Interim Results

RNS Number : 6289A

Gama Aviation PLC

30 September 2015

 

30 September 2015

Gama Aviation plc (AIM: GMAA)

("Gama Aviation", "the Company" or "the Group")

Interim results for the six months to 30 June 2015

Gama Aviation, one of the world's largest business aviation service providers, is pleased to announce its first interim results for the six months to 30 June 2015, following the completion of the reverse takeover of Hangar8 plc on 5 January 2015.

In order to aid understanding of the underlying growth of the business, the financial highlights below show the results of the Group against both Gama's actual comparatives for the six month period to 30 June 2014 together with an unaudited pro-forma comparative, calculated as if Gama's reverse takeover of Hangar 8 had been in place throughout the six month period to 30 June 2014.

Financial highlights:

	June 2015	June 2014 (Pro-forma)1	Change	June 2014 (Gama only)	Change
Revenue2	$191m	$157m	22%	$130m	47%
Gross Profit2	$30.3m	$24.3m	24%	$15.1m	100%
Gross profit Margin	15.9%	15.6%	0.3%	11.7%	4.2%
Underlying EBITDA3	$8.2m	$4.7m	74%	$2.2m	269%
Underlying PBT4	$4.9m	$2.9m	69%	$0.8m	513%
Underlying EPS5	$12.5c	$5.8c	115%	$2.5c	400%

1 - Calculated using the Hangar 8 figures for the six months ended 30 June 2014 and the Gama figures for the six months ended 30 June 2014, as set out in the Admission document dated 8 December 2014.

2 - Including the results of Gama Aviation's Associate in the US and Joint Venture in Hong Kong.

3 - Underlying EBITDA is arrived at by taking operating profit before depreciation, amortisation, and exceptional items as disclosed in the Statement of Comprehensive Income.

4 - Underlying profit before tax is arrived at before exceptional items.

5 - Earnings used in the underlying EPS calculation are the profit attributable to ordinary shareholders adjusted for exceptional items and amortisation.

Operational highlights:

·        Integration completed on schedule

·        Synergies flowing through into second half of 2015 in line with management expectations

·        Executed on Asia joint venture and growth in line with management expectations

·        Strong organic revenue and margin growth in the US, particularly in ground operations

·        Strong, scalable, client experience centric and safety first operational delivery platform in place

·        Focus on continued growth complemented by strategic acquisition opportunities

Marwan Khalek, Chief Executive Officer commented:

"I am delighted with the performance of the business during the six month period to 30 June 2015, a period in which we have achieved and in some cases exceeded, the targets we set at the time of the reverse takeover of Hangar8 plc.

The Group's ability to deliver a strong first half performance, whilst also executing the required integration and re-organisation of the business following the merger, highlights the capabilities of the senior management team.

During the six month period we have acquired and completed the integration of Hangar 8, with anticipated synergies flowing through into the second half of the financial year as planned; increased the scale of our business delivering strong organic growth in line with our expectations; increased the breadth of our business with a new strategic joint venture in Asia with Hutchinson Whampoa; developed plans to further increase the depth and scale of our business through further acquisitions whilst at the same time the core business lines across our global business have delivered the strong growth in profitability that we targeted ourselves to achieve.

With the integration now successfully concluded, the management is now fully focussed on our strategy of organic growth and strategic acquisitions.  We continue to trade with a high percentage of contracted revenue and our outlook remains very positive. As we expand the geographical breadth, depth and scale of our business, we will stay true to our vision of maintaining a sustainable business for our shareholders."  

Sir Ralph Robins, Chairman, commented:

"We are very pleased that the first half results have been delivered in line with management's expectations and having handled the challenges that integrations often present, we now enter the second half of the year with full confidence in our ability to grow the business both organically and acquisitively. 

We continue to look at the quality of our service offering whilst maintaining a strong safety culture within the business to ensure that our reputation and ability to leverage off our established expertise continue to deliver the financial results into the future." 

For further information please visit www.gamaaviation.com or contact:

Gama Aviation plc                                                           [phone]

Marwan Khalek, Chief Executive Officer

Kevin Godley, Finance Director

Citigate Dewe Rogerson                                               [phone]

Phil Anderson, Director                                                [phone]

Chris Jarvis, Associate Director                                  [phone]

Cantor Fitzgerald Europe                                             [phone]

Marc Milmo (Corporate Finance)

Catherine Leftley (Corporate Finance)

David Banks (Corporate Broking)

Business Review

Completed Integration Update

The integration of Gama Aviation and Hangar 8 was completed as anticipated by 30 June 2015. During the period under review, the management team has worked on successfully concluding the integration of the two operations. This has resulted in one-off restructuring costs of approximately $2 million with the benefit of the synergies from the integration starting to be realised in the second half of this financial year. Management remains confident that these will be achieved in line with expectations. The Board is particularly pleased that management and staff at all levels fully embraced the integration process and adopted best practice from the original pre-merged groups to the benefit of our customer service offering going forwards. Crucially, the business retained the key management personnel within each of the two combined businesses to ensure a seamless transition for the customers. 

Regional Review

US

The US has experienced significant organic growth in the first six months of the year underpinned by long term quality contracts within the Air and Ground operations and aided by a strong US economy. The US Air division has managed to grow at an exceptional rate whilst at the same time maintaining the service delivery the US customers have come to expect from the brand.

The Ground business and its line maintenance offering continues to grow with Texas and Dallas now fully operational and Chicago due to open soon. The US ground maintenance now provides East to West and North to South coverage, with almost thirty mobile maintenance vehicles. The mobile capability has proved particularly popular at recent major sporting events.  

Europe

The EU Ground division has also experienced a strong first half year recording healthy EBITDA growth. The ability to enhance our service offering as a result of the reverse takeover through utilising the Oxford maintenance base owned by Hangar 8 to attract larger third party aircraft to the Gama Aviation service offering, has been particularly successful.

The EU Air division has, however, experienced a more challenging six months. The EU charter market remains flat and two important former contracts in this region have not been as lucrative as they have been historically. Whilst not delivering to their full potential under their current construct, management is in the process of renegotiating and transitioning these contracts to a more solid commercial footing going forward.

Notwithstanding the difficulties within EU Air, the EU division as a whole nevertheless reported a solid set of results and with the integration now complete and the renegotiating and transitioning of the underperforming contracts underway, the EU Air division's future outlook remains positive.

Asia

The Air division within the Asia region has only been trading for two of the six months of the half year but with three aircraft already under management and a promising pipeline, this region is well placed to scale and deliver the anticipated organic growth and platform for expansion into the wider Asia region in conjunction with our JV partners Hutchison Whampoa (China) Limited.  

Middle East

The MENA Air division has recently gained a seventh aircraft and now has sufficient scale for the region to break even and progress onto delivering a positive EBITDA in future periods. Part of the long term growth for the group has been about identifying markets with a demand profile that make it attractive to Gama Aviation to enter and the MENA region fits that strategy. MENA Air is now progressing from its scaling phase towards maturity. There is still work to be done but management expects this division to be positively contributing shortly.  

The MENA Ground business is still in its start-up phase but with a recently upgraded FBO facility in Sharjah (UAE) and funding agreed for hangar development to support a more concerted maintenance presence, this division is expected to deliver positive organic growth into 2016 and onwards. Local management has been successful in renegotiating some local contracts and as a result the division is expected to be generating a positive EBITDA by the final quarter of 2015.

The Fleet

The aircraft fleet, which stood at 139 as at 30 June 2015, comprises aircraft types from all the major manufacturers with a bias toward larger, more capable aircraft.  The scale of the global fleet size has a positive influence on contract value and ancillary service volumes such as fuel, training and insurance; allowing for increased leverage during negotiations with suppliers. Management is seeing our ability to reduce the cost base of our current and potential customers as a key differentiator when it comes to management aircraft tenders particularly as fuel and insurance represents a significant portion of owners' annual running costs. 

We continue to review the managed aircraft contracts across the globe for contract quality within the group exiting those contracts that no longer represent the appropriate level of commercial value, replacing them with customers where we can deliver the margin as a result of enhanced service offerings.  As a result the number of aircraft within the group has not grown significantly within the first six months of the year but we have been able to extract a higher level of Gross Profit from that customer base.

Financial Review

Total consolidated revenue for the period was $191m (2014: $130m) an increase of 47% and an increase of 22% on a pro-forma basis, yielding a gross profit of $30.3m (2014: $15.1m), an increase of 100% and an increase of 24% (2014: $24.3m) on a pro-forma basis. Underlying EBITDA generated was up 269% to $8.2m (2014: $2.2m) and up 74% (2014: $4.7m) on a pro-forma basis.

The revenue and gross profit figures set out above include those revenues and gross profits within the business that are, in accordance with accounting convention, removed for statutory purposes as they relate to an associate and a joint venture. We have chosen to set out the full, consolidated revenues and gross profits of the Group as the board believes that this sets out the true performance of the global Gama Aviation business. The majority of the revenues and gross profits generated in our US Air division are in respect of an associate and all the revenues and gross profits generated within our Hong Kong Air division are in respect of a joint venture. As a result, following recognised IFRS accounting practice, the statutory income statement of these divisions are netted into one line in the Company's consolidated income statement: share of the results of associates.

The underlying EBITDA is the same on a consolidated or statutory basis. For a breakdown of the performance by segment on both a consolidated and statutory basis please refer to note 5, segmental analysis.

The statutory primary financial statements shows revenues up 29% to $115m (2014: $89m) and level (2014 $116m) on a pro-forma basis. These revenues yield a gross profit up 79% to $25.5m (2014: $14.3) and up 9% (2014: $23.5m) on a pro-forma basis with the gross margin up 6% to 22% (2014: 16%) and up 2% (2014: 20%) on a pro-forma basis.

Underlying EBITDA is stated before exceptional costs of $5.5m, details of which are included in note 3, discontinued operations of $0.5m, which are the operating losses incurred on the group's owned aircraft that are deployed on ad-hoc charter only and also before depreciation and amortisation of approximately $1.99m (2014: $701k on a pro forma basis).

Overhead costs of $24.8m (2014: $19.6m on a pro-forma basis) have increased by $5.2m primarily as a result of the exceptional costs incurred in the six months of $5.5m. Please see note 3 for an explanation of exceptional items.

As part of the integration process, management has performed a further review of the recoverability of certain debts at 31 December 2014 and, based on a review of the payment history of certain contracts it has been determined appropriate to increase the provision for doubtful debts by a further $2.3m.

Cash increased to $12m, up $6.3m (2014: $5.7m) and down $2.2m (2014: $14.2m) on a pro forma basis.

Adjusted EPS is up 400% to $12.5c (2014: $2.5c).

Board Director

With the integration of Hangar 8 now complete and with the enlarged group on solid foundations, Dustin Dryden, the former Chief Executive of Hangar 8 has expressed his desire to the Board to resign his position to pursue his own personal non-competing business interests. Mr. Dryden is therefore leaving the board of the Company with immediate effect and the Board would like to thank Dustin for his significant contribution both in developing Hangar 8 and assisting with its integration into Gama.

Related Party transactions

The Company has entered into certain arm's length commercial contracts with customers who have other potential business interests with a separate non-competing business interest of Dustin Dryden. The performance of these contracts has been well below the Board's expectation and accordingly, as part of its review of the operations of the Group during the integration process, the Board has been considering whether to withdraw from these contracts whilst they are renegotiated.  Following conversations with Dustin Dryden, who has a detailed understanding of the underlying customers in question, the Board has taken the decision to try and renegotiate the arrangements with the existing contracts still in place during these negotiations. In order to preserve the integrity of the Company's actions, Dustin Dryden has entered into an agreement with the Company pursuant to which he has agreed to underwrite their performance and any outstanding debts that may arise from these customers whilst the Company transitions them into a more commercially viable basis. Pursuant to this agreement, Dustin Dryden will underwrite up to $2m of potential performance and debt associated with these contracts should the quantum's due from these contracts not be paid by 30 November 2015. As part of the agreements, Dustin Dryden has agreed to provide security to the Company against his beneficial interest of 2,159,886 ordinary shares in the Company.

This agreement between the Company and Dustin Dryden is considered to be a related party transaction for the purposes of AIM Rule 13, and accordingly the Board having consulted with Cantor Fitzgerald Europe, the Company's nominated adviser, considers the terms of the transaction to be fair and reasonable insofar as the Company's shareholders are concerned.

In addition, pursuant to the terms of the agreement entered into in the first quarter of 2012 relating to the acquisition of Ronaldson Airmotive Limited by a group company of Gama Aviation, the minority shareholders who currently own 6% of Gama Aviation (Engineering) Limited, have exercised their put option for that group company to purchase their remaining shareholding on the third anniversary of the acquisition. Such exercise of the put option triggered an independent valuation of the Gama Aviation (Engineering) Limited business.

That independent valuation attributed a value of £742,500 for the 6% minority shareholding on the business and therefore Gama Aviation will pay the selling shareholders £742,500 in cash to the minority shareholders. As a result, the relevant group company of Gama Aviation will own 100% of the shares in Gama Aviation (Engineering) Limited, which sits within the EU ground division.

One of the minority shareholders selling their interests remains a director of Ronaldson Airmotive Limited, a subsidiary of the Company and is therefore considered a related party pursuant to the AIM Rules. Therefore the acquisition of the outstanding shares in Gama Aviation (Engineering) Limited is considered to be a related party transaction for the purposes of AIM Rule 13, and accordingly the Board having consulted with Cantor Fitzgerald Europe, the Company's nominated adviser, considers the terms of this transaction to be fair and reasonable insofar as the Company's shareholders are concerned.

Dividend Policy

The group retains its desire to maintain a progressive dividend policy and is currently in discussions with its advisers with a view to a possible capital reduction exercise so as to enable the Group to be in a position to consider paying a dividend at the end of this current financial year.

Outlook - building on a strong platform

The Group enters the second half of 2015 in a strong position and the Board remains confident about the outcome for the full financial year.

The business is experiencing strong growth in many of its global divisions underpinned by its high quality revenue streams. Trading in the US region has continued its positive momentum since the period end and the Board is pleased with the trends being seen in the Group as a whole. With the integration now completed, synergies anticipated to be realised through the second half of the year and the business now being positioned to leverage off our increased scale, breadth and depth of service offering, Gama Aviation has a strong platform from which to deliver on-going organic growth whilst also looking to pursue its strategy of adding value enhancing acquisitions to the Group. The Board therefore looks to the future with confidence.   

CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME

		Six months	Six months
		ended	ended
		30 June	30 June
		2015	2014*
		(unaudited)	(unaudited)
	Note	$'000	$'000
Continuing operations
Revenue		115,129	89,385
Cost of sales		(89,566)	(75,070)
Gross Profit		25,563	14,315
Gross profit percentage		22%	16%
Administrative expenses		(24,792)	(11,880)
Adjusted EBITDA		8,225	2,151
Exceptional items	3	(5,466)	604
Depreciation and amortisation		(1,988)	(320)
Operating profit		771	2,435
Finance costs		(1,053)	(1,154)
Share of results of associates		(283)	78
(Loss)/profit before tax from continuing operations		(565)	1,359
Taxation	4	-	(16)
(Loss)/profit from continuing operations		(565)	1,343
Discontinued operations
Loss after tax for the period from discontinued operations		(499)	-
(Loss)/profit for the period		(1,064)	1,343
Attributable to: Owners of the company		(1,044)	1,282
Non-Controlling interest		(20)	61
		(1,064)	1,343
Items that may be reclassified to profit and loss:
Exchange gains arising on translation of foreign operations		148	512
		(916)	1,855
Non-controlling interest		20	(61)
(Loss)/profit and total comprehensive income for the period attributable to the owners of the Company		(896)	1,794
Earnings per share attributable to the equity holders of the parent
-    basic (cents)	6	(2.4c)	4.7c
-    diluted (cents)		(2.4c)	4.7c
-   Adjusted basic (cents)		12.5c	2.5c
-   Adjusted diluted (cents)		12.5c	2.5c

*The comparative figures for the six months ended 30 June 2014 set out above are for Gama Aviation Holdings (Jersey) Limited prior to the reverse takeover of Hangar8 plc that was concluded on 5 January 2015.

CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION

		30 June	30 June
	Note	2015	2014
		(unaudited)	(unaudited)
		$'000	$'000
Non-current assets
Goodwill		37,460	2,902
Intangible assets		11,411	4,855
Total Intangible assets		48,871	7,757
Property, plant and equipment		15,349	12,220
Investment in associate		-	337
Deferred tax asset		460	459
		64,680	20,773
Current assets
Assets held for resale		3,599	12,999
Inventories		9,585	7,237
Trade and other receivables		76,502	46,351
Cash and cash equivalents		11,961	5,668
		101,647	72,255
Current liabilities
Trade and other payables		(79,322)	(48,108)
Obligations under finance leases		(1,541)	(1,465)
Borrowings		(1,168)	(1,347)
Provisions		(2,781)	-
Deferred revenue		(20,661)	(19,839)
Corporation tax liability		(785)	-
		(106,258)	(70,759)
Net current (liabilities)/assets		(4,611)	1,496
Non-current liabilities
Obligations under finance leases		(6,657)	(7,958)
Borrowings		(1,165)	(16,362)
Deferred tax liability		(1,642)	(987)
		(9,464)	(25,307)
Net assets/(liabilities)		50,605	(3,038)
Capital and reserves attributable to equity holders of the company
Share capital		670	426
Share premium		35,458	8,846
Merger relief reserve		132,847	-
Reverse acquisition reserve		(95,828)	(9,272)
Other reserve		20,209	20,209
Foreign exchange reserve		(912)	(512)
Retained earnings		(41,918)	(23,718)
		50,526	(4,021)
Non-controlling interest		79	983
Total surplus/(deficit)		50,605	(3,038)

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASHFLOWS

		Six months	Six months
		ended	ended
		30 June	30 June
		2015	2014
	Note	(unaudited)	(unaudited)
		$'000	$'000
Cash flows from operating activities
(Loss)/profit before tax from continuing operations		(565)	1,359
Loss before tax from discontinued operations		(499)	-
(Loss)/profit before tax		(1,064)	1,359
Depreciation and amortisation		1,988	320
Loss on disposal of property, plant and equipment		371	11
Foreign exchange (gain)/loss		(9)	223
Finance costs		1,053	1,154
Increase in inventories		(4,648)	(2,167)
Decrease/(increase) in trade and other receivables		7,171	(10,416)
(Decrease)/increase in trade and other payables		(10,450)	550
Movement in provisions		-	(616)
Increase in deferred revenue		-	7,456
Net cash flows from operating activities		(5,588)	(2,126)
Cash flows from Investing activities
Purchases of property, plant and equipment		(568)	(1,611)
Proceeds on disposal of property, plant and equipment		-	120
Sales of assets		1,564	-
Purchase of subsidiary: cash		3,213	-
Interest paid		(1,052)	-
Net cash used in investing activities		3,157	(1,491)
Income taxes paid		(902)	-
Financing activities
Repayment of obligations under finance leases		(720)	(602)
Decrease in borrowings		(15,679)	3,164
Issue of ordinary shares		27,722	-
Share issue costs		(1,014)	-
Net cash from financing activities		10,309	2,562
Net increase/(decrease) in cash and cash equivalents		6,976	(1,055)
Cash and cash equivalents at beginning of year		4,985	6,815
Effect of exchange rate fluctuations on cash held		-	(92)
Cash and cash equivalents at end of year		11,961	5,668

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY (unaudited)

			Merger	Reverse		Foreign		Non-
	Share	Share	relief	acquisition	Other	exchange	Retained	controlling
	capital	premium	reserve	reserve	reserve	reserve	earnings	interest	Total
	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000
At 1 January 2015	426	8,846	-	(9,272)	20,209	(1,060)	(40,874)	99	(21,626)
Issue of shares	244	26,612	-	-	-	-	-	-	26,856
Reverse merger transaction	-	-	132,847	(86,556)	-	-	-	-	46,291
Transactions with owners	670	35,458	132,847	(95,828)	20,209	(1,060)	(40,874)	99	51,521
Loss for the period	-	-	-	-	-	-	(1,044)	(20)	(1,064)
Foreign exchange	-	-	-	-	-	148	-	-	148
Total comprehensive income	-	-	-	-	-	148	(1,044)	(20)	916
At 30 June 2015	670	35,458	132,847	(95,828)	20,209	(912)	(41,918)	79	50,605

The accompanying notes are an integral part of this interim financial information.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM STATEMENTS

1.   Basis of preparation

Gama Aviation plc, formerly Hangar8 plc, (the "Company") is a company domiciled in England.  The basis of preparation of this financial information is consistent with the basis that will be adopted for the full year accounts which will be prepared in accordance with IFRS as adopted by the European Union.

While the financial figures included in this half-yearly report have been computed in accordance with IFRS applicable to interim periods, this half-yearly report does not contain sufficient information to constitute an interim financial report as that term is defined in IAS 34.

This interim financial information has neither been audited nor reviewed pursuant to guidance issued by the Auditing Practices Board and the financial information contained in this report does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. The 30 June 2014 figures have been extracted from the unaudited financial statements for that period from the admission document.

2.   Accounting policies

The condensed consolidated interim financial information has been prepared using accounting policies consistent with those set out in the historical financial document within the admission document except as set out below.  These accounting policies have been applied consistently to all periods presented in this Financial Information. 

Critical accounting estimates & judgements and principal risks & uncertainties

There have been no changes to any of the Group's critical accounting estimates and judgements of its principal financial risks with the exception of the accounting estimates and judgements on the fair value of intangibles under IFRS 3.

Going concern

The Directors are of the opinion that as at 30 June 2015, the Group and Company's liquidity and capital resources are adequate to deliver the current strategic objectives and business plan and that both the Group and the Company remain a going concern.

3.   Exceptional Items

Operating profit is stated after exceptional items and discontinued activities.

Exceptional items relate to the transaction costs incurred in the current period that are in respect of the commercial transaction with Hangar8 plc, $3.5m and the subsequent integration and business re-organisation costs, $2m.

Exceptional items in the prior period relate to owned aircraft plane impairment of $0.22m, litigation related costs of $1.04m that were settled in late March 2014 and a loan settlement discount credit of $1.87m received for early settlement of loan finance on owned aircraft. 

The Discontinued activities relate to the losses generated by the owned aircraft within the group that are held for sale as part of the group strategy to exit the business model of owned aircraft that are deployed solely for the purposes of ad-hoc charter. 

4.   Taxation

The tax charge for the half year is calculated on the basis of the estimated full year effective tax rate and therefore an estimated corporation tax charge for the period of £Nil (2014: $16,000). 

5.   Segmental Analysis

Six months ended 30 June 2015 (unaudited) - consolidated
	US		Europe		MENA		Asia	Other	Totals
	Air	Ground	Air	Ground	Air	Ground	Air
Revenue	78,156	9,681	70,118	18,867	10,473	1,390	1,426	737	190,848
Gross Profit	6,642	2,626	7,519	11,474	957	543	152	341	30,254
Gross Profit  %	8.5%	27.1%	10.7%	60.8%	9.1%	39.1%	10.7%	46.3%	15.9%
EBITDA	1,923	1,351	1,166	6,698	(229)	(313)	(171)	(2,200)	8,225
EBITDA  %	2.5%	14.0%	1.7%	35.5%	(2.2%)	(22.5%)	(12.0%)	(298.5%)	4.3%

Six months ended 30 June 2015 (unaudited) - statutory
	US		Europe		MENA		Asia	Other	Totals
	Air	Ground	Air	Ground	Air	Ground	Air
Revenue	3,876	9,681	70,118	18,867	10,473	1,390	-	724	115,129
Gross Profit	2,116	2,626	7,519	11,474	957	543	-	328	25,563
Gross Profit  %	54.6%	27.1%	10.7%	60.8%	9.1%	39.1%	-	45.3%	22.2%
EBITDA	1,923	1,351	1,166	6,698	(229)	(313)	(171)	(2,200)	8,225
EBITDA  %	49.6%	14%	1.7%	35.5%	(2.2%)	(22.5%)	-	(303.9%)	7.1%
Six months ended 30 June 2014 (unaudited) - statutory
	US		Europe		MENA		Asia	Other	Totals
	Air	Ground	Air	Ground	Air	Ground	Air
Revenue	20,084	6,381	32,625	18,808	8,702	1,570	-	1,215	89,385
Gross Profit	1,195	664	3,690	8,249	784	536	-	(803)	14,315
Gross Profit  %	6.0%	10.4%	11.3%	43.9%	9.0%	34.1%	-	(66.1%)	16.0%
EBITDA	(548)	313	731	3,578	(194)	(30)	-	(1,621)	2,229
EBITDA  %	(2.7%)	4.9%	2.2%	19.0%	(2.2%)	(1.9%)	-	(133.4%)	2.5%

6.   Earnings per share ("EPS")

The calculation of the basic earnings per share is based on the earnings attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period. 

	Six months		Six months
	ended		Ended
	30 June		30 June
	2015		2014
	(unaudited)		(unaudited)
	$'000		$'000
(Loss)/profit attributable to ordinary shareholders	(1,044)		1,282
Add amortisation	955		-
Add exceptional items	5,466		(604)
Adjusted Earnings	5,377		678
Denominator
Weighted average number of shares used in basic EPS	42,994,442		27,341,960
Weighted average number of shares used in diluted EPS	42,994,442		27,341,960
Basic earnings per share - cents	(2.4c)		4.7c
Diluted earnings per share - cents	(2.4c)		4.7c
Adjusted Basic earnings per share - cents	12.5c		2.5c
Adjusted Diluted earnings per share - cents	12.5c		2.5c

7.   Acquisition

On 5 January 2015, Hangar 8 acquired, by way of a reverse takeover the entire issued share capital of Gama Aviation Holdings (Jersey) Limited, a privately owned global business aviation services group that focuses on air and ground operations. Hangar8 Plc became Gama Aviation Plc on that date.

As a result of the acquisition, the Enlarged Group is considered to be one of the five largest operators globally giving the Group the strong platform for expansion. It also expects to reduce costs through economies of scale and synergies. Goodwill of $36,721,000 and identifiable intangible assets of $11,805,000 arose on acquisition. The following table summarises the consideration paid for the Hangar 8 Group, the provisional fair value of the assets acquired and the liabilities assumed at the acquisition date.

Consideration at 5 January 2015
								$'000
Equity instruments (9,527,103 ordinary shares)								46,438
Total consideration transferred								46,438
Recognised amounts of identifiable assets acquired and liabilities assumed - provisional
Software								257
Property, Plant and Equipment								291
Licenses (included within intangibles)								171
Brand (included within intangibles)								1,051
Customer relationships (included within intangibles)								9,851
Workforce (included within intangibles)								732
Inventories								956
Trade and other receivables								41,273
Trade and other payables								(47,475)
Deferred tax liabilities								(603)
Goodwill								36,721
								43,225
Cash								3,213
Total								46,438

Acquisition related costs of $3.5m have been charged to the administrative costs in the consolidated income statement.

The fair value of the 9,527,103 ordinary shares issued as part of the consideration paid for the Hangar8 Plc Group was based on the published price on 4 January 2015.

The provisional fair value of trade and other receivables is $41,273,000 and includes trade receivable with a fair value of $19,946,000. The gross contractual amount for the trade receivables due is $26,076,000, of which $6,130,000 has been provided for as there is uncertainty regarding its collectability.

The fair value of the acquired identifiable assets of $11,805,000 (including Licenses, Brands, Customer relationships and Workforce) is provisional pending receipt of the final valuations for those assets.

8.   Copies of the interim statement

Further copies will be available from the Company's registered office at the Business Aviation Centre, Farnborough Airport, Hampshire, GU14 6XA, and from the Company's website: www.gamaaviation.com

 

END

 

 

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