TIDMAIR
RNS Number : 4770D
Air Partner PLC
27 April 2017
27 April 2017
Air Partner plc
Preliminary results for the year ended 31 January 2017
Air Partner delivers strong full-year profits and good strategic
progress
Air Partner plc (Air Partner or Group), the global aviation
services group, today reports results for the year ended 31 January
2017.
January January
2017 2016 Change (%)
Gross transaction
value (GBPm) 215.8 210.8 2.4
Gross profit (GBPm)
* 31.7 27.3 16.3
Underlying profit
before tax (GBPm) 5.1 4.3 17.2
Statutory profit before
tax (GBPm) 4.3 3.1 38.6
Cash (#) 19.8 19.8 -
Underlying basic EPS
(p) 6.5 5.9 10.2
Basic continuing EPS 5.4 3.7 45.9
Final dividend (p) 3.6 3.4 6.0
Total dividend (p) 5.2 4.9 7.2
* The statutory revenue amount is GBP42.5m (2016: GBP49.9m)
'Underlying' excludes other items (see note 3) and discontinued
operations.
# Includes JetCard cash of GBP15.9m (2016: GBP16.8m)
Financial highlights:
-- Underlying PBT of GBP5.1m, an increase of 17.2%
-- Gross margin up 180bps to 14.7% (12.9%)
-- Underlying EPS of 6.5p, an increase of 10.2%
-- Statutory PBT rose by 38.6% to GBP4.3m after GBP0.7m of other items
-- Including JetCard, total cash balances of GBP19.8m (GBP19.8m)
-- Excluding JetCard, Group cash balances of GBP3.9m (GBP3.0m)
and net cash of GBP1.0m (net debt of GBP0.5m)
-- Proposed final dividend of 3.6p, an increase of 6%, taking
the total dividend for the year to 5.2p, an increase of 7.2%,
covered 1.3X by underlying EPS
Operating highlights:
-- Business mix: Consulting & Training division contributed
10% of the Group's underlying profit before tax
-- Broking:
o Commercial Jets strong, JetCard exceptional, Freight
disappointing, Remarketing and ACMI both performed well
o Good new business performance, particularly with sports
-- Consulting & Training
o Fully integrated and well positioned in the market
o Awarded Isle of Man Aircraft Registry contract for 10 years in
April 2016
o Good new business performance
Strategic highlights:
-- Clockwork Research, a fatigue risk management consultancy, acquired in December 2016
-- Cabot Aviation rebranded as Air Partner Remarketing
-- New York office opened
-- Share split and dividend policy confirmed
-- Clear long-term strategy in place
Outlook:
-- Trading has commenced in line with the Board's expectations
and this, together with the pipeline of work for the next quarter,
means that we begin the 2017/2018 financial year with a degree of
optimism
Mark Briffa, CEO of Air Partner, commented: "I am extremely
pleased to be reporting on a year of significant activity and
progress. We have delivered an outstanding service for our
customers, and in doing so produced strong financial results, with
profits and dividend in line with expectations. These results are
beginning to reflect the last two years' hard work and commitment
by colleagues across the Group to position Air Partner for the
years ahead. With a clear long-term strategy to transform our
business mix, we intend to improve the quality and visibility of
our earnings and consequently the returns we deliver to the owners
of our business."
Air Partner 01293 844788
Mark Briffa, CEO
Neil Morris, CFO
Temple Bar Advisory (Financial PR adviser) 020 7002 1080
Tom Allison 07789 998 020
Ed Orlebar
Alycia MacAskill
CHAIRMAN'S STATEMENT
The Group has a clear long-term strategy to become a world class
global aviation services group. Great progress has been made since
we began this transformation in 2014, and the period under review
has been no exception. Indeed, it has perhaps been the most active
and successful period we have experienced during my 12 years at Air
Partner.
The results of our long term strategy are beginning to
emerge
I am pleased to report a strong performance for the year ended
31 January 2017. Gross profit rose by 16.3% to GBP31.7m, underlying
profit before tax increased by 17.2% to GBP5.1m and reported profit
before tax by 38.6% to GBP4.3m.
As I have mentioned in prior reports, in 2014 we took a
thoughtful and critical look at our industry to evaluate not only
our own market position, but the challenges and opportunities that
lie ahead. As part of that process we undertook an extensive
programme of engagement with our staff and customers to understand
not only their needs, but their expectations of us. No stone was
left unturned and we looked far into the future to assess what we
wanted to be, where we wanted to be, and, just as importantly,
where we did not want to be.
We formed a long-term strategy that places the customer first
and has the power to transform our business model, reducing
volatility and improving the overall quality of our earnings. This
year, the results of this long-term strategy are beginning to
emerge.
Maintaining a progressive dividend
We are proposing a final dividend of 3.6p, taking the full year
dividend to 5.2p, an increase of 7.2% and equivalent to 1.3 times
dividend cover. Our policy is to target cover between 1.5 and 2.0
times underlying earnings per share. Cover this year is below that
range, due to a GBP0.4m prior year adjustment for tax that is a
one-off occurrence. Subject to approval at the AGM on 28 June 2017,
we expect to pay the final dividend on 5 July to those shareholders
on the register at close of business on 9 June.
Board changes
During the period we completed the alignment of our Board to
reflect the direction our Group is taking on its long term
strategy. Accordingly we welcomed Amanda Wills CBE, Shaun Smith and
Richard Jackson to the Board of Air Partner, effective 20 April, 1
May and 8 September 2016, respectively.
Having overseen these changes we announced on 2 February 2017
that I would be standing down as Chairman at the next AGM on 28
June 2017 after 12 years as a Non-executive director at Air
Partner. I am delighted to announce that following a formal
selection process, Peter Saunders, our current Senior Independent
Director, will be my replacement as Chairman effective from that
date, subject to his re-election at the AGM. Peter has played an
important role in our transformation and the development of our
long-term strategy and I trust will continue to both support and
challenge the Executive team in the years ahead.
Thank you
Air Partner is a unique company. Our plc status is a key
strength: it offers customers, employees and shareholders - indeed,
all our stakeholders - reassurance that we operate to the highest
standards of governance and ethics, and are transparent in all our
finances and business dealings. Over the last five years since I
became Chairman, it has been my privilege to witness the
development of Air Partner from a pure broking business, to the
vibrant, diverse aviation services company it is today. People are
at the heart of our business, and it remains for me to thank my
colleagues on the Board and across the whole Group for their
support and hard work, not only in delivering a great set of
results for our shareholders this year, but also in creating a
strong platform for growth. I wish you all every success into 2017
and beyond.
Outlook
Trading has commenced in line with the Board's expectations and
this, together with the pipeline of work for the next quarter,
means that we begin the 2017/2018 financial year with a degree of
optimism. The Board remains confident that the Group's long-term
strategy to become a world-class aviation services group will
continue to create shareholder value.
Richard Everitt, Chairman
CHIEF EXECUTIVE'S REVIEW
The Group has made great progress during the year, delivering an
underlying profit before tax of GBP5.1m, a 17.2% increase
year-on-year. As ever, these results reflect the dedication and
drive of all our staff who continue to put our customers first,
providing an unrivalled and differentiated service in our
sector.
One Group, two divisions
The Group is structured into two complementary divisions:
Broking, which delivers Aircraft Charter and Remarketing services,
and Consulting & Training, which delivers professional
services, predominantly in the aviation safety sector. Both
divisions operate internationally, servicing a high quality
customer base. Both divisions will play important roles in
delivering our long-term strategy to become a world class global
aviation services group with a balanced business mix between the
two.
Our Aircraft Broking division has performed well this year,
achieving a gross profit of GBP26.1m and an underlying operating
profit of GBP6.6m which compare to GBP25.2m and GBP6.1m
respectively in the prior year. This masks a better underlying
performance, with some significant new business wins replacing a
contract we expected not to be renewed as we entered the year.
These new business wins were a result of some excellent teamwork,
creativity and innovation by our people delivering solutions to
some of our customers' most complex and technical needs. Our
'Customer First' approach is delivering, and helping us measure,
better levels of service and partnership with our most valued
customers. As a result we are seeing increased customer loyalty,
and with a greater portfolio of products we are seeing the breadth
of our activity with valued customers expand.
During the year we took steps to further enhance our Private Jet
and JetCard offer, and we expect to evolve this product in the
years ahead to reflect the lifestyle needs of our customers. In
April 2017 we announced an exciting global strategic partnership
with Camper & Nicholsons International. Since 1782, they have
been synonymous with the world's leading yachts, and today are a
global leader in all luxury yachting activities, specialising in
their charter, sale, purchase, marketing, management and
construction. This partnership provides customers with a one-stop
shop for all luxury air and sea-based travel needs. Other
initiatives are under way to further enhance our product and I hope
to be able to report to you in the future about some innovative
work we are doing to make our customer experience the very best it
can be.
Air Partner Remarketing - formerly Cabot Aviation - also
completed some significant projects in the year and the pipeline
for the year ahead looks good. I believe the long-term outlook for
our Remarketing operation is excellent as we work with more
international customers and add scale to the operation. Remarketing
will be a beneficiary of organic investment and focus, and while we
will not rush anything, we hope to have a significantly larger
Remarketing business in three to five years than we do today.
This year Cabot Aviation became the first of our acquired
businesses to rebrand as Air Partner. The team, under the strong
leadership of Tony Whitty, is responsible for all Remarketing
activity at Air Partner globally and during the period we took the
decision to consolidate all our short-term leasing activities under
Tony's wing so that we can leverage our expertise and understanding
of the marketplace and service the customer better. The results
from both the rebranding and the combination have been outstanding,
and the team has a very solid foundation to grow in the years
ahead.
This report marks the first full year of operation from our
Consulting & Training division, with a contribution of GBP0.5m,
equating to 10% of our underlying profits. I am very pleased with
this maiden performance, and excited that the division is well
positioned for future success. Almost all of this comes from Baines
Simmons, our leading aviation safety consultants specialising in
aviation regulation, compliance and safety management, which has
performed well and is in a strong position to grow and develop in
the years ahead. In December 2016 - seven weeks before the end of
the financial year and 15 months after the completion of the Baines
Simmons acquisition - we acquired Clockwork Research, a leading
fatigue risk management consultancy. Integration of Clockwork
Research was carried out on time and as planned. Similar to our
Remarketing team, Clockwork will be a beneficiary of future organic
investment and focus as we assist them to scale the business.
As we work better together across the Group to deliver what the
customer needs, we expect the division's contribution to our
results to increase in future years as we strive to become a more
balanced business.
A common platform for growth
I am pleased that we have maintained our commitment to organic
investment in core systems and controls. Our technology programme,
Project Connect, began in 2014 and got us fit to compete globally.
It enabled the latest upgrades, which began in February and should
be finalised by the end of 2017. The scale of the programme cannot
be understated as it puts in place a solid foundation for future
growth and is a core enabler to successfully carry out our
long-term strategy.
We are introducing new platforms from which we can share data
across the Group and which have the ability to accommodate the
needs of any new acquisitions as soon as they come on board. This
will give us greater consistency and flexibility. We introduced the
new Group-wide finance system, which came on-stream in February,
and will be moving all of our companies onto a common CRM platform
during 2017.
Transforming the business mix
Organic growth and self-improvement are at the heart of our
long-term strategy, and by aligning ourselves closely with our most
valued customers, we are better able to identify not only new
business opportunities but also the strategic gaps across the
Group. We have identified the services and capabilities we need to
add or enhance and also identified the geographies where we need to
develop a presence or add scale. In the years ahead we will address
these strategic gaps by either building a market leading position
organically or acquiring suitable businesses and platforms.
It sounds straightforward - and as an idea, it is. The challenge
lies in execution. We recognise that every acquisition carries as
much risk as it does reward and opportunity. We will judge risk and
reward in detail before committing to acquisitions and deploying
our capital. We are able to quickly assess a business's strategic
fit on various criteria, but alongside the analysis of its
financial statements - the due diligence of financial track record
and performance and the assessment of future economic returns all
speak to value - we spend a huge amount of time getting comfortable
with the non-financial components of a business, predominantly the
people and culture.
The most important question we ask ourselves when we evaluate a
potential acquisition is 'Is this an Air Partner company?'. The
acquired business will, from day one, carry our brand or an
association with our brand, and indeed may adopt our brand in due
course, so we need to get comfortable with a lot more than just the
numbers. The strategy, product or service, capital, scale, customer
base, operating ethos and methodologies are all important, but they
are brought to life by the people and the organisation's culture.
If we cannot tick all the boxes - both financial and non-financial
- and get comfortable, we will not pursue the opportunity.
The aviation industry has many passionate and dedicated people
who are delivering great products and services. Over the years we
have had the privilege to meet great businesses and evaluated many
opportunities. There is plenty of opportunity for acquisitions, but
we are selective, looking for complementary businesses. In nearly
every instance, we are dealing direct with the owners or managers
and their decision to sell can be triggered by a variety of
business or life events. In advance of that decision we are
developing mutual trust and our understanding of the business.
We are delighted to have acquired three great businesses over
the last two years - Cabot Aviation and Baines Simmons in 2015 and
Clockwork Research in 2016. These businesses are all run by
passionate and dedicated people and deliver an exceptional service
to their customers. As well as the financial contribution, they
bring new services and capabilities to the group which our
customers and staff value, in the process making us a better and
smarter organisation.
Previous reports introduced the acquisitions of Cabot Aviation
and Baines Simmons and this year I am pleased to introduce
Clockwork Research. Clockwork brings new services and capability in
the specialist field of fatigue risk management. Clockwork uses
systems models to measure, monitor and reduce fatigue in pilots and
other key personnel, ensuring they get the necessary sleep to carry
out their tasks effectively and safely. Founded by Dr Paul Jackson
and Dr Alexandra Holmes, the business is a leader and innovator in
its field. Both Paul and Alex are dedicated and passionate about
helping customers tackle the challenges they face.
Great people
As we go forward on our journey of transformation, it's
important that we share the same vision and that all our people
understand it. Enhancing our brand is as much about our internal
audience as it is about the external, and accordingly we are
working to articulate our vision and values and enhance our
internal communications by engaging our staff across the
organisation more frequently. We can do a lot better, but we are
starting from a strong base, with a rich heritage and globally
recognised brand. We are increasingly becoming an exciting place to
work with a clear long-term strategy, with services and
capabilities that add value and enable us to compete beyond price,
and will offer steady career progression. We aim to reward good
performance and exceptional behaviour, and, as we grow, a key aim
is to retain our existing culture that keeps people at its
heart.
In January 2016, we hired Lee Pyle as Group Head of Technology.
Under his leadership, we are making a considerable investment in
technology in order to create a solid and sustainable basis for
growth.
In June 2016, we hired Julia Timms as Group Marketing Director.
During the latter part of the year she set in motion an overhaul of
the Air Partner brand, which will become the umbrella brand for all
our product offerings, including any future acquisitions. This is a
really important lever of transformation, in that it will project a
clear, unified identity to the world, enhancing our ability to
cross sell our services.
Finally, in January 2017, we appointed David McCown, who was
formerly our Vice-President for Business Development for the United
States, to become the President for our US business, a key focus
for organic growth for 2017 and beyond.
Divisional review
Broking
The period under review saw Commercial Jets deliver a strong
performance in both Europe and USA. Gross profit increased by 5.0%
to GBP14.7m (2016: GBP14.0m) and underlying operating profit
improved to GBP3.8m, an increase of 30.4% (2016: GBP3.0m). This was
driven largely by the performance of Air Partner Remarketing
(previously Cabot Aviation) for a full year, while strong
performances by tour operations, sports and government clients in
Europe were able to offset the downturn in the oil and gas market
in the UK. In the US, despite a reduced flying schedule from a key
customer, we benefited from the presidential election, working on
the Hillary for America campaign.
In the UK a one-off major oil and gas contract which operated
throughout the previous financial year came to an end, but we
continued to make gains in the sports market, particularly with a
number of Premiership football teams.
Our Emergency Planning product, whereby we map out evacuation
contingencies for blue chip companies with personnel stationed in
volatile regions, is a subscription based service and provides a
recurring income stream. The division typically serves companies
operating in unstable parts of the world, but also assists
charities with civil emergency evacuation and disaster relief.
Emergency Planning met expectations for the year and, given the
uncertainties in the geo-political environment, we believe this
business is well placed for future growth.
Air Partner Remarketing had a profitable year in its first full
year of ownership and goes into 2017 with a strong pipeline of
mandates. Key sales successes included the sale of three Kenya
B777s to a US operator. During the year, we moved short-term
leasing (ACMI) into Air Partner Remarketing and as a result ACMI
had its strongest year over the last five-year period. The
integration of Air Partner Remarketing into our offices at Gatwick
has been very smooth and successful.
Overall, Private Jets has fared well this year. Mixed results
from ad hoc business, with corporate customers flying less often,
was offset by JetCard, which had another record year. Gross profit
increased by 9.3% to GBP10.2m and underlying operating profit rose
by 4.4% to GBP2.5m. We had a great start to the year in the UK,
though ad hoc flying tailed off somewhat in the second half of the
year while conversely, in the US, we had a slow start and a strong
finish. 2017 also saw strong performance for Private Jets in
Europe, especially in Germany. JetCard utilisation has increased
41% on 2016, a fantastic achievement. Card numbers have increased
by 13 to 222 although JetCard deposits have decreased to GBP15.9m
(2016: GBP16.8m) reflecting the higher utilisation in the year.
The private jet market is extremely competitive but we believe
our Customer First strategy, which delivers an unrivalled level of
service, particularly for JetCard, together with our financial
stability, transparency and security, means we have a unique
proposition. We have some exciting initiatives under way which we
believe will further extend our services in this area and deliver
exceptional services to our customers. We continue to monitor
technology platforms in the private jet space, but we fundamentally
believe - and our customers seem to agree - that until
technological capabilities have further developed, complex travel
scheduling is better handled by people rather than machines.
Our Customer First programme remains pivotal to our operations
and we believe it accounts for a large proportion of our continuing
success. By putting our customers first, we continue to provide an
unrivalled service, together with a value for money proposition.
This formula is proving to be good for everyone who uses our
services, as well as all our stakeholders.
As part of our strategy to grow in the US, we invested in a new
office in New York, with the aim of growing our market share by
highlighting our products' flexibility and service offering.
Increased trade in US dollars will, we believe, help offset the
Brexit effect in the UK.
We have invested in sales and have made greater in-roads into
Europe where we already have a solid foothold. We have also started
to offer additional services like controlled catering and have
received enthusiastic feedback from our customers who, in this
class, are extremely discerning and used to high standards.
Furthermore, and as discussed, we went into partnership with Camper
& Nicholsons International, the luxury yacht specialists, in
April 2017.
Air Partner is primarily a passenger business, but we see
Freight as a strategic, protective offering which allows us to
offer a full aviation service to customers. From a small base we
can add value - a good example being the German automotive
business. The year's performance in that particular market was
buoyant, and complements our service offering from Commercial Jets
in the automotive sector.
However, overall, Freight's performance reflected the high prior
year comparable, boosted by one key contract, which was not
renewed. The downturn in the oil and gas industry, where Freight
has traditionally been involved with the transportation of heavy
pipes and other drilling gear, also meant a less busy period, with
gross profit of GBP1.1m (2016: GBP1.9m) and underlying operating
profit of GBP0.2m (2016: GBP0.8m). The division is always subject
to the unpredictability of just-in-time logistics, from moving
aircraft or automotive spares to mobilising at a moment's notice to
assisting in disaster recovery.
Consulting & Training
In its first full year of operation, our Consulting &
Training division delivered a gross profit of GBP5.7m and an
underlying operating profit of GBP0.5m, equivalent to 10.3% of the
Group total. Baines Simmons delivered good results in its first
full year of ownership while in December 2016, the acquisition of
Clockwork Research strengthened our Consulting & Training
proposition. Over the coming year, we have an ambitious plan for
the continuous development of SMARRT MAP (Safety Management and
Risk Reduction Tool Measurement and Performance), which will
enhance our overall proposition and further strengthen the
relationship between our Consulting & Training services.
The introduction of Customer First into Baines Simmons has
established strong foundations for the future and by the end of the
year. By standardising many of our processes we can ensure the
consistent high-quality delivery of our products and services. We
constantly review these products and services to ensure they are
aligned to our customers' needs.
The integration of shared Group services, such as marketing,
finance, HR and IT, was largely completed during the year.
Baines Simmons continued to benefit from a number of large and
long-term customer programmes which cut across both consulting and
training products and services, while our Aviation Safety Academy
experienced its best ever monthly performance in November.
In April 2016 we announced that we had been successful in
securing a further 10-year contract to provide aviation support
services to the Isle of Man Aircraft Registry (IOMAR). In January
2017, IOMAR was named Best Global Aviation Registry in World
Commerce Review Magazine's 2017 awards. IOMAR will celebrate its
10-year anniversary in May 2017 and since launch almost 950
aircraft have been registered, highlighting the continued success
of the Registry, which is now the sixth largest private/corporate
aircraft registry in the world.
Clockwork Research, with its smart innovations in fatigue
management, is a natural fit with Baines Simmons in terms of safety
control and risk management. It strengthens our offering and the
opportunities are good. Headed by a small team of enterprising
academics, Clockwork is very well respected by major operators
across the world. The business uses systems models to ensure that
pilots and other essential personnel are getting the necessary
sleep to carry out their tasks effectively and safely. The pipeline
of future projects is encouraging, and includes a large project
with a fleet operator in Asia to carry out a large-scale research
study and then help them to build a fatigue management system. This
is a first for the region.
Outlook
We're on a journey of transformation and 2016 has been an
encouraging year on a number of fronts. The path ahead is exciting
but as we always state, in the world of aviation, and most
especially in the charter industry, we must be cautious when
managing expectations. The charter business has always been, and
will continue to be, a volatile industry. Despite this, over nearly
six decades, we have developed our business and adapted to grow and
succeed.
We are confident we have a successful and very clear long-term
strategy. Despite the volatility of our markets we manage the
operational business for long term success, aligned to our
customers and trying our best to exceed their most complex and
technical needs.
Our objective is to become a balanced business, with two market
leading divisions - Aircraft Broking and Consulting & Training
- delivering exceptional service and value to the customer, and as
a consequence, high quality and increasingly visible earnings to
our shareholders. This will add value to our customers and staff
and build real value to the owners of our business.
Aircraft Broking still accounts for 90% of our profits, but in
the future we expect our business mix to evolve significantly,
driven by organic growth and suitable acquisitions. Our organic
investments are rewarding us and we have some exciting initiatives
under way. Our newly acquired businesses have delivered strong
operational performance and made an excellent first full year
financial contribution to the Group. We will continue to build
relationships with the owners and managers of suitable businesses
we have identified as potential acquisitions, but we will remain
patient and keep to our strict evaluation criteria.
Mark Briffa, Chief Executive Officer
FINANCIAL REVIEW
A strong balance sheet
In a crowded market with low barriers to entry, we are able to
use our financial position to differentiate our services to key
customers through our ability to offer favourable credit terms on
large projects, as evidenced by the movement in working capital and
non-JetCard cash at the balance sheet date. In addition, we have
expanded our service offering to pursue the strategy of becoming a
global aviation services company through the acquisition of
complementary businesses using cash or debt. Subsequent to the
balance sheet date, the loan outstanding at 31 January 2017 was
refinanced through a revolving credit facility of GBP7.5m which, in
combination with an overdraft facility, provides the Group with
GBP9m of facilities in addition to non-JetCard cash.
Financial overview
Revenue: Air Partner primarily uses gross profit as its key
indicator of business performance given the potential for revenue,
as determined under IFRS, to fluctuate depending on the number of
contracts enacted in the year where we act as principal, as opposed
to agent. The reduction in revenue of GBP7.4m to GBP42.5m (2016:
GBP49.9m) is due to the non-repeat of a specific oil and gas
contract which ended early in 2017.
Underlying operating profit: Underlying operating profit
increased by 16.6% to GBP5.1m (2016: GBP4.4m), with the majority of
the increase being attributable to the improved performance of the
Consulting & Training division. Excluding the impact of Air
Partner Remarketing's results from the Commercial Jets segment, our
legacy business's performance decreased by GBP0.1m, or 2.9%, on a
like-for-like basis.
Other items: Other items comprise restructuring costs,
amortisation of intangible assets arising on acquisition,
acquisition related costs and non-cash acquisition related costs
(being the IFRS 2 charge arising on the share based consideration
for Air Partner Remarketing). The overall reduction in 'other
items' of GBP0.5m to GBP0.7m (2016: GBP1.2m) is due to:
1) The lower amount incurred in respect of restructuring of
GBP0.2m following the major restructuring of the Operating Board
that took place in the year ended 31 January 2016
2) Lower acquisition related costs of GBP0.1m, a reduction of
GBP0.3m, due to there being only one acquisition in the year, that
of Clockwork Research Limited.
Amortisation of intangibles arising from acquisitions of GBP0.3m
and non-cash acquisition related costs of GBP0.1m were consistent
with the prior year.
Operating profit: Operating profit has increased by GBP1.2m to
GBP4.4m (2016: GBP3.2m), due to a combination of the increased
trading performance of GBP0.7m at an underlying operating profit
level combined with a reduction in 'other items' of GBP0.5m.
Finance charges: The Group's net finance charge remained at
GBP0.1m, comprising interest on the Group's loan and interest
receivable on cash balances.
Taxation
The Group's underlying effective tax rate for the year was 33%
(2016: 30%) and has been affected by an adjustment in respect of
prior years totalling GBP0.4m. Without this adjustment, the
underlying tax rate would have been 25%. The change arose primarily
due to an adjustment in respect of a research and development claim
made in the year ended 31 January 2015.
The statutory effective tax rate for the year was 35% (2016:
39%). The lower rate being due to a reduction in amounts
disallowable for tax purposes included within 'other items'.
Financial position
JetCard cash: The reduction of GBP0.9m is a result of record
utilisation in the year outstripping the pace of new cards and
renewals. Subsequent to the balance sheet date, the Group will be
placing all JetCard funds into segregated accounts as further
assurance to our customers.
The net debt position has improved as a result of the improved
trading position increasing net cash inflow from operating
activities of GBP1.9m, less outflows for the investment in
Clockwork Research of GBP0.4m, dividends paid of GBP2.6m and
repayment of borrowings of GBP0.5m but benefiting from a foreign
exchange gain of GBP1.6m.
As noted above, the Group's bank loan, which stood at GBP3.0m at
the balance sheet date, was refinanced with a new revolving credit
facility, which has total availability of GBP7.5m, provided by Air
Partner's main bankers. The facility expires in February 2020.
With cash excluded, the Group is in a net current liabilities
position as a result of deferred income, particularly in respect of
the JetCard product exceeding other current assets.
Foreign exchange
Where possible, the Group uses natural hedging to minimise its
foreign exchange exposure, for example matching JetCard deposits
denominated in euro or US dollars with the respective deferred
income. In addition, the Group also uses derivative financial
instruments to hedge certain transactions in accordance with its
internal policy. The fair value of these instruments at the balance
sheet date was a liability of GBP9,000 (2016: an asset of
GBP36,000) and the loss recognised through the income statement as
a result in the change in fair value was a charge of GBP45,000
(2016: a gain of GBP186,000).
While Brexit has caused a degree of volatility in currency
markets during the year, given our geographical reach - with
profits arising in the US in dollars, and in Europe in euros - the
Group as a whole has not suffered adversely financially as a result
of the leave vote to date. In its charter division in the UK, the
most likely country to have a currency mismatch between income and
costs, the brokers are able to source alternative suppliers to help
mitigate any erosion of margin and also apply the Group's internal
policy on hedging when necessary. Overall, the Group's net foreign
exchange gain through the income statement for the year was a gain
of GBP20,000 (2016: gain of GBP2,000).
Neil Morris, Chief Financial Officer
Forward-looking statements
Announcements issued by Air Partner plc may contain forward
looking statements, indicated by words such as "aims", "believes,"
"expects", "intends," and similar expressions. These statements
reflect current views and expectations up to the date of approval
of this statement and are made in good faith by the directors.
Unless otherwise required by laws, regulations or changes in
accounting standards, Air Partner accepts no obligation to update
these statements as a result of future events or new information
subsequently obtained. New announcements will be made to the market
as required under the Disclosure and Transparency Rules.
Trends and factors affecting the business
Air Partner's lead times for ad hoc bookings are measured in
days or weeks, rather than months and future revenues cannot be
predicted with any certainty. Forward bookings can be impacted very
suddenly by changes in financial markets, political instability and
natural events affecting the movement of people or cargo from one
country to another. Lead times in the remarketing business can be
up to one year and therefore forecasting when a particular contract
may be realised is not always easy to predict. Economic uncertainty
affects corporate, government and individual clients and affects
the quality of supply of aircraft as operators consolidate or leave
the market. These are trends outside the Group's control but the
strategy remains to diversify to address seasonality and broaden
the client mix.
Principal risks and uncertainties facing the Group
Aircraft charter broking and remarketing can be classed as a
relatively low financial risk business, in that the business sells
capacity on aircraft owned and operated by a third party and
contracts are normally placed as mirrored transactions, or
remarkets aircraft on behalf of a third party. The Group does not
have any contractual arrangements with any significant individual
or company which are essential to continuation of the business. The
Board reviews risks which may have a significant impact on the
Group, including operational aviation-related risks (quality and
quantity of supply, adverse weather conditions, competitive pricing
pressure and regulatory changes) and financial risks such as
foreign exchange and interest rate fluctuations, credit risk and
liquidity and cash flow management. The profile of both financial
and operational risks varies from time to time but the current
level of risk is not substantially different from that as at 31
January 2016, as described in the principal risks and uncertainties
section of the annual report. The principal risk to the Group's
business remains the degree to which clients' available financial
resources and the general economic conditions in which they operate
affect their willingness to charter. The Group recognises that ad
hoc charters are likely to continue to be impacted by economic
instability in the major world markets for the foreseeable
future.
Related party transactions
There has been no significant change in the level of
transactions between Air Partner plc and its subsidiaries, since
that disclosed in the annual report for the year ended 31 January
2016, other than the addition of Cabot Aviation Services Limited.
Such transactions did not materially affect the financial position
or performance of the Group in the period under review. There are
no other related party transactions which are required to be
disclosed under DTR 4.2.8R.
Going concern
After making enquiries, the directors are satisfied that the
Group and the Company have adequate resources to continue in
business for the foreseeable future. The directors have therefore
continued to adopt the going concern basis in the preparation of
these financial statements.
Directors' responsibility statement
The responsibility statement below has been prepared in
accordance with the Company's full annual report for the year ended
31 January 2017. Certain parts thereof are not included in this
announcement.
Each of the directors serving at the date of approval of the
accounts confirms that, to the best of his knowledge and
belief:
-- the financial statements, which have been prepared in
accordance with IFRS as adopted by the European Union, give a true
and fair view of the assets, liabilities, financial position and
financial performance of the Group; and
-- the Chairman's Statement, the Chief Executive's Review and
the Financial Review, together with the supporting notes, give a
fair review of the Group, including a description of the principal
risks and uncertainties faced by Air Partner plc.
The responsibility statement was approved by the Board of
Directors on 26 April 2017.
Mark Briffa Neil Morris
Chief Executive Officer Chief Financial
Officer
26 April 2017 26 April 2017
The directors of Air Partner plc are listed on our website at
www.airpartner.com.
See more at: http://www.airpartner.com/en/investors.
Enquiries
Air Partner 01293 844788
Mark Briffa, CEO
Neil Morris, CFO
Temple Bar Advisory (Financial PR
advisor) 020 7002 1080
Tom Allison 07789 998 020
Alycia MacAskill 07876 222 703
About Air Partner
Founded in 1961, Air Partner is a global aviation services group
that provides worldwide solutions to industry, commerce,
governments and private individuals. The Group has two divisions :
Broking division, comprising air charter broking and remarketing;
and the Consulting & Training division, comprising the aviation
safety consultancies, Baines Simmons and Clockwork Research. For
reporting purposes, the Group is structured into four divisions:
Commercial Jets, Private Jets, Freight (Broking) and Consulting
& Training (Baines Simmons and Clockwork Research). The
Commercial Jet division charters large airliners to move groups of
any size. Aircraft Remarketing, which is formed within the
Commercial Jet division, provides comprehensive remarketing
programmes for all types of commercial and corporate aircraft to a
wide range of international clients. Private Jets offers the
Company's unique pre-paid JetCard scheme and on-demand charter.
Freight charters aircraft of every size to fly almost any cargo
anywhere, at any time. Baines Simmons is a world leader in aviation
safety consulting specialising in aviation regulation, compliance
and safety management. Clockwork Research is a leading fatigue risk
management consultancy. Air Partner is headquartered alongside
Gatwick airport in the UK. Air Partner operates 24/7 year-round and
has 20 offices globally. Air Partner is listed on the London Stock
Exchange (AIR) and is ISO 9001:2008 compliant for commercial
airline and private jet solutions worldwide. www.airpartner.com
Consolidated income statement
for the year ended 31 January 2017
Year ended 31 Year ended 31
January 2017 January 2016
======================================== ===============================
Other Other
Underlying* items Continuing Underlying* items Total
Continuing operations Note GBP'000 GBP'000 operations GBP'000 GBP'000 GBP'000
============================ ==== =========== ============== =========== =========== ======== ========
Gross transaction
value (GTV) 215,829 - 215,829 210,752 - 210,752
============================ ==== =========== ============== =========== =========== ======== ========
Revenue 42,538 - 42,538 49,942 - 49,942
Gross profit 2 31,707 - 31,707 27,269 - 27,269
Administrative
expenses (26,593) (709) (27,302) (22,883) (1,178) (24,061)
============================ ==== =========== ============== =========== =========== ======== ========
Operating profit 2 5,114 (709) 4,405 4,386 (1,178) 3,208
Finance income 39 - 39 10 - 10
Finance expense (96) - (96) (81) - (81)
============================ ==== =========== ============== =========== =========== ======== ========
Profit before tax 5,057 (709) 4,348 4,315 (1,178) 3,137
Taxation 7 (1,654) 153 (1,501) (1,311) 81 (1,230)
============================ ==== =========== ============== =========== =========== ======== ========
Profit for the
year from continuing
operations 3,403 (556) 2,847 3,004 (1,097) 1,907
Discontinued operations
Profit/(loss) for
the year from discontinued
operations - - - 387 - 387
============================ ==== =========== ============== =========== =========== ======== ========
Profit for the
year 3,403 (556) 2,847 3,391 (1,097) 2,294
============================ ==== =========== ============== =========== =========== ======== ========
Attributable to:
Owners of the parent
company 3,403 (556) 2,847 3,391 (1,097) 2,294
============================ ==== =========== ============== =========== =========== ======== ========
Earnings/(loss)
per share:
Continuing operations
Basic 5 6.5p (1.1)p 5.4p 5.9p (2.2)p 3.7p
Diluted 5 6.4p (1.1)p 5.3p 5.8p (2.2)p 3.6p
============================ ==== =========== ============== =========== =========== ======== ========
Discontinued operations
Basic 5 - - - 0.8p - 0.8p
Diluted 5 - - - 0.8p - 0.8p
============================ ==== =========== ============== =========== =========== ======== ========
Continuing and
discontinued operations
Basic 5 6.5p (1.1)p 5.4p 6.7p (2.2)p 4.5p
Diluted 5 6.4p (1.1)p 5.3p 6.6p (2.2)p 4.4p
============================ ==== =========== ============== =========== =========== ======== ========
*Before other items (see note 3)
Consolidated statement of comprehensive income
for the year ended 31 January 2017
Year Year
ended ended
31 31
January January
2017 2016
GBP'000 GBP'000
============================================ ======== ========
Profit for the year 2,847 2,294
Other comprehensive income - items that
may subsequently be reclassified to profit
or loss:
Exchange differences on translation of
foreign operations 346 (29)
Total comprehensive income for the year 3,193 2,265
============================================ ======== ========
Attributable to:
Owners of the parent company 3,193 2,265
============================================ ======== ========
Consolidated statement of changes in equity
for the year ended 31 January 2017
Share Own Share
Share premium Merger shares Translation option Retained Total
capital account reserve reserve reserve reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
======================= ========= ======== ======== ========= ============ ======== ========== =========
Opening equity
as at 1 February
2015 513 4,518 - (1,051) 1,093 1,485 6,753 13,311
Profit for the
year - - - - - - 2,294 2,294
Exchange differences
on translation
of foreign operations - - - - (29) - - (29)
Total comprehensive
income for the
year - - - - (29) - 2,294 2,265
Issue of shares 9 296 295 (300) - - - 300
Share option movement
for the year - - - - - 223 - 223
Deferred tax on
share-based payment
transactions - - - - - - 18 18
Share options
exercised during
the year - - - 152 - - (84) 68
Dividends paid
(note 4) - - - - - - (2,331) (2,331)
======================= ========= ======== ======== ========= ============ ======== ========== =========
Closing equity
as at 31 January
2016 522 4,814 295 (1,199) 1,064 1,708 6,650 13,854
======================= ========= ======== ======== ========= ============ ======== ========== =========
Share Own Share
Share premium Merger shares Translation option Retained Total
capital account reserve reserve reserve reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
======================== ========= ======== ======== ========= ============ ======== ========== =========
Opening equity
as at 1 February
2016 522 4,814 295 (1,199) 1,064 1,708 6,650 13,854
Profit for the
year - - - - - - 2,847 2,847
Exchange differences
on translation
of foreign operations - - - - 346 - - 346
======================== ========= ======== ======== ========= ============ ======== ========== =========
Total comprehensive
income for the
year - - - - 346 - 2,847 3,193
Share option movement
for the year - - - - - 369 - 369
Issue of shares - (59) 59 60 - (60) - -
Deferred tax on
share-based payment
transactions - - - - - - (66) (66)
Share options exercised
during the year - - - 467 - - (286) 181
Remeasurements
of post-employment
benefit obligations - - - - - - (23) (23)
------------------------ --------- -------- -------- --------- ------------ -------- ---------- ---------
Dividends paid
(note 4) - - - - - - (2,574) (2,574)
======================== ========= ======== ======== ========= ============ ======== ========== =========
Closing equity
as at 31 January
2017 522 4,755 354 (672) 1,410 2,017 6,548 14,934
======================== ========= ======== ======== ========= ============ ======== ========== =========
Consolidated statement of financial position
as at 31 January 2017
31 31
January January
2017 2016
Note GBP'000 GBP'000
================================= ===== ======== ========
Assets
Non-current assets
Goodwill 3,787 3,346
Other intangible assets 4,956 5,038
Property, plant and equipment 1,086 1,281
Deferred tax assets 533 143
======================================== ======== ========
10,362 9,808
======================================= ======== ========
Current assets
Trade and other receivables 25,405 23,708
Current tax assets 506 438
======== ========
Restricted bank balances 1,965 2,840
Other cash and cash equivalents 17,830 16,951
======== ========
Total cash and cash equivalents 19,795 19,791
Derivative financial instruments - 36
======================================== ======== ========
45,706 43,973
======================================= ======== ========
Total assets 56,068 53,781
======================================== ======== ========
Current liabilities
Trade and other payables (4,359) (3,911)
Current tax liabilities (1,071) (133)
Other liabilities (4,463) (5,633)
Borrowings (514) (514)
Deferred income (27,350) (25,807)
Provisions - (421)
Derivative financial instruments (9) -
======================================== ======== ========
(37,766) (36,419)
======================================= ======== ========
Net current assets 7,940 7,554
======================================== ======== ========
Long term liabilities
Borrowings (2,443) (2,957)
Deferred consideration (200) -
Deferred tax liability (725) (551)
Total long term liabilities (3,368) (3,508)
======================================== ======== ========
Total liabilities (41,134) (39,927)
======================================== ======== ========
Net assets 14,934 13,854
======================================== ======== ========
Equity
Share capital 522 522
Share premium account 4,755 4,814
Merger reserve 354 295
Own shares reserve (672) (1,199)
Translation reserve 1,410 1,064
Share option reserve 2,017 1,708
Retained earnings 6,548 6,650
======================================== ======== ========
Total equity 14,934 13,854
======================================== ======== ========
Consolidated statement of cash flows
for the year ended 31 January 2017
Year
ended
Year ended 31
31 January January
2017 2016
Note GBP'000 GBP'000
================================================== ==== =========== ========
Net cash inflow from operating
activities 6 1,874 5,785
================================================== ==== =========== ========
Investing activities
Continuing operations
* Interest received 39 10
* Purchases of property, plant and equipment (96) (118)
* Purchases of intangible assets (173) (153)
* Acquisition of subsidiaries 9 (362) (5,902)
Net cash used in by investing
activities (592) (6,183)
================================================== ==== =========== ========
Financing activities
Continuing operations
* Dividends paid (2,574) (2,331)
* Proceeds on exercise of share options 181 68
* New bank loans raised - 3,600
* Repayments of borrowings (514) (129)
================================================== ==== =========== ========
Net cash (used in)/generated
by financing activities (2,907) 1,208
================================================== ==== =========== ========
Net (decrease)/increase in cash
and cash equivalents (1,625) 830
Opening cash and cash equivalents 19,791 18,794
Effect of changes in foreign
exchange rates 1,629 167
================================================== ==== =========== ========
Closing cash and cash equivalents 19,795 19,791
================================================== ==== =========== ========
JetCard cash
The closing cash and cash equivalents balance can be further
analysed into 'JetCard cash' (being restricted and unrestricted
cash received by the Group in respect of its JetCard product) and
'non-JetCard cash' as follows:
2017 2016
GBP'000 GBP'000
===================================== ======== ========
JetCard cash restricted in its use 1,965 2,840
JetCard cash unrestricted in its use 13,901 13,936
===================================== ======== ========
Total JetCard cash 15,866 16,776
Non-JetCard cash 3,929 3,015
===================================== ======== ========
Cash and cash equivalents 19,795 19,791
===================================== ======== ========
1 GENERAL INFORMATION, BASIS OF PREPARATION AND ACCOUNTING
POLICIES
General information
The Company is a limited liability company incorporated and
domiciled in England and Wales under registration number 00980675.
The address of its registered office is 2 City Place, Beehive Ring
Road, Gatwick, West Sussex RH6 0PA. The Company is listed on the
London Stock Exchange.
This consolidated financial information was approved for issue
on 26 April 2017.
This consolidated financial information does not constitute
statutory accounts within the meaning of Section 434 of the
Companies Act 2006. Statutory accounts for the year ended 31
January 2017 were approved by the board of directors on 26 April
2017, but have not yet been delivered to the Registrar of
Companies. The auditor's reports on the financial statements for
the years ended 31 January 2017 and 31 January 2016 were
unqualified and did not contain a statement under Section 498 of
the Companies Act 2006. The financial statements for the period
ended 31 January 2016 have been delivered to the Registrar of
Companies.
Basis of preparation
The financial statements have been prepared in accordance with
International Financial Reporting Standards ("IFRS") as adopted for
use in the European Union in accordance with EU law (IAS regulation
EC1606/2002) and those parts of the Companies Act 2006 applicable
to companies reporting under IFRS. While the financial information
included in this preliminary announcement has been prepared in
accordance with the recognition and measurement criteria of IFRS,
this announcement does not itself contain sufficient information to
comply with IFRS. The Company expects to publish full financial
statements that comply with IFRS in May 2017.
Going concern
The Directors are, based on current financial projections
satisfied that the Group has sufficient resources to continue in
operation for the foreseeable future, that is a period of at least
12 months from the date of this report. Accordingly, they continue
to adopt the going concern basis in preparing the Interim
report.
Key accounting estimates and judgments
The preparation of financial statements requires management to
make judgments, estimates and assumptions that affect the
application of policies and reported amounts of assets and
liabilities, income and expenses. These estimates and associated
assumptions are based on historical experience and various other
factors believed to be reasonable under the circumstances. Actual
results could differ from these estimates. These underlying
assumptions are reviewed on an on-going basis. Revisions to
accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period; or in
the period of the revision and future periods if these are also
affected.
2 SEGMENTAL ANALYSIS
The services provided by the Group consist of chartering
different types of aircraft and related aviation services.
The group has four operating segments: Commercial Jet Broking,
Private Jet Broking, Freight Broking and Consulting and Training.
Cabot Aviation Services results are aggregated in to Commercial Jet
Broking. Overheads with the exception of Corporate costs are
allocated to the Group's operating segments in relation to
operating activities.
Sales transactions between operating segments are carried out on
an arm's length basis. All results, assets and liabilities reviewed
by the Board (which is the chief operating decision maker) are
prepared on a basis consistent with those that are reported in the
financial statements.
The Board does not review revenue, assets and liabilities at
segmental level, therefore these items are not disclosed.
The segmental information, as provided to the Board on a monthly
basis, is as follows:
Commercial Private Consulting
Year ended 31 January 2017 Jet Jet Freight and Corporate
Broking Broking Broking Training costs Total
Continuing operations GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
============================== ========== ======== ======== ========== ========= =========
Segmental gross profit 14,704 10,236 1,113 5,654 - 31,707
============================== ========== ======== ======== ========== ========= =========
Depreciation and amortisation (249) (162) - (62) - (473)
============================== ========== ======== ======== ========== ========= =========
Underlying operating profit 3,848 2,491 233 527 (1,985) 5,114
Other items (see note 3) (182) - - (399) (128) (709)
============================== ========== ======== ======== ========== ========= =========
Segment result 3,666 2,491 233 128 (2,113) 4,405
============================== ========== ======== ======== ========== ========= =========
Finance income 39
Finance expense (96)
============================== ========== ======== ======== ========== ========= =========
Profit before tax 4,348
Tax (1,501)
============================== ========== ======== ======== ========== ========= =========
Profit for the year 2,847
------------------------------ ---------- -------- -------- ---------- --------- ---------
Commercial Private Consulting
Year ended 31 January 2016 Jet Jet Freight and Corporate
Broking Broking Broking Training costs Total
Continuing operations GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
============================== ========== ======== ======== ========== ========= =========
Segmental gross profit 14,005 9,361 1,857 2,046 - 27,269
============================== ========== ======== ======== ========== ========= =========
Depreciation and amortisation (339) (186) - (6) - (531)
============================== ========== ======== ======== ========== ========= =========
Impairment losses (361) - - (29) - (390)
============================== ========== ======== ======== ========== ========= =========
Underlying operating profit 2,952 2,387 767 (99) (1,621) 4,386
Other items (see note 3) (436) (261) (44) (437) - (1,178)
============================== ========== ======== ======== ========== ========= =========
Segment result 2,516 2,126 723 (536) (1,621) 3,208
============================== ========== ======== ======== ========== ========= =========
Finance income 10
Finance expense (81)
============================== ========== ======== ======== ========== ========= =========
Profit before tax 3,137
Tax (1,230)
============================== ========== ======== ======== ========== ========= =========
Profit after tax 1,907
Discontinued operations 387
============================== ========== ======== ======== ========== ========= =========
Profit for the year 2,294
============================== ========== ======== ======== ========== ========= =========
The company is domiciled in the UK but due to the nature of the
Group's operations, a significant amount of gross profit is derived
from overseas countries. The Group reviews gross profit based upon
location of the assets used to generate that gross profit. Apart
from the UK, no single country is deemed to have material
non-current asset levels other than goodwill in relation to the
French operation of GBP965,000 (2016: GBP848,000).
The Board also reviews information on a geographical basis based
on parts of the world which are considered to be key to operational
activities. As a result the following additional information is
provided showing a geographical split of the UK, Europe, the USA
and the Rest of the World:
United Rest
United States of the
Kingdom Europe of America World Total
Continuing operations GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
============================== ======== ========= =========== ======== =========
Year ended 31 January 2017
Gross profit 18,812 8,930 3,771 194 31,707
Non-current assets (excluding
deferred tax assets) 8,696 1,090 39 4 9,829
============================== ======== ========= =========== ======== =========
Year ended 31 January 2016
Gross profit 16,486 7,353 3,187 243 27,269
Non-current assets (excluding
deferred tax assets) 8,616 995 48 6 9,665
============================== ======== ========= =========== ======== =========
Europe can be further analysed as:
France Germany Italy Other Total
Continuing operations GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
=========================== ======== ======== ======== ======== ========
Year ended 31 January 2017
Gross profit 3,047 2,547 1,854 1,482 8,930
=========================== ======== ======== ======== ======== ========
Year ended 31 January 2016
Gross profit 2,730 2,306 1,491 826 7,353
=========================== ======== ======== ======== ======== ========
3 OTHER ITEMS
2017 2016
Continuing operations GBP'000 GBP'000
Restructuring costs (183) (419)
Amortisation of purchased intangibles (304) (242)
Acquisition costs (128) (419)
Non-cash acquisition related costs (94) (98)
(709) (1,178)
Tax effect of other items 153 81
====================================== ======== ========
Other items after taxation (556) (1,097)
====================================== ======== ========
Restructuring costs relate to changes to the management
structure following the acquisitions made during the prior
year.
4 DIVIDS
2017 2016
GBP'000 GBP'000
========================================== ======== ========
Amounts recognised as distributions to
owners of the parent company
Final dividend for the year ended 31
January 2016 of 16.9 pence per share
(Final dividend the year ended 31 January
2015 of 15.4 pence) 1,741 1,578
Interim dividend for the year ended 31
January 2017 of 8.03 pence per share
(Interim dividend for the year ended
31 January 2016 of 7.33 pence) 833 753
2,574 2,331
========================================== ======== ========
All dividends above were prior to the Company's shareholders
approving a 5 to 1 split of the Company's shares, which reduced the
nominal value of the ordinary shares to 1 pence each. The share
split became effective on 31 January 2017.
The Directors propose a final dividend for the year ended 31
January 2017 of 3.6 pence per share, subject to shareholder
approval at the Annual General Meeting to be held on 28 June
2017.
The Air Partner Employee Benefit Trust, which held 341,820
ordinary shares of 1p each at 31 January 2017 (2016: 159,236
ordinary shares of 5p each) representing 0.65% (2016: 1.6%) of the
Company's issued share capital is not entitled to receive
dividends. A further 413,640 ordinary shares of 1p each (2016:
100,910 ordinary shares of 5p each) shares are held by the Trust in
a nominee capacity for two (2016: two) beneficiaries of the
Trust.
5 EARNINGS PER SHARE
The calculation of the basic and diluted earnings per share is
based on the following data:
2017 2016
Continuing and discontinued operations GBP'000 GBP'000
========================================= ======== ========
Earnings for the calculation of basic
and diluted earnings per share
Profit attributable to owners of the
parent company 2,847 2,294
Adjustment to exclude other items 556 1,097
========================================= ======== ========
Underlying profit attributable to owners
of the parent company 3,403 3,391
========================================= ======== ========
Number of shares Number Number
======================================= ========== ==========
Weighted average number of ordinary
shares for the calculation of basic
earnings per share 52,361,659 50,606,225
Effect of dilutive potential ordinary
shares: share options 1,133,083 275,720
======================================= ========== ==========
Weighted average number of ordinary
shares for the calculation of diluted
earnings per share 53,494,742 50,881,945
======================================= ========== ==========
2017 2016
From continuing operations GBP'000 GBP'000
========================================= ======== ========
Earnings
Profit attributable to owners of the
parent company 2,847 2,294
Adjustment to exclude profit for the
year from discontinued operations - (387)
Adjustment to exclude other items 556 1,097
========================================= ======== ========
Underlying earnings for the calculation
of basic and diluted earnings per share 3,403 3,004
========================================= ======== ========
2017 2016
From discontinued operations GBP'000 GBP'000
============================================= ======== ========
Earnings
Earnings for the calculation of discontinued
basic and diluted earnings per share - 387
============================================= ======== ========
On 25 January 2017, the Company's shareholders approved a 5 to 1
split of the Company's shares, which reduced the nominal value of
the ordinary shares to 1 pence each. The share split became
effective on 31 January 2017. As a result the prior year number of
shares and EPS calculations have been restated to show comparable
numbers.
The denominators used are the same as those above for both basic
and diluted earnings per share from continuing and discontinued
operations.
The calculation of underlying earnings per share (before other
items) is included as the directors believe it provides a better
understanding of the underlying performance of the Group. Other
items are disclosed in note 3.
6 NET CASH INFLOW FROM OPERATING ACTIVITIES
2017 2016
GBP'000 GBP'000
========================================== ======== ========
Profit for the year
Continuing operations 2,847 1,933
Discontinued operations - 387
========================================== ======== ========
2,847 2,320
Adjustments for:
Finance income (39) (10)
Finance expense 96 81
Income tax expense 1,501 1,328
Depreciation and amortisation 780 745
Fair value losses/(gains) on derivative
financial instruments 45 (186)
Share option cost for period 369 223
Decrease in provisions (421) (91)
Foreign exchange differences (938) (140)
========================================== ======== ========
Operating cash flows before movements
in working capital 4,240 4,270
Increase in receivables (481) (1,377)
(Decrease)/increase in payables (867) 3,901
========================================== ======== ========
Cash generated from operations 3,009 6,794
Income taxes paid (922) (928)
Interest paid (96) (81)
========================================== ======== ========
Net cash inflow from operating activities 1,874 5,785
========================================== ======== ========
7 TAXATION
Discontinued
Continuing operations operations Total
======================= ================== ==================
2017 2016 2017 2016 2017 2016
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
========================= =========== ========== ======== ======== ======== ========
Current tax:
UK corporation tax 528 561 - 98 528 659
Foreign tax 822 488 - - 822 488
Current tax adjustments
in respect of prior
years (UK) 376 12 - - 376 12
Current tax adjustments
in respect of prior
years (Overseas) 66 333 - - 66 333
1,792 1,394 - 98 1,792 1,492
Deferred tax (291) (164) - - (291) (164)
========================= =========== ========== ======== ======== ======== ========
Total tax 1,501 1,230 - 98 1,501 1,328
========================= =========== ========== ======== ======== ======== ========
Of which:
Tax on underlying profit 1,654 1,311 - 98 1,654 1,409
Tax on other items (see
note 3) (153) (81) - - (153) (81)
========================= =========== ========== ======== ======== ======== ========
1,501 1,230 - 98 1,501 1,328
========================= =========== ========== ======== ======== ======== ========
Corporation tax in the UK was calculated at 20% (2016: 20.16%)
of the estimated assessable profit for the period. Taxation for
other jurisdictions was calculated at the rates prevailing in the
respective jurisdictions.
The charge for the period can be reconciled to the profit per
the consolidated income statement as follows:
2017 2016
GBP'000 GBP'000
=============================================== ======== ========
Profit from continuing operations before
tax 4,348 3,163
Profit from discontinued operations before
tax - 485
=============================================== ======== ========
Accounting profit before tax 4,348 3,648
=============================================== ======== ========
Tax at the UK corporation tax rate of
20% (2016: 20.16%) 870 735
Effect of change to UK corporation tax
rate (2016: 21% from 1 February 2015
to 31 March 2015) (41) (61)
Tax effect of items that are not recognised
in determining taxable profit 64 205
Tax effect of different tax rates of
subsidiaries operating in other jurisdictions 212 139
Current tax adjustments in respect of
prior years 442 303
Deferred tax not recognised 22 7
=============================================== ======== ========
Options deductions (68) -
=============================================== ======== ========
Total tax charge 1,501 1,328
=============================================== ======== ========
The UK corporation tax rate decreased from 21% to 20% from 1
April 2016. The impact on the tax charge is shown above.
Further reductions to the UK corporation tax rate have been
announced. A reduction to 19% effective from 1 April 2017 and to
17% on 1 April 2020 was substantively enacted on 16 October 2016
and the deferred tax balance has been adjusted to reflect this
change.
8 CONTINGENT LIABILITIES
The Group had issued the following guarantees at the year
end.
2017 2016
Description Currency GBP'000 GBP'000
====================== =========== ======== ========
Dubai employee rights Sterling - 17
====================== =========== ======== ========
In addition, the Company's bankers hold a free and floating
charge over the Company's assets. There is also contingent
consideration of up to GBP600,000 payable to the vendors of Baines
Simmons Limited depending on the performance to 31 January
2018.
9 ACQUISITIONS
On 12 December 2016, Air Partner plc acquired 100% of the issued
share capital of Clockwork Research Limited, obtaining control of
the company on that date. Clockwork Research Limited is a leading
fatigue risk management consultant. The acquisition of Clockwork
Research Limited adds significant specialist consulting expertise
and knowledge to the group.
The provisional amounts recognised in respect of the
identifiable assets acquired and liabilities assumed are set out in
the table below.
Clockwork
Research
Limited
GBP'000
=========================================== =========
Fair values of assets acquired
Financial assets 325
Property, plant and equipment 35
Intangible assets - customer relationships 174
Deferred tax on intangible assets (35)
Financial liabilities (163)
Goodwill 333
Total consideration 669
=========================================== =========
Satisfied by
Cash 469
Deferred consideration 200
=========================================== =========
Total consideration transferred 669
=========================================== =========
Net cash outflow arising on acquisition
Cash consideration 469
Less cash and cash equivalents acquired (107)
Net cash outflow 362
======================================== =====
Deferred consideration of up to GBP200,000 is payable depending
on earnings performance in the 12 month periods ending 31 March
2017 and 31 March 2018. The directors consider it likely that the
performance conditions will be met and have therefore recognised
the maximum amounts payable.
No goodwill is deductible for tax purposes.
The goodwill of GBP333,000 arising from the acquisition is
attributable to the value of the assembled workforce and the
ability of the senior staff to generate future business.
Acquisition related costs (included in Other items) amounted to
GBP55,000.
Clockwork Research Limited contributed revenue of GBP70,000 and
losses after tax of GBP3,000 being the results for the period
between the date of acquisition and 31 January 2017.
10 PRIOR YEAR ACQUISITIONS
On 18 August 2015, Air Partner plc acquired 100% of the issued
share capital of Baines Simmons Limited, obtaining control of the
company on that date. Baines Simmons Limited is a leading aviation
safety consultant. Baines Simmons Limited will enable Air Partner
to extend the Group's service and product capabilities with
offerings complementary to its existing broking business.
Contingent consideration of up to GBP600,000 is payable to the
vendors of Baines Simmons Limited depending on the performance to
31 January 2018. As the directors do not consider it likely that
the minimum performance threshold will be met, no amounts have been
recognised in respect of this.
At 31 January 2016 the purchase price allocation was
provisional, the accounting in respect of the acquisition of Baines
Simmons Limited has since been finalised. This resulted in
adjustment to the value of intangibles recognised on acquisition,
an increase in customer relationships of GBP1.6m, and decreases in
the value of the brand of GBP0.04m and training materials of
GBP0.2m.
The amounts recognised in respect of the identifiable assets
acquired and liabilities assumed on the acquisition of Baines
Simmons are set out in the table below.
Baines
Simmons
Limited
GBP'000
=========================================== ========
Fair values of assets acquired
Financial assets 1,490
Property, plant and equipment 191
Intangible assets - brands 158
Intangible assets - customer relationships 3,448
Intangible assets - training materials 415
Deferred tax on intangible assets (780)
Financial liabilities (983)
3,939
Goodwill 1,711
Total Consideration 5,650
=========================================== ========
Satisfied by
Cash 5,650
------------------------------------------- --------
Net cash outflow arising on acquisition
Cash consideration 5,650
Less cash and cash equivalents
acquired (350)
Net cash outflow 5,300
======================================== =====
This information is provided by RNS
The company news service from the London Stock Exchange
END
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