Trading Statement

RNS Number : 0007E

Gama Aviation PLC

13 July 2016

 

July 13 2016

Gama Aviation Plc (AIM: GMAA)

("Gama" or the "Company")

Trading Update

Gama Aviation Plc, one of the world's largest business aviation service providers, is pleased to announce that consolidated revenues, reported on a constant currency basis¹, for the half year ended 30 June 2016 will be no less than $205m (2015: $191m) and adjusted EBITDA² will be no less than $7.5m (2015: $8.2m).

Current Trading

These revenues have been achieved despite the continuation of the challenging trading environment in Europe, as previously highlighted at the time of the final full year results to 31 December 2015, announced on 21 April 2016. The Board does not believe that this is likely to change in the short term. It is however pleasing to report that the initiatives launched earlier in the year to optimise and right size the European business and its cost base in this challenging market are beginning to generate some improvement in the underlying financial performance in the region.

Trading in our US business remains strong and we continue to enjoy solid organic revenue and margin growth. The US Air business has added another 9 planes to the fleet under management. The US Ground business has continued to expand its line maintenance facilities and has added another base in Bedford, Massachusetts. Gama's US Ground operation now has nine bases in total providing full East to West and North to South coverage across the USA.

Both of our Middle East and Asia operations continue to make steady progress. Preparation for the start of our Sharjah hangar development is well underway and we expect to break ground before year end. In Hong Kong we now have the capability to provide line maintenance support for our managed fleet and we expect to be able to roll this out to third parties in the near future. Both regions have a healthy pipeline of aircraft management opportunities.

Growth Strategy

The Board continues to implement its growth strategy which is focused on both organic and acquisitive growth.

With regard to organic growth, the benefits of scale, the breadth and depth of Gama's geographical offering means that the Board is able to divert resources to wherever the best organic growth opportunities lie. Presently these primarily lie outside of Europe and the Board is therefore focusing more on those opportunities whilst continuing to optimise business performance within Europe.

With regard to acquisitive growth, the Board has a very strong pipeline of both small acquisition targets as well as some larger and more material transformational targets and continues to actively pursue both against the objective of only executing on those that deliver a good strategic fit, are accretive and are earnings enhancing.

Since the beginning of the financial year, the Company has completed the bolt-on acquisitions of Aviation Beauport Ltd in February 2016 and of FlyerTech Ltd and Aerstream Ltd in July 2016 both of which were organically funded. The Board will continue to pursue these types of small but strategically important targets and will continue to fund any such acquisitions through a combination of cash generated from ordinary business operations and debt.

The larger and more transformational opportunities and targets, of which the Board has a strong pipeline, are more likely to be funded largely through the issue of equity so as to contain debt at sensible levels. However, at the Company's current share price the Board believes the issue of further equity to be too dilutive and is therefore unlikely to pursue such material and transformational opportunities until the share price recovers to a level where such transactions can be more accretive.

Gama will release its interim results for the six months to 30 June 2016 in September.

1 - The results above are for continuing operations and calculated at a constant foreign exchange rate of $1.5 to £1.

2- Adjusted EBITDA is arrived at by taking operating profit before depreciation, amortisation and exceptional items

End

Gama Aviation Plc

Marwan Khalek, Chief Executive                    [phone]

Citigate Dewe Rogerson                             [phone]

Chris Jarvis, Associate Director

Phil Anderson, Executive Director

Jefferies International                                 [phone]

(Nominated Advisor & Broker)

Simon Hardy

Harry Nicholas

 

END

 

 

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