmons

  • Gross profit for the division increased by 7.6% to £2.1m

12.4%

Consulting & Training contribution to Group gross profit

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SLIDE 21

HALF YEAR RESULTS PRESENTATION

  • OCTOBER 2019

SUMMARY AND OUTLOOK

  • Strong half year performance despite sector challenges
  • Gross profit performance broadly flat year on year

➢ Group Charter remains challenging, overall a robust performance ➢ Growth from Private Jets in the US following investment; Freight and Consulting & Training

  • Our long term strategy continues to progress well

➢ Geographical and product diversification has improved overall group resilience ➢ Continue to invest in our people to support our organic growth initiatives ➢ Plan to open a new office in Dubai in the second half of the year ➢ Continue to assess acquisitions that can enhance or extend the services and capabilities

  • Well placed to manage the continuing challenges in the aviation sector and the

wider economic backdrop

  • Good start to the second half of the year with performance in line with

Management’s expectations

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HALF YEAR RESULTS PRESENTATION

  • OCTOBER 2019

Appendix

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HALF YEAR RESULTS PRESENTATION

  • OCTOBER 2019

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GROUP CHARTER

(PREVIOUSLY “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

Charter of cargo aircraft & part-charter for regular & bespoke requirements, including emergency aid drops, time critical door to door freight delivery and on-board couriers

SUPPORT SERVICES

Charter of small aircraft or jets for up to 19 people, for business and leisure, by corporates, HNWIs and government. Pre paid JetCard

  • ffering 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

CHARTER CONSULTING & TRAINING / MANAGED SERVICES

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AIR PARTNER: TWO DIVISIONS

BAINES SIMMONS

A world leading aviation safety consultant specialising in regulation & compliance, safety management, training, consulting and outsourcing

AVIATION MANAGED SERVICES

(PREVIOUSLY “SAFESKYS”)

EMERGENCY PLANNING

Experts in planning, executing and managing air support and evacuations worldwide A leading provider of turnkey Air Traffic Control (ATC) Services including ATC engineering and wildlife management units

CLOCKWORK RESEARCH

A leading fatigue risk management consultancy delivering innovative & effective fatigue risk management solutions for clients across various sectors

  • f the aviation industry
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HALF YEAR RESULTS PRESENTATION

  • OCTOBER 2019

FINANCIAL HIGHLIGHTS

£m’s

unless otherwise stated

July 2019 July 2018 FYR January 2019 Change (%) Gross transaction value 124.1 132.8 273.3 (6.6) Revenue 31.7 36.0 77.5 (12.1) Gross profit 17.2 17.3 35.5 (1.0) *Admin expenses (inc. net impairment losses on financial assets) 13.9 13.0 29.5 (6.6) *Underlying operating profit 3.3 4.3 6.0 (24.1) *Underlying profit before tax 3.0 4.2 5.8 (29.5) Statutory profit before tax 2.8 2.6 3.4 +6.8 ** Underlying basic EPS (pence) 4.3p 6.2p 9.6p (30.6) Basic continuing EPS (pence) 4.1p 3.6p 5.6p +13.9 Interim dividend (pence) 1.80p 1.75p 1.75p +2.9

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*Stated before exceptional and other items ** 2018 underlying eps has been restated from 6.1p due to a revised calculation of the weighted average number of shares in that period