marketing end of year review 2018 - air partner · half year results presentation - october 2019...

HALF YEAR RESULTS PRESENTATION

- OCTOBER 2019

For the half year to 31 July 2019

Interim Results


- 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 fromthose expressed or implied by forward looking statements. Forward looking statements cover all matters which are not historical facts and include, without limitation, projectionsrelating to results of operations and financial conditions and Air Partner plc’s plans and objectives for future operations. These may include, without limitation, discussions ofexpected future revenues, financing plans, expected expenditures, risks associated with changes in economic conditions, the strength of the aviation markets in the jurisdictionsin 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 futureperformance. 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. Otherthan 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), AirPartner 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 inthis presentation shall exclude any liability under applicable laws that cannot be excluded in accordance with such laws.

2


- OCTOBER 2019

Mark Briffa

Group Chief Executive


- 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

4

1 Stated before exceptional and other items but including net impairment on financial losses2 The adoption of IFRS16 has decreased both underlying and statutory profit before tax in the current period by £0.1m


- 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

5


- 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

6

PRI VATEJETS

Group Charte r*

JETCARD FRE I GHT

REGULATORY &

COM PLI ANCE

FAT I GUE R I SK

M ANAGEM ENT

WI LDL I FE

HAZARD

M ANAGEM ENT,

ATC M ANAGED

SERVI CES


- OCTOBER 2019* Group Charter was previously known as Commercial Jets


- OCTOBER 2019

LONG TERM GROWTH STRATEGY

8

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


- 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)

9HALF YEAR RESULTS PRESENTATION

- OCTOBER 2019


- OCTOBER 2019

Putting our customers first Broadening our offerGrowing 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 opportunities for the Group.

• Our experienced and dedicated teams have continued to deliver outstanding 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 our 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

10


- OCTOBER 2019

Joanne Estell

Chief Financial Officer


- OCTOBER 2019


£m’sunless otherwise stated

July 2019 July 2018FYR

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

12 *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


- OCTOBER 2019

PROFIT RECONCILIATION

13

£m’s July 2019 July 2018FYR

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


- OCTOBER 2019

GROSS PROFIT BY DIVISION

7.2

6.0

1.9 2.1

8.4

5.4

1.52.0

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 TrainingJul-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

14

* Group Charter was previously known as Commercial Jets


- OCTOBER 2019

GROSS PROFIT BY REGION

8.4

4.9

3.7

0.1

8.5

5.5

3.2

0.20.0

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%

15


- OCTOBER 2019

ABBREVIATED STATEMENT OF FINANCIAL POSITION

£’msJuly 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 11.716

• 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


- 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

17

25,154

28,357

7,462

9,822

3,108 123

3,429

(421) (430)

8431,554

(593)

(2,718)

(2,011)(296)

615

0

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

JetCardJetCard

17,69218,535

Non-JCNon-JC


- OCTOBER 2019

Mark Briffa

Group Chief Executive


- 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

19


- 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

20

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


- 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

21


- OCTOBER 2019

Appendix


- OCTOBER 20193

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

SUPPORTSERVICES

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

IncludesREMARKETING

A global aircraft remarketing service akin to used

sales, covering both commercial and private jets

CHARTER CONSULTING & TRAINING / MANAGED SERVICES

23

AIR PARTNER: TWO DIVISIONS

BAINESSIMMONS

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

of the aviation industry


- OCTOBER 2019


£m’sunless otherwise stated

July 2019 July 2018FYR

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

24 *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

marketing end of year review 2018 - air partner · half year results presentation - october 2019...

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