2020 Full Year Results
For the year ended 31 January 2020
FULL YEAR RESULTS MAY 2020
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.
FULL YEAR RESULTS MAY 2020
Mark Briffa
Group Chief Executive
FULL YEAR RESULTS MAY 2020
FINANCIAL HIGHLIGHTS
- Gross profit of £34.2m, down against prior year by 3.7%
- Administration expenses1 in line with prior year after investing in three new office openings
- Underlying PBT of £4.2m (FY19: £5.8m), down on the prior period by 27.6% 1 & 2
- Statutory reported profit down by 73.5% to £0.9m (FY19: £3.4m), driven by:
- Impairment charge relating to SafeSkys of £1.9m
- Amortisation of acquired intangibles for Redline of £0.6m
- A number of other exceptional costs, offset by a number of exceptional gains, of £0.8m
- Net debt (excluding JetCard cash) of £6.9m (FY19: net cash of £2.0m), change resulting from Redline acquisition
- Underlying EPS of 6.4p, down 33.3% (FY19 2019: 9.6p)
- Statutory EPS of 0.6p, down 89.3% (FY19: 5.6p)
- Stated before exceptional and other items but including net impairment on financial losses
- The adoption of IFRS 16 has decreased both underlying PBT and statutory reported profit by £0.1m
4
FULL YEAR RESULTS MAY 2020
OPERATIONAL HIGHLIGHTS
- Strategically important acquisition of Redline in December 2019
- Redline further diversifies and increases visibility of the Group's revenues
- Safety & Security (S&S) gross profit of £4.6m, up 9.5%, driven by Redline
- S&S now contributes 13.5% to the Group's gross profit (FY19: 11.9%)
- Tough trading period for Charter division, down 5.1% on prior year at £29.6m, driven by no significant one-off events during the year
- Delivering on prior year investments in offices and people, with US PJ up 42.5%
- Investment made in three new offices: Houston (Q1), Singapore (Q1) and Dubai (Q4)
- Significant government contract win in Europe for Charter division
- New hire - Managing Director of Charter for EMEA
- Group formed strategic partnership with Northcott Global Solutions
5
FULL YEAR RESULTS MAY 2020
AIR PARTNER'S CUSTOMER OFFERING1
CHARTER
P R I V AT E
J E T S
GR OU P
CH AR T ER
SP ECI ALI ST | FR EI GH T |
SER VI CES 2 |
SAFETY & SECURITY
R EGULAT OR Y &
COM P LI AN CE
T R AI N I NG & | |
CON SULT AN CY | |
FAT I GUE R I SK | AUDI T I N G |
M AN AGEM EN T |
MANAGED SERVICES
WI LD LI FE
H AZAR D
M AN AGEM EN T
AI R CR AFT R EGI ST R Y
SER VI CES
Diverse Global
Customer Base
- Airline operators
- Military & civil organisations
- Regulators
- Airports
- Oil & Gas
- Sports
- MICE
- Corporates
- Individuals
1 | This slide is illustrative of our services and is not a breakdown of our divisional structure |
6 2 | Specialist Services is a range of aviation services that complement our Charter business - Scheduled Group Travel, Tour Operations, Air |
Evacuation, Remarketing & ACMI, and Flight Operations |
FULL YEAR RESULTS MAY 2020
STRONG GEOGRAPHIC PRESENCE
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 military organisations.
7
FULL YEAR RESULTS MAY 2020
STRATEGY IN ACTION
New offices opened in Houston, | ||
Acquisition of Cabot Aviation | Singapore and Dubai | |
(Air Partner Remarketing) | Acquisition of Redline for £10.0m in | |
Acquisition of Baines Simmons | New York office opened | December 2019 |
Customer First initiative launched | Acquisition of SafeSkys | Strategic partnership formed with |
Northcott Global Solutions |
2015 | 2016 | 2017 | 2018 | 2019 |
Acquisition of Clockwork Research | Upskilling of key positions |
and Board capabilities | |
Baines Simmons wins 10 year Isle of | |
Man contract | Accounting review and |
subsequent process controls | |
and improvements | |
Los Angeles office opened |
2010: Military
contracts
> 60% of gross profits
2020: No one customer
> 10% gross profits
Safety & Security
contribution to Group
gross profit
13.5%
8
FULL YEAR RESULTS MAY 2020
REDLINE - STRATEGIC ACQUISTION RATIONALE
- A global leader in the provision of government-standard security training, consultancy and solutions to regulated, high value and high threat environments
- Acquired in December 2019 for a total consideration of £10.0m, initial consideration of £8.0m and deferred consideration of up to £2.0m
- In line with our strategy, Redline will be earnings enhancing in the first full year of ownership and improves our quality of earnings
- Pre-acquisitionin the year ended 31 March 2019, Redline generated revenue of £6.5m and adjusted EBITDA of £0.8m
- Provides long term visible contracted revenues through to 2023, with blue chip global customer base
- Holds proprietary software and technology that will provide recurring revenues and can also be leveraged across all existing businesses within S&S division
- Brings opportunity to leverage existing customer relationships and cross sell between Charter and S&S
- Brings additional management bandwidth and expertise to S&S division
9
FULL YEAR RESULTS MAY 2020
REDLINE PRODUCTS AND SERVICES
COMPLIANCE MANAGEMENT | ICAO TRAINING | |
Features of Redline's | Currently only 1 of 35 centres | |
proprietary SeMS systems: | worldwide to offer ICAO | |
• Uses web based cloud | training. Training available | |
for: | ||
architecture | ||
National inspectors | ||
• Uses a flexible dashboard | • | |
supported by a suite of | • | Crisis management |
functional add ins | • | Air cargo and mail |
• Full drill down and visibility | security | |
to allow any risk to be | • | Instructors |
assessed from top to | ||
bottom | ||
• Full tech support from | ||
Redline |
E-LEARNING
Redline's comprehensive e- product line provides instant access to industry leading training delivered through a state-of-the-art online
training platform
QUALITY ASSURANCE
Consists of:
- Covert and overt testing
- Redline reporting system
- Physical security systems audit
REGULATORY TRAINING
Recognised as an "Outstanding" training provider against the CAA quality assurance framework
10
Useful info:
- Blue chip global customer base
- 40 active customers spread across governments, corporates and sports sector
- Long term contracts that deliver revenues beyond 2023
- Top 6 customers have renewed long term contracts over last 12 months
FULL YEAR RESULTS MAY 2020
AIR PARTNER: KPIs
PUTTING OUR CUSTOMERS | BROADENING OUR OFFER | GROWING ORGANICALLY: | DEVELOPING AND RETAINING | MAINTAINING AND | ||||
FIRST | STRENGTHENING OUR CORE | OUR PEOPLE | ENHANCING OUR BRAND | |||||
BUSINESS | IDENTITY | |||||||
• Continued roll out of CRM | • Acquisition of Redline | • | US footprint increased | • | Implementation of Air | • Measured roll out of | ||
and booking tool. Will | further broadens our | with launch of Houston | Partner Career | new Air Partner brand - | ||||
improve customer | portfolio of aviation | office in Q1 | Development Framework, | unifying the Group | ||||
experience/ information | products and services, | • | Singapore office opened | launched in the UK during | under one brand | |||
requests and facilitate | while diversifying and | H2 | umbrella | |||||
in Q1 with a focus on | ||||||||
cross selling opportunities | increasing visibility of the | • | Website development | |||||
Freight and Remarketing | • | Review of UK reward | ||||||
across the Group. | Group's revenues | |||||||
practices and policies to | continues to take place in | |||||||
• Dubai office opening in | ||||||||
• | Our experienced and | • As a result of this | ensure we are aligned | preparation for new | ||||
Q4 | ||||||||
dedicated teams | diversification of services, | with brand values | website launch in FY21 | |||||
continue to deliver | gross profit for S&S is up | • | Delivering on PYR | • | Senior management team | • | New brand values | |
outstanding customer | by 9.5% and the division | investments in offices and | embedded into | |||||
upgraded - New MD of | ||||||||
service to our worldwide | now contributes 13.5% to | people with US PJ gross | employee training | |||||
Charter for EMEA | ||||||||
customer base | the Group's gross profit | profit up 42.5% | programme and | |||||
• | Net Promoter score: 89% | and increasing | • Continued to recruit in key | onboarding of new staff | ||||
at January 2020 | • We continue to review | areas of the business, | ||||||
• | Feefo Platinum Trusted | acquisition opportunities | notably in the US PJ and | |||||
Service Award | and remain selective in | Freight divisions, attracting | ||||||
our approach | talent from our | |||||||
competitors and further | ||||||||
afield | ||||||||
11 |
FULL YEAR RESULTS MAY 2020
Joanne Estell
Chief Financial Officer
FULL YEAR RESULTS MAY 2020
FINANCIAL HIGHLIGHTS
£m's - unless otherwise stated | January | January | Change |
20 | 19 | (%) | |
Gross transaction value | 236.8 | 273.3 | -13.4% |
Gross Profit | 34.2 | 35.5 | -3.7% |
*Admin expenses (inc. net impairment losses on financial assets) | 29.4 | 29.5 | -0.2% |
*Underlying operating profit | 4.8 | 6.0 | -20.5% |
*Underlying profit before tax | 4.2 | 5.8 | -27.6% |
Statutory profit before tax | 0.9 | 3.4 | -73.5% |
Underlying basic EPS (pence) | 6.4p | 9.6p | -33.3% |
Basic EPS (pence) | 0.6p | 5.6p | -89.3% |
Final Dividend (pence) | 0.0p | 3.85p | -100.0% |
Total Dividend (pence) | 1.8p | 5.6p | 67.9% |
13 *Stated before exceptional and other items
FULL YEAR RESULTS MAY 2020
PROFIT RECONCILIATION
£m's Underlying profit before tax
Change of Board composition Costs relating to the accounting review and associated items Amortisation of purchased intangibles Acquisition costs Abortive acquisition costs
Cost incurred and provision for outflows resulting from French tax investigation
Impairment of goodwill Settlement of historical legal disputes Release of deferred consideration Statutory reported profit before tax (£m)
January | January |
20 | 19 |
4.2 | 5.8 |
(0.2) | (0.4) |
(1.3) | |
(0.6) | (0.4) |
(0.6) | |
- | (0.5) |
(0.7) | |
(1.9) | |
0.4 | |
0.3 | 0.2 |
0.9 | 3.4 |
14
FULL YEAR RESULTS MAY 2020
GROSS PROFIT BY DIVISION
18.0 | |||||
16.0 | 15.9 | ||||
14.7 | |||||
14.0 | |||||
12.0 | 11.7 | ||||
10.4 | |||||
10.0 | |||||
8.0 | |||||
6.0 | 4.9 | 4.6 | 4.2 | ||
4.0 | 3.2 | ||||
2.0 | |||||
0.0 | |||||
Group Charter | Private Jets | Freight | Safety & Security | ||
Jan-20 | Jan-19 |
100.0% | |||||||||
90.0% | 13.5% | 11.9% | |||||||
80.0% | 9.2% | 13.8% | |||||||
70.0% | |||||||||
60.0% | 34.2% | 29.3% | |||||||
50.0% | |||||||||
40.0% | |||||||||
30.0% | |||||||||
20.0% | 43.1% | 44.9% | |||||||
10.0% | |||||||||
0.0% | |||||||||
Jan-20 | Jan 19 | ||||||||
Group Charter | Private Jets | Freight | Safety & Security | ||||||
15
- Group Charter down 7.5%, due to:
- A key UK customer delaying a significant flying programme
- Lack of major one off event in 2019
- Decreased tour operations activity in France
- Private Jets GP increased by 12.5%, driven by strong US performance, up 42.5%
- Freight GP down 34.7%, owing to significant PRY humanitarian aid activity
• S&S up 9.5%, supported by the acquisition of Redline
- Group Charter remains largest division at 43.1%
- Private Jets contributes 34.2% to the Group's GP, driven by the strong growth in the US
- Freight has decreased due to significant PRY comparison
- S&S now contributes 13.5% of total GP with Redline contribution
FULL YEAR RESULTS MAY 2020
GROSS PROFIT BY REGION
20.0 | |||||
18.0 | 17.4 | 17.4 | |||
16.0 | |||||
14.0 | |||||
12.0 | |||||
10.0 | 9.9 | ||||
8.7 | 8.1 | ||||
7.8 | |||||
8.0 | |||||
6.0 | |||||
4.0 | |||||
2.0 | 0.2 | 0.1 | |||
0.0 | |||||
UK | Europe | ROW | US | ||
Jan-20 | Jan-19 |
- US broadly flat year despite growth in PJ. Growth could not offset high PYR comparator in Freight activity
- UK in line with last year, where S&S and UK Freight growth has helped negate a key customer delay in Group Charter
- Europe 11.9% down on last year, principally due to a sharp drop in the tour operations activity in France and softening of Private Jets market, partially offset by good growth in Germany and Austria
16
100.0% | |||||||||
90.0% | 22.9% | 22.8% | |||||||
80.0% | 0.5% | 0.1% | |||||||
70.0% | |||||||||
60.0% | 25.6% | 28.0% | |||||||
50.0% | |||||||||
40.0% | |||||||||
30.0% | |||||||||
20.0% | 51.0% | 49.1% | |||||||
10.0% | |||||||||
0.0% | |||||||||
Jan-20 | Jan 19 | ||||||||
UK | Europe | ROW | US | ||||||
- 49% of GP coming from outside UK
- US contribution remains steady at 22.9%, despite significantly reduced Freight GP in the year
- Investment in Houston, Singapore and Dubai initially increases the cost base, however we expect to see a return within 12 to 18 months
FULL YEAR RESULTS MAY 2020
ABBREVIATED STATEMENT OF FINANCIAL POSITION
£m's | January | January |
20 | 19 | |
Intangible assets | 20.5 | 11.6 |
Tangible assets | 1.0 | 0.9 |
Right of use assets | 6.7 | 0.0 |
Trade and other receiv ables | 18.8 | 19.1 |
JetCard bank balances | 16.7 | 17.7 |
Other cash balances | 4.6 | 7.5 |
Other current assets | 0.3 | 0.3 |
Trade and other payables | (5.7) | (8.0) |
Deferred income and JetCard deposits | (24.7) | (25.4) |
Current lease liabilities | (5.4) | 0.0 |
Other current liabilities | (6.1) | (5.0) |
Deferred consideration | (2.3) | (0.8) |
Deferred tax (net) | (1.5) | (0.3) |
Borrowings | (11.5) | (5.5) |
Long term lease liabilities | (1.9) | 0.0 |
Other long term liabilities | (0.4) | (0.2) |
Net assets | 9.2 | 11.7 |
17
- Intangible assets movement includes the goodwill resulting from the acquisition of Redline (£3.6m) and the impairment of SafeSkys (£1.9m)
- Intangible asset movement also includes £7.5m of intangibles acquired on acquisition of Redline, offset by the £0.6m of amortisation charge in intangibles acquired on acquisition
- Borrowing is comprised of the group's revolving credit facility
- Net debt excluding IFRS 16 leases is £6.9m
- Net debt including IFRS 16 leases is £14.2m
- Deferred consideration of £2.3m in the current year relates to the acquisition of Redline. £0.3m has been settled post year end. Prior year balance of £0.8m relating to SafeSkys was settled in the year, with £0.4m paid out
- Adoption of IFRS 16 has decreased net assets by £0.2m. The right of use assets at year end included £4.0m for an aeroplane, £1.5m for property and £1.2m for other assets. Prior year has not been restated, as permitted under IFRS
- Air Partner has a clean going concern position as at 22nd May 2020
FULL YEAR RESULTS MAY 2020
CASH FLOW BRIDGE
- The adoption of IFRS16 has increased depreciation by £5.4m and introduced a corresponding repayment of finance leases by £5.4m with the difference going to working capital movements
- Increased borrowing was used to finance the acquisition of Redline
- Within Capex there is software at £0.4m (PYR £0.3m) and other Capex £0.5m (PYR £0.1m)
- Increase in capex driven by new contract wins in WHM
18
FULL YEAR RESULTS MAY 2020
Mark Briffa
Group Chief Executive
FULL YEAR RESULTS MAY 2020
CHARTER
GROUP CHARTER
Gross profit decreased £1.2m to £14.7m, down 7.5%
- Germany and Austria strong performance driven by government and automotive sector work
- Significant reduction in our French tour operations activity due to reduced operator base
- A key UK customer suspended a complex global flying programme for 12 months
- A lack of one off major events in 2019 comparable to prior year
Group Charter Private Jets Freight
PRIVATE JETS | 11% |
Gross profit increased £1.3m to £11.7m, up 12.5% | 50% |
• Strong performance in US ad hoc, with gross profit up 42.5%. | 39% |
- JetCard membership up 32% on prior year for US
- UK and Europe key customers flying less due to the geo-political environment
Charter gross profit split
FREIGHT
Gross profit decreased £1.7m to £3.2m, down 34.7%
- UK performance strong with gross profit growth of 26.3%, driven by strong demand for AOG (aircraft on ground) and OBC (on board courier)
- European gross profit down 11.2%, driven by the macro-economic climate
- Freight in the US down due to significant prior year comparator
20
FULL YEAR RESULTS MAY 2020
SAFETY & SECURITY (S&S)
SAFETY & SECURITY
Division gross profit increased by 9.5% to £4.6m
- S&S contributes 13.5% of overall group gross profit, up from 11.9% contribution in the prior period
- S&S contributes £0.9m underlying operating profit - growth of 50% on the prior period (on a like for like basis, adjusting for Redline, operating profit grew by 10.1%)
Redline
- Strategically important acquisition for the Group, further diversifying our non core charter business
- Two significant contract wins in FY21
- Integration plan progressing well, headed by MD of S&S Paul Mason
Baines Simmons
- Good contract wins within Fatigue Risk Management with clients such as Air France and BP
- Feefo Platinum Award has been won on the back of exceptional customer feedback
13.5%
Safety & Security
contribution to Group
gross profit
Managed Services
•
•
Three new wildlife hazard management contracts have been won and all existing contracts have been retained Following a strategic review, the decision was taken not to renew two air traffic control contracts post year end
21
FULL YEAR RESULTS MAY 2020
OUTLOOK
- Strong start to FY21 with Q1 delivering unaudited results of £6.0m underlying profit before tax
- Anticipating a positive Q2 for FY21 with strong forward order book for the rest of May and June
- Visibility beyond this point is currently very limited, with significant uncertainty around COVID-19
- Normalised cash at the end of Q1 was £13.2m (after adjusting for JetCard, significant advance payments and customer deposits)
- In addition to the £13.2m of normalised cash, the Group has access to a further £3.0m from its existing banking facilities
- Guidance and dividend expectation currently under review. This will be re-evaluated once the risks related to COVID-19 have subsided
- Redline to be earnings enhancing in first full year of ownership, despite COVID-19
- Freight expected to remain strong throughout Q2 of FY21
- Early signs of recovery in Private Jets in the US and UK
- Government contracts continuing to deliver to the core Charter business
- Significant long term contract wins and renewals expected in Redline during the year
22
FULL YEAR RESULTS MAY 2020
Appendix
FULL YEAR RESULTS MAY 2020
AIR PARTNER: DIVISIONAL STRUCTURE
Charter
Safety & Security
GROUP CHARTER
PRIVATE JETS
FREIGHT
SPECIALIST
SERVICES
24
Charter of large aircraft for 20+ people for governments, corporates, sports and entertainment teams, industrial and manufacturing customers, and tour operators
Charter of smaller aircraft (up to 19 people) for corporates and HNWIs. A range of solutions from on-demand and a flexible JetCard membership programme to custom proposals, whether travelling for business or leisure
Charter and part-charter of cargo aircraft, from Learjets to the giant Antonov 225, for regular and bespoke requirements, including emergency aid drops, time-criticaldoor-to-door freight delivery and on board couriers
A range of other aviation services that complement our Charter business - Scheduled Group Travel, Tour Operations, Air Evacuation, Remarketing and ACMI, and Flight Operations
Aviation safety experts at Baines Simmons offer training, consulting and managed services such as
fatigue risk management and
SAFETY auditing. A range of services that help to advance best practice and shape safety thinking, driving continuous improvement throughout organisations globally
Redline's mission is to enhance the delivery of assured security in
regulated, high value and high threat environments. Our
SECURITY government-standard security solutions are trusted by aviation, critical national infrastructure, event security, and corporate organisations
Our range of managed | ||
MANAGED | services include Wildlife | |
Hazard Management | ||
SERVICES | ||
and Aircraft | ||
Registry Services | ||
3 | FULL YEAR RESULTS MAY 2020 |
REDLINE - PRODUCTS, SERVICES & CUSTOMERS
- TRAINING COURSES
- Aviation Security Training
- E-LearningCourses
- ICAO Courses
- Corporate, CNI & Event Security Courses
- Advanced Security
Security Services
- Consultancy
- Corporate/CNI/Event
- Transition Management
Compliance Management
- Monitoring
- SeMS (Security Management System)
- SeMS (Security Testing)
- Threat Image Recognition
- Redline TIRT
Quality Assurance and GAP Analysis
- Quality Assurance and Auditing
- Physical Penetration Testing
- SeMS Gap Analysis
25
UK Mainland Airports | Air Cargo Facilities | Airlines | |||
• | Aberdeen | • | Edinburgh | • | Qatar |
• | Birmingham | • | Glasgow | • | UPS |
• | Bournemouth | • | Motherwell | • | Eastern Airways |
• | Bristol | • | Newcastle | • | Tui Airways |
• | Cardiff | • | Leeds | • | British Airways |
• | Doncaster | • | 3x Manchester | • | Japan Airlines |
• | Durham Tees Valley | • | 2x East Midlands | • | Virgin Atlantic |
• | East Midlands | • | Birmingham | ||
• | Exeter | • | Tamworth | Critical National Infrastructure | |
• | Glasgow Prestwick | • | Northampton | • | Parliamentary Estate |
• | Liverpool | • | 10x London sites | • | Buckingham Palace |
• | London Heathrow | • | Gatwick | • | Windsor Castle |
• | London Southend | • | Stansted | • | 380+ HMG Courts |
• | Manchester | • | Network Rail | ||
• | Stansted | Overseas Cargo | |||
• | Southampton | • | Cologne | Other | |
• | Belfast | • | Hong Kong | • | Olympic venues |
• | Bangkok | • | Sports Clubs & Stadia | ||
Overseas Airports | • | Singapore | • | Foreign Governments & | |
• Paris CDG & Orly | • | Mexico | Departments | ||
CAA | |||||
• | Gibraltar | • | Portugal | • | |
United Nations | |||||
• Jersey, Guernsey & IoM | • | ||||
FULL YEAR RESULTS MAY 2020
TOP TEN SHAREHOLDERS
1 Share register analysis at 20th April 2020
26
FULL YEAR RESULTS MAY 2020
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Air Partner plc published this content on 22 May 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 May 2020 06:11:09 UTC