Gama Aviation PLC Trading Update (5017F)
October 29 2018 - 3:01AM
UK Regulatory
TIDMGMAA
RNS Number : 5017F
Gama Aviation PLC
29 October 2018
29 October 2018
Gama Aviation Plc (AIM: GMAA)
("Gama Aviation", "the Company" or "the Group")
Trading Update
Gama Aviation Plc, one of the world's largest business aviation
service providers, today announces a trading update for the full
year to 31(st) December 2018.
At the time of the H1/18 interim results substantial growth was
anticipated in the 2(nd) half of the year. However, with Q3
delivered and with better visibility for the full year, trading in
certain divisions has not improved sufficiently to deliver the full
year expectations.
As a result, whilst no individual division is significantly
weaker, in aggregate there is a material impact, and accordingly
the board now expects the full year underlying operating profit to
be $3m below its original expectations. Nevertheless, the
investments made into the capacity and capability of the business
during 2018 have progressed well and provide a robust operational
baseline for continuing the execution of our strategy into
2019.
Trading update
Air Division
The performance of our Europe, Middle East and Asia air
divisions remains stable, with these businesses performing broadly
as expected, despite difficult trading conditions in Europe and the
Middle East. Commercial progress continues with significant special
missions opportunities in Europe and fleet growth prospects in ME
and Asia.
The profit from the Group's US Air associate is not now in line
with expectations for the full year due to slower than the expected
growth in charter and aircraft management revenues.
Ground Division
The Europe ground division has successfully completed its
transition of operations from Farnborough and Oxford airports to
our major new facility at Bournemouth International Airport. This
has been a substantial endeavour and business continuity has been
achieved with key staff retained in line with the transition plan.
Productivity gains have already been delivered as intended and
business prospects are good with the new facility now fully
operational. However, our forecast assumed a level of revenue
growth during this transition that has proved too ambitious in the
circumstances. We do however expect a proportion of these lost
revenues to be realised in 2019.
The US ground division continues to deliver strong organic
growth and solid productivity. However, the growth in maintenance
revenues, whilst strong, has not been at the level required to
achieve our expectations, partly as a result of it taking longer
for new capacity to come on stream.
In Asia, the Group's associate China Air Services Limited (CASL)
has continued to underperform with the unexpected loss of contracts
significantly impacting margins in an operationally geared
business. Plans are in place to reduce costs and recover
margins.
The Middle East Ground division is performing well in the
context of a challenging regional market.
Marwan Khalek, Chief Executive of Gama Aviation said:
" The reduction in our expectations for this year is
disappointing with the growth that we had anticipated not coming
through as strongly as expected. Nonetheless, we are still
expecting healthy growth for the year whilst continuing to make
good progress in building capability and capacity and securing
encouraging new business in all of our key markets. The
fundamentals of our business remain strong."
-ENDS-
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
For further information please visit www.gamaaviation.com or
contact:
Gama Aviation Plc +44 (0) 1252 553029
Marwan Khalek, Chief Executive Officer
David Stickland, Chief Financial Officer
Camarco +44 (0) 20 3757 4992
Ginny Pulbrook
Geoffrey Pelham-Lane
Jefferies International +44 (0) 207 029 8000
Simon Hardy
Will Soutar
Gama Aviation - Notes to Editors
Gama Aviation Plc (AIM: GMAA) is a global business aviation
services group that specialises in providing support for
individuals, corporations and government agencies; allowing them to
deliver on the promises they make.
The Group's services are split into two divisions: Air and
Ground. Air services include aircraft management, special mission
support and charter. Ground services cover aircraft maintenance
services, aircraft modification design and installation, and Fixed
Base Operations (FBO).
More details can be found at: http://www.gamaaviation.com/
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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