2019 Full Year Results - For the year ended 31 January 2019 - Air Partner
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2019 Full Year Results For the year ended 31 January 2019
Mark Briffa Group Chief Executive
OVERVIEW
• Full year results in line with prior year with underlying PBT of £5.8m*
• Gross profit up 2.3%
Charter in line with prior year; record profits in US, up 30.2%, and Freight, up 45.3%
Consulting & Training up 25.0%, now contributing 11.9% to overall gross profit
• Underlying EPS of 9.6p, up 14.3%*; statutory EPS of 5.6p (FY18: 6.9p)
• Full year dividend up 1.8% at 5.60p with final dividend of 3.85p, an increase of 1.3%
• Strategy intact and proving effective; moving forward fitter and stronger, and with confidence
*Stated before exceptional and other items
3 FULL YEAR RESULTS MAY 2019
A GLOBAL AVIATION SERVICES GROUP
Blue Chip Global
Customer Base
• Airline Operators
• Military & Civil
CHARTER MANAGED CONSULTI NG
SERVI CES & TRAI NI NG
• Regulators
• Airports
R E G U L AT O R Y & • Oil & Gas
C O M P L I AN C E
P R I V AT E • Sports
JETS
• MICE
WI L D L I F E
C O M M E R C I AL
JETS
H AZ AR D • Corporates
F AT I G U E R I S K M AN AG E M E N T ,
AT C M AN AG E D
J E T C AR D FREI GHT
M AN AG E M E N T
SERVI CES
• Individuals
AVIATION SAFETY
4 FULL YEAR RESULTS MAY 2019
STRONG GEOGRAPHIC PRESENCE
Founded in 1961, Air Partner is an
aviation services group that provides
worldwide aviation charter,
consulting and training services to
industry, commerce, governments
and private individuals and across
civil and military organisations.
Operating 24/7, 365 days
14 offices globally
AI R P AR T N E R O F F I C E S
c.350 employees globally
GATW ICK | FAIROAKS | LONDON | NEW YORK | FORT LAUDERDALE | HOUSTON | W ASHINGTON D.C.
LOS ANGELES | PARIS | COLOGNE | SINGAPORE | MILAN | ISTANBUL | VIENNA
5 FULL YEAR RESULTS MAY 2019
STRATEGY IN ACTION
2010: Military
contracts
Acquisition of Cabot
> 60% of profits
(Air Partner Remarketing). New York office opened Post Year End:
Acquisition of Baines Acquisition of SafeSkys Offices opened in
Simmons. Customer First New Finance System Houston and Singapore
initiative launched 1 into 5 share split More planned
2019: No one customer
> 10% profits
2015 2016 2017 2018 2019
Acquisition of Clockwork. Upskilling of key positions
Baines Simmons wins 10
year Isle of Man contract.
and Board capabilities
Processes & controls
83.7%
New dividend policy upgraded
announced Los Angeles office opened
Accounting Review Total Shareholder Return
6 FULL YEAR RESULTS MAY 2019
Joanne Estell Chief Financial Officer
CHANGES TO CONTROL ENVIRONMENT
• Rapid and thorough response: comprehensive work plan developed
• Good progress made in short space of time:
We have upgraded and upskilled key members of the finance and head office team
Roles and responsibilities reviewed, reducing dependency on one person and removing ‘single points of failure’
A new Risk and Assurance role created, reporting directly to the CFO with a direct line to the Chair of the Audit Committee
Balance sheet control and review process tightened
Improved quality and frequency of management information
Key policies and procedures rolled out, level of training increased
• We are on a road to recovery; control environment improved and processes in place to continually review and challenge arrangements
8 FULL YEAR RESULTS MAY 2019
2018/19 FINANCIAL HIGHLIGHTS
January January Change
£m’s
2019 2018 (%)
Gross transaction value (£m) 273.3 261.3 4.6%
Revenue 77.5 74.3 4.2%
Gross profit 35.5 34.7 2.3%
*Admin expenses & net impairment losses on financial assets (29.5) (28.8) (2.4)%
*Underlying operating profit 6.0 5.9 1.7%
*Underlying profit before tax (£m) 5.8 5.8 -
Statutory profit before tax (£m) 3.4 4.8 (29.1)%
Underlying basic EPS (pence) 9.6p 8.4p 14.3%
Basic continuing EPS (pence) 5.6p 6.9p (18.8)%
Final dividend (pence) 3.85p 3.80p 1.3%
Total dividend (pence) 5.60p 5.50p 1.8%
9 *Stated before exceptional and other items FULL YEAR RESULTS MAY 2019
2018/19 PROFIT RECONCILIATION
January January
£m’s
2019 2018
Underlying profit before tax (£m’s) 5.8 5.8
Costs related to the accounting review and associated items (1.3) -
Abortive acquisitions costs (0.5) (0.3)
Changes in Board composition (0.4) -
Amortisation of purchased intangible assets (0.4) (0.3)
Acquisition costs & non – cash acquisition costs - (0.1)
Restructuring costs - (0.3)
Release of deferred consideration 0.2
Statutory profit before tax (£m) 3.4 4.8
10 FULL YEAR RESULTS MAY 2019GROSS PROFIT BY PRODUCT
20 100%
18 17.3 90%
11.9% 9.7%
15.9 13.8% 9.7%
16 80%
14 70%
29.3% 30.5%
12
10.4 10.6 60%
£’m
10 50%
8 40%
6 4.9 30%
4.2 44.9% 50%
4
3.4 3.4 20%
2 10%
0 0%
Commercial Jets Private Jets Freight Consulting & Training Jan-19 Jan-18
Commercial Jets Private Jets Freight Consulting and Training
Jan-19 Jan-18
• Commercial Jets down, owing to significant PY one-off contract
• Commercial Jets remains largest division at 44.9%
• Freight gross profit up 45.3%, driven by investment in people
• Freight growth leads to contribution of 13.8%
• Private Jets strong US performance, flat overall
• Consulting & Training now 11.9% of total, v 9.7% LY
• Consulting & Training up 25.0%, including SafeSkys; up 14.9%
on a LFL basis
11 FULL YEAR RESULTS MAY 2019GROSS PROFIT BY REGION
0.1% 3%
20 100%
18
17.4 17.6 90%
22.8% 17.9%
16 80%
14 70%
28.0% 28.3%
12 60%
9.9 9.8
£’m
10 50%
8.1
8 40%
6.2
6 30%
49.1% 50.8%
4 20%
2 1.1 10%
0.1
0 0%
UK Europe USA ROW Jan-19 Jan-18
UK Europe USA ROW
Jan-19 Jan-18
• Record growth in the US, up 30.2%; investment in people • >50% of gross profit coming from outside UK
and broadening of footprint • Further growth in the US takes contribution to 22.8%
• UK and Europe impacted by sector volatility in second half
12 FULL YEAR RESULTS MAY 20192018/19 BALANCE SHEET – as at 31 January 2019
January January
£ms
2019 2018
Intangible assets 11.6 12.1
Tangible assets 0.9 1.2
Trade and other receivables 19.1 16.3
Restricted cash balances – Jet Card 17.7 15.9
Other cash balances 7.5 7.3
Other current assets 0.3 0.7
Trade and other payables (8.0) (6.7)
Deferred income (25.4) (24.3)
Other current liabilities (5.8) (6.9)
Deferred tax (net) (0.3) (0.3)
Borrowings (5.5) (2.5)
Other long term liabilities (0.2) (1.4)
Net assets 11.7 11.4
13 FULL YEAR RESULTS MAY 2019CASH FLOW
• The above explains net increase in cash between opening and closing balances
• Level of debt increased to support growth in Freight where ability to mobilise is a competitive advantage
• Increase in working capital relates to trade receivables – no issues with ageing of receivables
14 FULL YEAR RESULTS MAY 2019
• Record JetCard deposits received in the UKMark Briffa Group Chief Executive
CHARTER – flat year on year
COMMERCIAL JETS
• Strength across territories offsetting large, one-off, prior year contract
• Driven by Tour Ops, Government, Sports, and Conferences & Exhibition sectors
• Significant business in US from corporate shuttles and Typhoons recovery
• 3-year managed services contract win for Airbus Commercial Jets Private Jets Freight
• Cross-selling supporting underlying strength
16%
PRIVATE JETS
• UK: Investment in new sales teams; benefit expected in current financial year
51%
• UK & Europe: sector volatility, key customers flying less; but growth in JetCard numbers and deposits 33%
• US: Investment in people delivering growth in gross profit, in ad-hoc and JetCard
• US: Increase in JetCard membership, bookings and renewals
Gross Profit
FREIGHT
• Second year of record profits
• Good business wins and team growth across office network
• New team established in US, immediately profit enhancing
• Business coming from On Board Courier, Aircraft on Ground spares and Government requirements
16 FULL YEAR RESULTS MAY 2019CONSULTING & TRAINING – up 25.0%
• We are integrating all Consulting & Training businesses into Baines Simmons
• Gross profit was up 25.0%, including impact of SafeSkys. LFL gross profit up 14.9%
BAINES SIMMONS
• Strong new management driving strategy, clear direction and future growth
• Record performance in Training with momentum continuing into current year
• Good new business wins, and cross selling opportunities crystallising
CLOCKWORK RESEARCH
• Small, niche business – good progress integrating Fatigue Risk Management into Baines Simmons
11.9%
• Co-authored industry guidance with South West Airlines and NASA
• Other work carried out incudes with Air France and Jet2.com
Consulting & Training
SAFESKYS contribution to Group
gross profit
• Wildlife Management holds strong market position in the UK
• New contracts won and existing extended; secured Western region with RAF for further minimum three years
• New contracts supporting foreign government air forces within Europe
• Provision of £0.7m made for two loss making Air Traffic Control contracts
17 FULL YEAR RESULTS MAY 2019STRENGTHENING SENIOR MANAGEMENT
• We have upskilled key management positions and strengthened the Board
• The right people in place to take our business to the next level
Ed Warner Joanne Estell Paul Dollman
Chairman (April 2019) CFO (September 2018) Chair of Audit (April 2019)
Ian Holder Kevin Macnaughton Craig Pattison
MD of Consulting & Training MD of Charter (April 2019) HR Director (July 2018)
(April 2018)
18 FULL YEAR RESULTS MAY 2019LONG TERM GROWTH STRATEGY
• Putting customers first, to provide an exceptional tailored Throughout the challenges of H1 we remained
service across the Group focused on our strategic objectives
We continued to deliver an outstanding
• To grow both organically and through acquisition customer service
• We are investing in the future: in our people, processes and We opened an office in LA, expanded our
infrastructure teams in Freight and in sales
We upskilled key management positions and
• Whilst broadening the portfolio of aviation services we offer, improved financial controls
to reduce Charter volatility and improve quality of earnings
We are committed to our acquisition strategy
• Maintaining our strong brand identity to unite our businesses and continue to assess a pipeline of
opportunities
across divisions
The actions we have taken have reset the
• We manage the business for the long term, delivering business operationally and we move forward
returns to shareholders through progressive dividends fitter and stronger
19 To build a world-class, global aviation services group FULL YEAR RESULTS MAY 2019POST YEAR-END
• We opened new offices in Houston and Singapore in February 2019
• Our investment in Managed Services is delivering results:
• Appointed by Aurigny to manage its operations control centre in April 2019
• New Chair, Ed Warner, and Chair of Audit and Risk Committee, Paul Dollman, appointed
• We are re-energising our brand identity
20 FULL YEAR RESULTS MAY 2019SUMMARY AND OUTLOOK
• Robust Full Year performance; strategy intact and proving effective
• Well invested business, great people and a solid global customer base
• Reset the business operationally, and move forward fitter and stronger to deliver strategy
• We will continue to invest to support our growth, both organic and by acquisition
• Current trading is slightly ahead of the prior year
• Well placed to manage the continuing challenges, in the aviation sector and the wider economic backdrop
21 FULL YEAR RESULTS MAY 2019Appendix
AIR PARTNER: TWO DIVISIONS
CHARTER CONSULTING & TRAINING / MANAGED SERVICES
Charter of large aircraft for 20+ people for
A world leading aviation safety consultant specialising
COMMERCIAL governments, corporates, sports and BAINES
in regulation & compliance, safety management,
JETS entertainment teams, industrial, manufacturing SIMMONS training, consulting and outsourcing
customers and tour operators
A leading fatigue risk management consultancy
Includes A global aircraft remarketing service akin to used CLOCKWORK delivering innovative & effective fatigue risk
REMARKETING sales, covering both commercial and private jets RESEARCH management solutions for clients across various sectors
of the aviation industry
Charter of small aircraft or jets for up to 19
people, for business and leisure, by corporates, A leading provider of turnkey Air Traffic Control (ATC)
PRIVATE JETS
HNWIs and government. Pre paid JetCard SAFESKYS Services including ATC engineering and wildlife
& JETCARD offering fixed hourly rates, guaranteed aircraft management units
availability
Charter of cargo aircraft & part-charter for
regular & bespoke requirements, including EMERGENCY Experts in planning, executing and managing air
FREIGHT emergency aid drops, time critical door to door PLANNING support and evacuations worldwide
freight delivery and on-board couriers
SUPPORT 24/7 Operations
SERVICES Travel Management
23 FULL YEAR RESULTS MAY 2019
3UNDERLYING OPERATING PROFIT BY PRODUCT
OP Profit contribution
8%
24%
50%
18%
CJ PJ Freight C&T
24 FULL YEAR RESULTS MAY 2019DISCLAIMER
Certain information included in this presentation is forward looking and involves risks, assumptions and uncertainties that could cause actual
results to differ materially from those expressed or implied by forward looking statements. Forward looking statements cover all matters which
are not historical facts and include, without limitation, projections relating to results of operations and financial conditions and Air Partner plc’s
plans and objectives for future operations. These may include, without limitation, discussions of expected future revenues, financing plans,
expected expenditures, risks associated with changes in economic conditions, the strength of the aviation markets in the jurisdictions in which
the Air Partner group operates, changes in exchange and interest rates. Forward looking statements can be identified by the use of forward
looking terminology, including, but not limited to, terms such as "believes", "estimates", "anticipates", "expects", "forecasts", "intends",
"plans", "projects", "goal", "target", "aim", "may", "will", "would", "could" or "should" or, in each case, their negative or other variations or
comparable terminology. Forward looking statements are not guarantees of future performance. All forward looking statements in this
presentation are based upon information known to Air Partner plc on the date of preparation of this presentation. Accordingly, no assurance
can be given that any particular expectation will be met and readers are cautioned not to place undue reliance on forward looking statements.
Additionally, forward looking statements regarding past trends or activities should not be taken as a representation that such trends or
activities will continue in the future. Other than in accordance with its legal or regulatory obligations (including under the UK Listing Rules and
the Disclosure and Transparency Rules of the Financial Conduct Authority), Air Partner plc undertakes no obligation to publicly update or revise
any forward looking statement, whether as a result of new information, future events or otherwise. Nothing in this presentation shall exclude
any liability under applicable laws that cannot be excluded in accordance with such laws.
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