Air Partner plc Half Year Results to 31 July 2018 Mark Briffa, CEO | Joanne Estell, CFO
Mark Briffa Group Chief Executive
H 1 2018/19 R ESU LTS OVERVIEW • 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 3 3 AIR PARTNER PLC | HALF YEAR RESULTS OCTOBER 2018 § - Underlying results are stated before other items of £1.6m
A GLOBAL AVIATION SERVIC ES GR OU P Air Partner plc Blue Chip Global Customer Base Managed Consulting & Airline Operators Charter services Training Military & Civil Regulators Airports Oil & Gas Sports Regulatory & Compliance MICE Private Corporates Jets AVIATION SAFETY Individuals Commercial Wildlife Commercial Jets Fatigue Risk Hazard Jets Management Management, ATC Managed JetCard Freight Services 4 3 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 Operating 24/7, 365 days 16 locations 300 employees globally 3 5 AIR PARTNER PLC | HALF YEAR RESULTS OCTOBER 2018
OU R J OU R N EY OF TR AN SFOR MATION Military contracts No one customer > 60% of profits >10% Profits Launch of Acquisition Upskilling of Project of Clockwork Finance Team Connect Baines Simmons wins leads to Mark Briffa launched 10 year Isle of Man Accounting a multi-year contract becomes CEO , Review having joined AP technology New dividend policy Los Angeles in 1995 programme announced office opened 2010- 2010 2014 2015 2016 2017 2018 2014 Acquisition Diversification New York of Cabot begins: US, office opened (Air Partner Europe, Tour Acquisition remarketing) Operations of SafeSkys Acquisition Tight control of New Finance of Baines overheads System Simmons Margin growth 1 into 5 Customer First against tough share split initiative launched economic backdrop ● 156% TOTAL SHAREHOLDER RETURN* 6 AIR PARTNER PLC | HALF YEAR RESULTS OCTOBER 2018 *TSR calculated with dividends reinvested
H 1 2018/19 OPER ATIN G H IGH LIGH TS 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 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 Year ended Six months ended 31 July July 2018 July 2017 Change (%) 31.1.2018 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 - § Underlying profit before tax is stated before “other items” of £1.6m 9 3 AIR PARTNER PLC | HALF YEAR RESULTS OCTOBER 2018
H 1 2018/19 PR OFIT R EC ON C ILIATION Year Six months ended 31 July July 2018 July 2017 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 10 3 AIR PARTNER PLC | HALF YEAR RESULTS OCTOBER 2018
GR OSS PR OFIT BY PR OD U C T £’m • • Commercial jets down 11%, significant one off contract Commercial Jets remains largest division, with a proportion of total GP at 47% in the prior year Strong 2nd QTR driven by FIFA World cup, tour • operations and short term leasing Freight becoming the third leg of the broking business, albeit a small contribution to the Group • US performing well in PJ and freight driving year on at 8% year growth • Consulting & Training 15% of total gross profit • Consulting & Training achieving acquisition targets 11 9 AIR PARTNER PLC | HALF YEAR RESULTS OCTOBER 2018
GR OSS PR OFIT BY R EGION £’m • 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 12 11 AIR PARTNER PLC | HALF YEAR RESULTS OCTOBER 2018
H 1 2018/19 BALAN C E SH EET – as at 31 J uly £m's July 2018 July 2017 January 2018 (restated) 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 13 3 AIR PARTNER PLC | HALF YEAR RESULTS OCTOBER 2018
C ASH FLOW £'000 30,000 25,483 25,000 23,193 JetCard 20,000 JetCard 16,247 15,891 15,000 588 217 1,114 276 459 1,873 10,000 (1,979) (234) (134) (246) Non-JC Non-JC 5,000 9,236 7,302 0 Cash @ 1 Feb Profit after tax Fixed asset Depreciation Working Share option Tax charge in Dividends Provision Other F/x Cash @ 31 additions & capital charge excess of movements differences July amortisation movements payments • 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 3 AIR PARTNER PLC | HALF YEAR RESULTS OCTOBER 2018
Mark Briffa Group Chief Executive
C H ARTER Gross profit down 1.9%, operating profit up 2.1% 10% 35% 55% 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 Commercial Jet Private jets Freight 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 16 AIR PARTNER PLC | HALF YEAR RESULTS OCTOBER 2018
C ON SU LTIN G & TR AIN IN G 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 17 AIR PARTNER PLC | HALF YEAR RESULTS OCTOBER 2018
C LEAR LON G TER M GR OW TH STR ATEGY 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 18 AIR PARTNER PLC | HALF YEAR RESULTS OCTOBER 2018
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