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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Air Partner Plc | LSE:AIR | London | Ordinary Share | GB00BD736828 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 124.50 | 124.50 | 125.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMAIR
RNS Number : 1094F
Air Partner PLC
25 October 2018
LEI: 213800JLR6YIRMSCUS98
25 October 2018
Half year results for the six months ended 31 July 2018
Air Partner delivers good first half trading
Air Partner plc ("Air Partner" or "Group"), the global aviation services group, today reports results for the six months to 31 July 2018.
Hot Features
Premium
July 2018 July 2017 Change (%)
Gross Transaction Value GBP132.8m GBP135.5m (2.0)
Gross profit GBP18.0m GBP18.1m (0.6)
Underlying(--) profit before
tax GBP4.2m GBP4.1m 2.4
Statutory profit before
tax GBP2.6m GBP3.7m (29.7)
Net cash (non-JetCard cash
less debt) GBP6.7m GBP10.6m (36.8)
Underlying(--) basic EPS
(pence) 6.1p 5.6p 8.9
Basic continuing EPS (pence) 3.6p 4.9p (26.5)
Interim dividend (pence) 1.75p 1.7p 2.9
-- - Underlying results are stated before other items (see note 1 & 3)
Financial Highlights:
-- Gross profit of GBP18.0m broadly in line with the prior period -- Underlying(--) profit before tax of GBP4.2m, a year-on-year increase of 2.4%
-- Statutory profit before tax of GBP2.6m, GBP1.1m lower than the previous year driven by the associated costs of the accounting review
-- Underlying(--) EPS of 6.1p, 8.9% up on the prior year -- Proposed interim dividend of 1.75p, an increase of 2.9%, payable on 7 December 2018 -- Net cash (excluding JetCard cash) of GBP6.7m, GBP1.9m up on the year end
Operating Highlights:
-- Commercial Jets performed well against a tough comparative period, buoyed by strong FIFA World Cup and Tour Operator flying
-- US profits increased across divisions: investment in talent coming through -- Private Jets strong in US; flat in UK and Europe -- Continued strength in Freight with gross profits up 36% -- Consulting & Training gross profit up 8%
Strategic Highlights and Outlook
-- Progress against strategy: acquisitions now contributing 15% of Group gross profits -- Targeted recruitment driving organic growth -- Confidence in expectations for the full year
Mark Briffa, CEO of Air Partner, commented: "I am pleased to report on a solid first half performance, in which we have made continued progress against our strategy. We have seen an increased contribution from our acquisitions, good trading against a tough comparable period, and strong performances from JetCard in the US and the Freight division, as well as increased activity from the FIFA World Cup and Tour Operations in Commercial Jets. This has resulted in good underlying profitability, an improvement in net cash from the year end and a healthy dividend increase. These results provide the Group with a solid platform for future growth, from which we can continue to build and strengthen the business, ever extending and enhancing the services and capabilities we offer our global client base."
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.
CHAIRMAN'S STATEMENT
I am pleased to report that Air Partner has traded well over the first half of the year. Gross profit for the six months to 31 July 2018 is in line with the prior year at GBP18.0m (H1 2017: GBP18.1m) and underlying profit before tax rose by 2.4% to GBP4.2m (H1 2017: GBP4.1m). Statutory reported profit of GBP2.6m was lower than the prior year (H1 2017: GBP3.7m) due to the one-off costs associated with the accounting review.
It is encouraging that these results include substantial contributions from the areas we have invested in, especially our recent acquisitions, with good growth in Consulting & Training, the US business and our Freight division. These positive effects were offset by a reduction in the Commercial Jet division where gross profits were down 11.1% due to a significant one-off contract in the prior year. Our strategy continues to be one of targeted investment in our Charter business, while building a more complete portfolio of aviation services, with the express intention of reducing the Group's exposure to the volatility of the charter market and improving the overall quality of our earnings.
We are continuing to invest in our people, infrastructure and operations. The implementation of effective financial controls is advanced and will continue to be in sharp focus. I am excited about the progress the Group is making, and the steps being taken to ready Air Partner for the next phase of growth.
Our People
We are committed to recruiting and training the best people to join our already strong and customer focused teams, in Consulting & Training as well as in Charter and, over the course of this year, we have upgraded our finance capabilities.
Our success depends upon our teams within the Group, and on behalf of the Board, I would like to thank them for their continued hard work and outstanding commitment to our customers.
Board
In August we were all saddened by the passing of our Chairman Peter Saunders after a brief illness. Peter joined our Board in September 2014 and was appointed as Chairman in June 2017. Over this period, Peter provided a significant contribution to our strategy and as Chairman he provided strong leadership. I assumed the role of Interim Chairman while the search is undertaken for a successor to Peter.
In April, Neil Morris resigned as Chief Financial Officer ("CFO") and in September we announced the appointment of Joanne Estell as our CFO and Board Director.
Shaun Smith has informed the Board that he will not stand for re-election at the 2019 Annual General Meeting having completed his three year term as a Non-Executive Director. Shaun has been fully involved in both the recruitment process for our new CFO and the selection process for new Auditors who will be appointed in due course. The search for Shaun's replacement will run in parallel to our search for a Non-Executive Chairman. Shaun joined the Board in May 2016 and I express the thanks of a grateful Board for his diligence, support and counsel during his tenure.
Dividend
The Board is proposing an interim dividend of 1.75p, representing a year-on-year increase of 2.9%. The interim dividend is expected to be paid on 7 December 2018 to those shareholders registered at close of business on 9 November 2018. The ex dividend date will be 8 November 2018.
Outlook
The Board is pleased by the Group's trading performance over the first half of the year. We are encouraged by the success of prior investment in the business as demonstrated in these results, and we are committed to ongoing investment in our future. We will continue to upskill key positions, empower our people and enforce effective controls, enabling further delivery of our long term growth strategy. We therefore remain confident in the Group's prospects for the full year and beyond.
As we always state, the global charter business has consistently been, and will continue to be, a volatile industry. Against this backdrop we manage the business for the long term, with a very clear strategy of alignment to the needs of our global customer base. We have a strong portfolio of global aviation services, which provides us with diversified exposure to sectors and geographies, and our portfolio approach, without any single product or market dominance, often enables us to mitigate volatility, in either direction, in any one market or product line over the course of a year.
In line with our clear growth strategy, the Board continues to assess investment opportunities, both organic and acquisition, to enhance or extend the services and capabilities we offer our customers, which will strengthen and advance our business.
Richard Jackson
Interim Non-Executive Chairman
CHIEF EXECUTIVE'S REVIEW
Air Partner has performed well over the first half of the year with underlying profit before tax of GBP4.2m, an increase of 2.4% on the prior year. Other items of GBP1.6m were excluded from underlying profits, comprising GBP0.7m relating to the cost of the accounting review process, GBP0.5m of abortive acquisition fees and GBP0.2m of costs relating to the change of Board composition, all of which were in line with the Board's expectations and were noted in the year end accounts, and GBP0.2m of amortisation of acquired intangibles.
Statutory reported profit for the period was therefore down 29.7% at GBP2.6m. Underlying trading has been strong over the first half and I am pleased with the progress made, and the hard work and commitment from all our people, which is delivering a consistently first-class experience to our customers globally.
It was with tremendous sadness that we learnt of our former Chairman Peter Saunders's death in August. Peter and I shared an unwavering belief of where our organisation should be on the global stage and he steered us with determination and strong leadership on our journey of transformation.
Divisional Review
Charter
Our Charter division benefited from strong performances in the US and in Freight. The US business has seen ongoing benefit from investments made in management and sales teams and the new office opened in Los Angeles in June strengthens Air Partner's existing US network, enabling the provision of a broad spectrum of Charter services to a wider US customer base. Freight performed well in the period with gross profits up 36.4% at GBP1.5m (H1 2017: GBP1.1m). Commercial Jets performed well over the first half, helping to offset the significant contribution of a large one-off contract in the comparative period. Charter gross profit for the six months ended 31 July 2018 was therefore broadly in line with the prior year at GBP15.4m (H1 2017: GBP15.7m) with underlying operating profit of GBP4.8m (H1 2017: GBP4.7m).
Commercial Jets
Commercial Jets had a strong second quarter due to increased activity around the FIFA World Cup and a good result from Tour Operations and short term leasing. Air Partner Remarketing has concluded sales for Kenya Airways and Investec Bank plc. The division also has a number of exclusive mandates in operation although these mandates may not complete, as previously expected, by year end. Commercial Jets contributes 47% to Group gross profit. Overall, largely due to the aforementioned one-off contract in the comparative period, gross profit for Commercial Jets was down 11.1% at GBP8.4m.
Private Jets
In Private Jets, gross profit increased year-on-year, by 5.9% to GBP5.4m (H1 2017: GBP5.1m). Overall, Private Jets contributes 30% to Group gross profit.
Private Jets in the US performed well with new card sales and bookings up over the first half. The continued success in the US has been driven by recent investments in the team and builds on a record performance in the region last year. The number of JetCards in issue in the US has risen by 20% over the first six months, with bookings up 34% and a good rate of renewals.
Private Jets in Europe and the UK were flat year-on-year, reflecting a normal gestation period of sales investment as new teams establish themselves. The number of JetCards in issue has increased and renewals across Europe and the UK are in line with expectations.
Freight
Our Freight division continues to outperform with gross profit up 36.4% to GBP1.5m (H1 2017: GBP1.1m). Freight contributes 8% to Group gross profit.
As well as bringing on board new clients through targeted marketing campaigns and successful cross selling with our Commercial Jets division, we have continued to invest in our teams across regions. We are quickly seeing the benefit of this investment with the experience, customers and opportunities it brings with it. Whilst freight is an especially volatile sector, these results are a great achievement in what we consider a strategic offering that enables us to provide our customers with a full suite of aviation services.
Consulting & Training
Our Consulting & Training division, which generated 15% of Group gross profit, is trading in line with the Board's expectations, successfully delivering some large programmes for our broad, global customer base. Gross profit was up 8.0% year-on-year to GBP2.7m (H1 2017: GBP2.5m) with underlying operating profit GBP0.5m (H1 2017: GBP0.4m).
Baines Simmons
New management and a focus on costs and contracts are having a positive impact at Baines Simmons where a number of new contracts across both military and commercial sectors were won over the first half. At the end of the last financial year, Baines Simmons won a four to six year contract with the Ministry of Defence. That programme has now started with good revenue projected for the second half of this financial year. The pipeline for the remainder of the year looks strong and the business under Air Partner's ownership is now set up for success.
Clockwork Research
Whilst small, Clockwork Research complements our Baines Simmons business and we now offer Fatigue Risk as part of the Baines Simmons portfolio of services. Over the first half, Clockwork Research has successfully undertaken a safety case for Air France and assisted Croydon Trams in managing their fatigue risk. As a result of the investment made in additional resource to support business development, the pipeline looks encouraging.
SafeSkys
We have made good progress with SafeSkys in its first year of ownership and are well advanced in our plans to integrate back office support functions. SafeSkys has a strong customer base, with long term contacts over four to six years providing good visibility of revenues. Under Air Partner ownership, we are encouraged by the growth opportunities we see in Wildlife Hazard Management Services and Air Traffic Control.
Strategy
We are making excellent progress in implementing our long term growth strategy. Our focus is on both organic growth and growth through acquisition. We are benefiting from a growing aviation market, and our broad offering and portfolio approach enable us to cross sell between our divisions and extensive customer base whilst driving internal efficiencies. We will continue to strengthen our core as we focus on key financial controls and deliver our CRM upgrade.
We are well regarded in the industry, with long term blue-chip customers across our business lines, and internationally recognised for our customer service. It is this standing within the industry that enables us to attract key talent as we continue to upskill management and processes. I am pleased with the considerable success of recent recruitment and we continue to actively hire across the organisation globally as we look to expand our existing offices and broaden our geographic reach with offices in new locations.
Outlook
We have delivered a solid trading performance over the first half of this financial year. We continue to implement our exciting growth plans, investing in people, offices and infrastructure, processes and controls, as we position the business for our next phase of growth.
As we move into the second half, and ahead of the traditionally more challenging final quarter, trading has remained in line with management expectations.
Mark Briffa,
Chief Executive Officer
FINANCIAL REVIEW
Accounting policies
As required, we have adopted IFRS 9, Financial Instruments and IFRS 15, Revenue from Contracts with Customers. We have applied the new standards using the cumulative effect method i.e. recognising the cumulative effect of applying the new standard at the beginning of the year of initial application, with no restatement of comparative periods.
IFRS 9 does not have a material impact on the Group and although the adoption of IFRS15 does not change the overall net asset position for the Group, it has changed the presentation of trade receivables and deferred income in the balance sheet. Please refer to note 1 for a full disclosure of the impact.
IFRS 16
The group will adopt IFRS 16 from the start of the next financial year and as permitted, it will not retrospectively apply the standard. Under IFRS 16, the majority of operating leases will be accounted for as right of use assets, which will largely be offset by corresponding lease liabilities. The lease liability will increase net debt. It is anticipated that operating expenses will decrease and financing costs will increase as the current operating lease charge is replaced by depreciation and interest. The overall impact on net profit is not expected to be material.
Profit and Loss
Air Partner primarily uses gross profit as its key indicator of business performance. This is due to the potential for revenue, as determined under IFRS, to fluctuate depending on the number of contracts enacted in the year where the Company acts as principal, as opposed to agent.
Gross transaction value (GTV) was GBP132.8m (H1 2017: GBP135.5m) in the period and revenues were GBP25.4m representing an increase of 10.0% against H1 2017 (GBP23.1m). The definition of GTV is given in the accounting policies note.
Gross profit, the primary measure, was broadly flat to the prior year at GBP18.0m (H1 2017: GBP18.1m). Refer to the CEO section for a year-on-year break down by division. This converted to an underlying profit before tax of GBP4.2m an increase of 2.4% on the prior year (H1 2017: GBP4.1m).
Other items of GBP1.6m were excluded from underlying profits, comprising GBP0.7m relating to the cost of the accounting review process, GBP0.5m of abortive acquisition fees and GBP0.2m of costs relating to the change of Board composition, all of which were in line with the Board's expectations and were noted in the year end accounts, and GBP0.2m of amortisation of acquired intangibles.
Statutory reported profit before tax was GBP2.6m down by 29.7% on the prior year (H1 2017: GBP3.7m). This was driven by the level of other items in the period as described above
The Group's net finance charge of GBP0.1m (H1 2017: GBP0.1m) comprises interest on the Group's loan and interest receivable on cash balances.
Taxation
The income tax expense for the half year was GBP0.8m on the reported profit before tax of GBP2.6m. After adjusting for amortisation of acquired intangibles and other items, the underlying effective tax rate for the period was 23.1% (2017: 27.4%). This is higher than the UK statutory rate of tax due to the impact of international rates of tax. However it is lower than last year due to (i) the reduction in the US Corporation Tax rate from 35% to 21% due to the tax reform legislation commonly known as the Tax Cuts and Jobs Act, enacted on 22 December 2017, which has reduced the tax charge on profits earnt in the US and (ii) a change in mix in tax jurisdictions in which profits were earnt.
Earnings per share (EPS)
Underlying basic EPS was 6.1p (H1 2017: 5.6p), an increase of 8.9% in the period. Underlying basic EPS is calculated using the underlying profit attributable to the holders of ordinary shares. Basic EPS for the period was 3.6p (H1 2017: 4.9p), lower than the prior year due to the GBP1.4m of one-off other items in the period.
Balance sheet
Shareholders' funds
Shareholders' funds at 31 July 2018 stand at GBP11.7m versus GBP12.1m in the prior year. As disclosed at the year end, the prior year was restated for a reduction in net assets of GBP4.0m relating to a prior years accounting issue. The adjustment predominately concerns receivables and deferred income.
Goodwill and intangibles
Under IFRS, goodwill is no longer amortised but is instead subject to annual impairment tests. There were no impairments identified in the period. Goodwill on the balance sheet is valued at GBP6.8m (H1 2017: GBP3.8m) with the increase reflecting the recent acquisition of SafeSkys.
Intangible assets arising from business combinations are assessed at the time of acquisition in accordance with IFRS 3 and are amortised over their expected useful life. This amortisation is excluded from underlying profits.
Cash generation and net cash
At the balance sheet date the Group's own cash, net of borrowings, was GBP6.7m (H1 2017: GBP10.6m). The Group segregates JetCard cash to provide protection to our customers. This is shown as restricted bank balances on the face of the balance sheet.
Bank facilities
The Group's debt facility at 31 July 2018 comprised a revolving credit facility of up to GBP7.5m, arranged through the Group's principal banker, of which GBP2.5m was drawn down at the balance sheet date. The Group also has access to a multi-currency GBP1.5m overdraft facility. All financial covenants were complied with during the period and to the date of approval of this report.
Foreign currency effects
Where possible, the Group uses natural hedges to minimise its foreign exchange exposure, for example matching JetCard deposits denominated in Euro or US dollars with the respective liability. In addition, the Group uses derivative financial instruments to hedge certain transactions in accordance with its internal policies.
Accounting developments
We continue to build on the hard work already achieved to improve the overall control environment of Air Partner following the accounting review. We have strengthened the finance team in a number of areas and are in the process of rolling out new policies and procedures adopting the recommended best practices from our advisors as identified as part of the accounting review. We are already seeing real tangible benefits of this iterative process.
Joanne Estell
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 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 trends are outside the Group's control but the strategy remains to diversify the addressable market and broaden the client mix.
The United Kingdom is in the process of withdrawing from the European Union, and is scheduled to leave on 29 March 2019. There may be significant regulatory change depending on the terms of this withdrawal, currently being negotiated by the UK Government and the European Union. The Government has stated its intention to reach a positive deal which causes as little disruption to the aviation industry as possible. In September 2018, the Government issued a series of white papers covering 'flights to and from the UK', 'aviation safety' and 'aviation security' setting out regulatory changes in the event of a 'no deal' Brexit. We are closely following events as they develop; we comply with all relevant regulations and are confident that we will continue to do so post-Brexit.
Principal risks and uncertainties facing the Group
Aircraft charter broking, remarketing and consultancy 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 2018, 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 changes, both positive and negative, in the macro-economic climate.
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 2018. 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 interim report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The unaudited condensed consolidated financial statements included in this interim report have been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" as adopted by the European Union.
Mark Briffa Joanne Estell
Chief Executive Officer Chief Financial
Officer
24 October 2018 24 October 2018
The directors of Air Partner plc are listed in the Group's Annual Report and Accounts for the year ended 31 January 2018 and on our website at www.airpartner.com.
See more at: http://www.airpartner.com/en/investors.
Enquiries Air Partner 01293 844788 Mark Briffa, CEO Joanne Estell, CFO Kate Patrick, Investor Relations TB Cardew (Financial PR advisor) 020 7930 0777 Tom Allison 07789 998 020 Alycia MacAskill 07876 222 703 Lucy Featherstone 07789 374 663
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 : Charter division, comprising air charter broking and remarketing; and the Consulting & Training division, comprising the aviation safety consultancies, Baines Simmons, Clockwork Research and SafeSkys, as well as Air Partner's Emergency Planning Division. For reporting purposes, the Group is structured into four divisions: Commercial Jets, Private Jets, Freight (Charter) and Consulting & Training (Baines Simmons, Clockwork Research, SafeSkys and Air Partner's Emergency Planning Division). The Commercial Jet division charters large airliners to move groups of any size. Air Partner Remarketing, which is 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. SafeSkys is a leading Air Traffic Control and Environmental services provider to UK and International airports. 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 9001:2015 compliant for commercial airline and private jet solutions worldwide. www.airpartner.com
Consolidated income statement
for the half year ended 31 July 2018
Half year ended Half year ended Year ended 31
31 July 2018 31 July 2017 January 2018
(unaudited) (unaudited) (audited)
================================ =============================== ================================
Other Other Other
Continuing Underlying* items Total Underlying* items Total Underlying* items Total
operations Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
================== ==== =========== ======== ========= =========== ======= ========= =========== ======== =========
Gross transaction
value (GTV) 132,849 - 132,849 135,450 - 135,450 261,317 - 261,317
================== ==== =========== ======== ========= =========== ======= ========= =========== ======== =========
Revenue 25,423 - 25,423 23,109 - 23,109 48,508 - 48,508
Gross profit 2 18,042 - 18,042 18,118 - 18,118 36,082 - 36,082
Exceptional items - - - - - - (400) - (400)
Administrative
expenses (13,743) (1,573) (15,316) (13,966) (371) (14,337) (29,792) (1,011) (30,803)
================== ==== =========== ======== ========= =========== ======= ========= =========== ======== =========
Operating profit 2 4,299 (1,573) 2,726 4,152 (371) 3,781 5,890 (1,011) 4,879
Finance income 11 - 11 2 - 2 11 - 11
Finance expense (103) - (103) (104) - (104) (138) - (138)
================== ==== =========== ======== ========= =========== ======= ========= =========== ======== =========
Profit before tax 4,207 (1,573) 2,634 4,050 (371) 3,679 5,763 (1,011) 4,752
Taxation 9 (972) 211 (761) (1,108) 26 (1,082) (1,390) 218 (1,172)
================== ==== =========== ======== ========= =========== ======= ========= =========== ======== =========
Profit for the
period 2 3,235 (1,362) 1,873 2,942 (345) 2,597 4,373 (793) 3,580
================== ==== =========== ======== ========= =========== ======= ========= =========== ======== =========
Attributable to:
Owners of the
parent
company 3,235 (1,362) 1,873 2,942 (345) 2,597 4,373 (793) 3,580
================== ==== =========== ======== ========= =========== ======= ========= =========== ======== =========
Earnings/(loss)
per share:
Continuing
operations
Basic 5 6.1p (2.6)p 3.6p 5.6p (0.7)p 4.9p 8.4p (1.5)p 6.9p
Diluted 5 6.0p (2.5)p 3.5p 5.5p (0.6)p 4.9p 8.1p (1.5)p 6.6p
================== ==== =========== ======== ========= =========== ======= ========= =========== ======== =========
*Before other items (see note 3)
Consolidated statement of comprehensive income
for the half year ended 31 July 2018 (unaudited)
Half Half
year year Year
ended ended ended
31 July 31 July 31 January
2018 2017 2018
GBP'000 GBP'000 GBP'000
========================================================= ======== ======== ===========
Profit for the period 1,873 2,597 3,580
Other comprehensive income - items that may subsequently
be reclassified to profit or loss:
Exchange differences on translation of foreign
operations 113 97 (372)
Total comprehensive income for the period 1,986 2,694 3,208
========================================================= ======== ======== ===========
Attributable to:
Owners of the parent company 1,986 2,694 3,208
========================================================= ======== ======== ===========
Consolidated statement of changes in equity
for the half year ended 31 July 2018 (unaudited)
Restated Restated
Share Share (1) (1)
Share premium Merger Own Translation option Retained Total
capital account Reserve shares 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 2017 522 4,755 354 (672) 1,410 2,017 2,571 10,957
Profit for the period - - - - - - 2,597 2,597
Exchange differences
on translation of foreign
operations - - - - 97 - - 97
Total comprehensive
income for the period - - - - 97 - 2,597 2,694
Share option movement
for the period - - - - - 299 - 299
Issue of shares - (59) 59 60 - (60) - -
Share options exercised
during the period - - - 15 - - (14) 1
Dividends paid (note
4) - - - - - - (1,869) (1,869)
=========================== ========= ======== ======== ========= ============ ======== ========= ========
Closing equity as at
31 July 2017 522 4,696 413 (597) 1,507 2,256 3,285 12,082
=========================== ========= ======== ======== ========= ============ ======== ========= ========
(1) The balance sheets at 1 February 2017 and 31 July 2017 have been restated following the adjustments made in respect of the accounting issue set out in the Annual Report and Accounts for 2018. Please refer to note 1 for further details.
Share Share
Share premium Merger Own Translation option Retained Total
capital account Reserve shares 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 2018 522 4,696 413 (818) 1,038 2,358 3,314 11,523
Profit for the period - - - - - - 1,873 1,873
Exchange differences
on translation of foreign
operations - - - - 113 - - 113
=========================== ========= ======== ======== ========= ============ ======== ========== =========
Total comprehensive
income for the period - - - - 113 - 1,873 1,986
Share option movement
for the period - - - - - 217 - 217
Dividends paid (note
4) - - - - - - (1,979) (1,979)
=========================== ========= ======== ======== ========= ============ ======== ========== =========
Closing equity as at
31 July 2018 522 4,696 413 (818) 1,151 2,575 3,208 11,747
=========================== ========= ======== ======== ========= ============ ======== ========== =========
Consolidated statement of financial position
as at 31 July 2018
Restated Restated
(1) (2)
31 July 31 July 31 January
2018 2017 2018
(unaudited) (unaudited) (audited)
Note GBP'000 GBP'000 GBP'000
===================================== ==== ============ ============ ===========
Assets
Non-current assets
Goodwill 6 6,770 3,860 6,753
Other intangible assets 5,283 4,795 5,337
Property, plant and equipment 1,048 1,084 1,188
Deferred tax assets 497 533 497
===================================== ==== ============ ============ ===========
13,598 10,272 13,775
===================================== ==== ============ ============ ===========
Current assets
Trade and other receivables 26,068 42,059 26,514
Current tax assets 822 568 683
------------ ------------ -----------
Restricted bank balances 12,590 10,977 5,203
Other cash and cash equivalents 12,893 17,842 17,990
------------ ------------ -----------
Total cash and cash equivalents 25,483 28,819 23,193
Derivative financial instruments - 3 -
===================================== ==== ============ ============ ===========
52,373 71,449 50,390
===================================== ==== ============ ============ ===========
Total assets 65,971 81,721 64,165
===================================== ==== ============ ============ ===========
Current liabilities
Trade and other payables (7,916) (4,941) (7,273)
Current tax liabilities (1,734) (1,431) (972)
Other liabilities (5,152) (12,905) (4,925)
Borrowings - (2,872) -
Deferred income and JetCard deposits (34,569) (46,520) (34,351)
Provisions (293) (71) (409)
Derivative financial instruments - - (12)
===================================== ==== ============ ============ ===========
(49,664) (68,740) (47,942)
===================================== ==== ============ ============ ===========
Net current assets 2,709 2,709 2,448
===================================== ==== ============ ============ ===========
Long term liabilities
Borrowings (2,500) - (2,500)
Deferred consideration (977) (200) (977)
Deferred tax liability (780) (699) (802)
Provisions (303) - (421)
Total long term liabilities (4,560) (899) (4,700)
===================================== ==== ============ ============ ===========
Total liabilities (54,224) (69,639) (52,642)
===================================== ==== ============ ============ ===========
Net assets 11,747 12,082 11,523
===================================== ==== ============ ============ ===========
Equity
Share capital 522 522 522
Share premium account 4,696 4,696 4,696
Merger Reserve 413 413 413
Own shares (818) (597) (818)
Translation reserve 1,151 1,507 1,038
Share option reserve 2,575 2,256 2,358
Retained earnings 3,208 3,285 3,314
===================================== ==== ============ ============ ===========
Total equity 11,747 12,082 11,523
===================================== ==== ============ ============ ===========
(1) The balance sheet at 31 July 2017 has been restated following the adjustments made in respect of the accounting issue set out in the Annual Report and Accounts for 2018. This had the effect of reducing net assets and equity by GBP4.0m. Please refer to note 1 for further details. It has not been restated for the introduction of IFRS15 Revenue from Contracts with Customers.
(2) The balance sheet at 31 January 2018 has been restated following the modification of the amounts of identifiable assets and liabilities assumed since the provisional amounts included in the 2018 Financial Statements. Please see note 8 for further details.
It has not been restated for the introduction of IFRS15 Revenue from Contracts with Customers.
Consolidated statement of cash flows
for the half year ended 31 July 2018
Half Half Year
year year ended
31 January
ended ended 2018
31 July 31 July (audited)
2018 2017
(unaudited) (unaudited) GBP'000
Note GBP'000 GBP'000
================================================== ==== ============= ============= ===========
Net cash inflow from operating
activities 8 4,270 10,079 10,243
================================================== ==== ============= ============= ===========
Investing activities
* Interest received 11 2 11
* Purchases of property, plant and equipment (50) (217) (708)
* Purchases of intangible assets (196) (53) (204)
* Acquisition of subsidiaries - - (1,974)
Net cash used in investing
activities (235) (268) (2,875)
================================================== ==== ============= ============= ===========
Financing activities
* Dividends paid (1,979) (1,869) (2,752)
* Proceeds on exercise of share options - 1 269
* Purchase of own shares (500)
* New bank loans raised - 2,872 -
* Repayment of borrowings - (2,872) (457)
================================================== ==== ============= ============= ===========
Net cash used in financing
activities (1,979) (1,868) (3,440)
================================================== ==== ============= ============= ===========
Net increase in cash and cash
equivalents 2,056 7,943 3,928
Opening cash and cash equivalents 23,193 19,795 19,795
Effect of foreign exchange
rate changes 234 1,081 (530)
================================================== ==== ============= ============= ===========
Closing cash and cash equivalents 25,483 28,819 23,193
================================================== ==== ============= ============= ===========
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:
31 January
2018
31 July (audited)
2018 31 July GBP'000
2017
(unaudited) (unaudited)
GBP'000 GBP'000
===================================== ============ ============= ==========
JetCard cash restricted in its use 12,590 10,977 5,203
JetCard cash unrestricted in its use 3,657 4,394 10,688
===================================== ============ ============= ==========
Total JetCard cash 16,247 15,371 15,891
Non-JetCard cash 9,236 13,448 7,302
===================================== ============ ============= ==========
Cash and cash equivalents 25,483 28,819 23,193
===================================== ============ ============= ==========
1 GENERAL INFORMATION, BASIS OF PREPARATION AND ACCOUNTING POLICIES
General information
The Directors of Air Partner plc present their interim report and the unaudited condensed consolidated financial statements for the six months ended 31 July 2018.
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.
The Interim Financial Statements have been reviewed, but not audited, by Deloitte LLP and were approved by the Board of Directors on 24 October 2018.
The information for the six months ended 31 July 2018 does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. The Interim Financial Statements should be read in conjunction with the Annual Report and Financial Statements, for the year ended 31 January 2018, which were prepared in accordance with European Union endorsed International Financial Reporting Standards ("IFRS") and those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The Annual Report and Financial Statements for the year ended 31 January 2018 were approved by the Board of Directors on 11 June 2018 and delivered to the Registrar of Companies. The auditor's report on those financial statements was qualified; please refer to the Independent Auditor's Report to the members of Air Partner Plc in the Annual Report and Accounts 2018.
Basis of preparation
This condensed financial information for the half year ended 31 July 2018 has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority and International Accounting Standard ("IAS") 34 "Interim Financial Reporting" as adopted by the European Union. These interim condensed financial statements are unaudited and should be read in conjunction with the annual financial statements for the year ended 31 January 2018.
As reported in the financial statements for the year ended 31 January 2018 an accounting issue was identified which gave rise to a change in the prior years' earnings results and all the consolidated statements of financial position dating back to the year ended 31 July 2011. The cost of the review is disclosed in note 3.
The company has had to estimate in which historical accounting periods the GBP4.4m (GBP4.0m net of tax) accounting issue arose between years ended 31 July 2011 and 31 January 2018 as accurate prior accounting records could not be recreated. Of the GBP4.4m identified, GBP0.9m is a known issue relating to the year ended 31 July 2011.
The directors have spread the accounting error of GBP4.4m as follows:
Accounting periods Exceptional Cumulative
item recorded financial
in period effect
GBP'000 GBP'000
============================================= =============== ===========
Years ended 31 July 2011 to 31 January 2016 3,600 3,600
Year ended 31 January 2017 400 4,000
Year ended 31 January 2018 400 4,400
============================================= =============== ===========
In respect of the interim results for the half year ended 31 July 2017 the accounting issue has been assumed not to affect the earnings results for that period, it will however affect the second half of the year to 31 January 2018 by GBP0.4m. In terms of the balance sheet, the accounting issue has given rise to a decrease in net assets of GBP4.0m at both 31 July 2017 and 31 January 2017 (the latter having been restated in the comparatives for the financial statements for the year ended 31 January 2018).
The comparative balance sheet at 31 July 2017 has been restated in this interim report as follows:
Line item description
31 July 31 July
2017 2017
as previously as restated
stated
GBP'000 GBP'000
Trade and other receivables 42,245 42,059
Trade and other payables (4,796) (4,941)
Other liabilities (11,873) (12,905)
Current tax assets 488 568
Deferred income and JetCard deposits (43,827) (46,520)
Net current assets/(liabilities) 6,686 2,709
Net assets 16,059 12,082
JetCard cash unrestricted in its use 7,150 4,394
Non-JetCard cash 13,448 10,692
-------------------------------------- ---------------- --------------
Accounting policies
The accounting policies adopted are consistent with those of the annual financial statements for the year ended 31 January 2018 other than:
As required by the IFRS accounting standards, we have first time adopted IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments from 1 February 2018.
Details of the IFRS 15 and IFRS 9 accounting policies are as follows:
IFRS 15
In the current year, the Group has applied IFRS 15 Revenue from Contracts with Customers. IFRS 15 introduces a 5-step approach to revenue recognition, and replaces IAS 18 Revenue, IAS 11 Construction Contracts and related interpretations. Far more prescriptive guidance has been added in IFRS 15 to deal with specific scenarios.
The effect of initially applying IFRS 15 has been an equal reduction in both trade receivables and deferred income in respect of contracts where a customer has paid Air Partner in advance but the service was not delivered by the balance sheet date. The statement of financial position at 31 July 2018 includes this adjustment. The timing of revenue recognition has not been affected by IFRS15, under which revenue is recognised when a customer obtains control of goods or services in line with identifiable performance obligations, and therefore there has been no effect upon the opening reserves at 31 January 2018 nor on the results for the period to 31 July 2018.
The Group has adopted this standard on the cumulative effect method and so has recognised the cumulative effect of applying the new standard at the beginning of this period with no restatement of comparative periods. IFRS 15 uses the terms 'contract asset' and 'contract liability' to describe what might more commonly be known as 'accrued income' and 'deferred income', however the Standard does not prohibit an entity from using alternative descriptions in the statement of financial position. The Group has not adopted the terminology used in IFRS 15 to describe such balances.
Apart from as described above, the application of IFRS 15 has not had a significant impact on the financial position and financial performance of the Group.
The Group recognises broking revenues at the point of flight departure. The key judgements in relation to revenue recognition is the judgement of whether the Group is acting as principal or agent in transactions with customers. In making its judgement, management considers the detailed terms of sales transactions with customers in order to determine whether the Group is performing as the principal obligor. This assessment determines how revenue is recognised as either principal or agent in accordance with the criteria set out IFRS 15. Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for services provided in the normal course of business, less VAT and other sales-related taxes.
Consulting and Training contract revenues are recognised as the performance obligation is satisfied over time. Customers are usually billed in advance creating a contract liability which is then recognised as the performance obligation is met over a straight-line basis.
IFRS 9
IFRS 9 Financial Instruments sets out requirements for recognising and measuring financial assets, financial liabilities and some contracts to buy or sell non-financial items. This standard replaces IAS 39 Financial Instruments: Recognition and Measurement.
IFRS 9 largely retains the existing requirements in IAS 39 for the classification and measurement of financial liabilities, and the adoption of IFRS 9 has not had a material effect on the Group's accounting policies related to financial instruments.
IFRS 9 eliminates the previous IAS 39 categories for financial assets of held to maturity, loans and receivables and available for sale. Under IFRS 9, on initial recognition, a financial asset is classified at: measured at:
- amortised cost;
- fair value through other comprehensive income (FVTOCI) - debt investment;
- FVTOCI - equity investment; or
- fair value through profit or loss (FVTPL).
The classification of financial assets under IFRS 9 is generally based on the business model in which a financial asset is managed and its contractual cash flow characteristics.
Financial assets are subject to new rules regarding provisions for impairment, however as the Group has minimal financial assets (other than trade debtors), and a history of minimal impairments against these assets, the impact on transition is not material.
The Group has elected to measure loss allowances for trade receivables and contract assets at an amount equal to lifetime Extended Credit Losses.
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 Financial Statements.
Gross transaction value
Gross transaction value (GTV) represents the total value invoiced to clients and is stated exclusive of value added tax.
Other items
The directors believe that the underlying profit and earnings per share measures provide additional useful information for shareholders on the underlying performance of the business. These measures are consistent with how underlying business performance is measured internally. The underlying profit before tax measure is not a recognised profit measure under IFRS and may not be directly comparable with adjusted profit measures used by other companies. The adjustments made to reported profit before tax are to exclude the following:
-- restructuring costs
-- significant and one-off impairment charges and provisions that distort underlying trading
-- costs relating to strategy changes that are not considered normal operating costs of the underlying business
-- acquisition costs
-- amortisation of intangible assets recognised on acquisition
-- acquisition consideration classified as an employee cost under IFRS 3 Business Combinations.
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 future periods.
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 Jets, Private Jets and Freight (comprising Charter) and Consulting & Training. 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 gross transactional value, revenue, assets or 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:
Half year ended 31 July 2018 Commercial Private Consulting Corporate (unaudited) Jets Jets Freight & Training costs Total Continuing operations GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 ============================= ========== ======== ======== =========== ========= ========= Segmental gross profit 8,399 5,438 1,521 2,684 - 18,042 ============================= ========== ======== ======== =========== ========= ========= Underlying operating profit 2,932 1,384 512 452 (981) 4,299 ============================= ========== ======== ======== =========== ========= ========= Other items (see note 3) (173) (1,400) (1,573) ============================= ========== ======== ======== =========== ========= ========= Segment result 2,932 1,384 512 279 (2,381) 2,726 ============================= ========== ======== ======== =========== ========= ========= Finance income 11 Finance expense (103) ============================= ========== ======== ======== =========== ========= ========= Profit before tax 2,634 Tax (761) ============================= ========== ======== ======== =========== ========= ========= Profit after tax 1,873 ============================= ========== ======== ======== =========== ========= ========= Half year ended 31 July 2017 Commercial Private Consulting Corporate (unaudited) Jets Jets Freight & Training costs Total Continuing operations GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 ============================= ========== ======== ======== =========== ========= ========= Segmental gross profit 9,444 5,140 1,073 2,461 - 18,118 ============================= ========== ======== ======== =========== ========= ========= Underlying operating profit 2,736 1,376 577 408 (945) 4,152 ============================= ========== ======== ======== =========== ========= ========= Other items (see note 3) (147) - - (224) - (371) ============================= ========== ======== ======== =========== ========= ========= Segment result 2,589 1,376 577 184 (945) 3,781 ============================= ========== ======== ======== =========== ========= ========= Finance income 2 Finance expense (104) ============================= ========== ======== ======== =========== ========= ========= Profit before tax 3,679 Tax (1,082) ============================= ========== ======== ======== =========== ========= ========= Profit after tax 2,597 ============================= ========== ======== ======== =========== ========= =========
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.
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 United Kingdom, Europe, the United States of America 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
========================================= ======== ========= =========== ======== =========
Half year ended 31 July 2018 (unaudited)
Gross profit 9,201 5,525 3,162 154 18,042
Non-current assets (excluding deferred
tax assets) 12,696 327 50 1 13,074
========================================= ======== ========= =========== ======== =========
Half year ended 31 July 2017 (unaudited)
Gross profit 9,837 4,633 3,046 602 18,118
Non-current assets (excluding deferred
tax assets) 8,486 1,092 158 3 9,739
Europe can be further analysed as:
France Germany Italy Other Total
Continuing operations GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
========================================= ======== ======== ======== ======== ========
Half year ended 31 July 2018 (unaudited)
Gross profit 2,625 1,300 906 694 5,525
========================================= ======== ======== ======== ======== ========
Half year ended 31 July 2017 (unaudited)
Gross profit 1,772 996 1,215 650 4,633
========================================= ======== ======== ======== ======== ========
3 OTHER ITEMS
Year
ended
Half Half
year year
ended ended 31 January
31 July 31 July
2018 2017 2018
(unaudited) (unaudited) (audited)
Continuing operations GBP'000 GBP'000 GBP'000
Change in Board composition (1) (180) - -
Restructuring costs - (13) (279)
Post year-end accounting review costs (2) (748) - -
Amortisation of intangibles arising on acquisition (173) (152) (277)
Acquisition costs - (174) (368)
Non-cash acquisition related costs - (32) (87)
Abortive acquisition costs (3) (472) - -
(1,573) (371) (1,011)
Tax effect of other items 211 26 218
=================================================== ============ ============ ===========
Other items after taxation (1,362) (345) (793)
=================================================== ============ ============ ===========
(1) Change in Board composition costs relate to the changes in Chief Financial Officer which took place in the period.
(2) The costs of the post year-end accounting review relate to the work carried out to investigate the accounting issue identified in April 2018 and correct the previous periods results. Please refer to the Annual Report and Accounts 2018 for further detail.
(3) The abortive acquisition costs relate to fees incurred in respect of a potential acquisition which had to be abandoned due to the aforementioned accounting review. Please refer to the Annual Report and Accounts 2018 for further detail.
4 DIVIDS
Half Year
Half year year ended
ended ended 31 January
31 July 2018
31 July 2018 2017
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
=============================================== ============== ================== ===========
Amounts recognised as distributions to owners
of the parent company
Final dividend for the year ended 31 January
2018 of 3.8 pence
Final dividend for the year ended 31 January 1,979 - -
2017 of 3.6 pence) - 1,869 1,869
Interim dividend for the year ended 31 January
2018 of 1.7 pence - - 883
----------------------------------------------- -------------- ------------------ -----------
1,979 1,869 2,752
----------------------------------------------- -------------- ------------------ -----------
5 EARNINGS PER SHARE
The calculation of the basic and diluted earnings per share is based on the following data:
Half year Half year Year ended
ended ended 31 January
31 July 31 July
2018 2017 2018
(unaudited) (unaudited) (audited)
Continuing operations GBP'000 GBP'000 GBP'000
============================================ ============ ============ ===========
Earnings for the calculation of basic and
diluted earnings per share
Profit attributable to owners of the parent
company 1,873 2,597 3,580
Adjustment to exclude other items 1,362 345 793
============================================ ============ ============ ===========
Underlying profit attributable to owners of
the parent company 3,235 2,942 4,373
============================================ ============ ============ ===========
Number of shares Number Number Number
============================================== ========== ========== ==========
Weighted average number of ordinary shares
for the calculation of basic earnings per
share 52,217,565 52,687,808 52,217,565
Effect of dilutive potential ordinary shares:
share options 1,937,204 1,133,971 2,076,265
============================================== ========== ========== ==========
Weighted average number of ordinary shares
for the calculation of diluted earnings per
share 54,154,769 53,821,779 54,293,830
============================================== ========== ========== ==========
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 GOODWILL
Restated
(1)
GBP'000
================================================== ========
Cost
At 1 February 2017 3,787
Foreign currency adjustments 73
================================================== ========
At 31 July 2017 3,860
At 1 February 2018 6,753
Foreign currency adjustments 17
================================================== ========
At 31 July 2018 6,770
Provision for impairment
At 1 February 2017, 31 July 2017 and 31 July 2018 -
================================================== ========
Net book value
At 31 July 2018 6,770
================================================== ========
At 31 July 2017 3,860
================================================== ========
At 31 January 2018 6,753
================================================== ========
Goodwill acquired in a business combination is allocated, at acquisition, to the cash generating units (CGUs), or group of units that are expected to benefit from that business combination. Before recognition of impairment losses, the carrying amount of goodwill has been allocated as follows:
31 July 31 July 31 January
2018 2017 2018
(unaudited) (unaudited) (restated)
GBP'000 GBP'000 GBP'000
================================================= ============ =============== ===========
Air Partner International S.A.S. (France) 994 1,015 977
Cabot Aviation Services Limited 787 787 787
Baines Simmons Limited (Training and Consulting) 1,072 1,072 1,072
Baines Simmons Limited (Managed Services) 639 639 639
Clockwork Research Limited 396 347 396
SafeSkys Limited (see (1) below) 2,882 - 2,882
================================================= ============ =============== ===========
6,770 3,860 6,753
================================================= ============ =============== ===========
(1) The provisional amounts recognised in respect of the intangible assets acquired and liabilities in respect of SafeSkys Limited, which was acquired on 1 September 2017, assumed at 31 January 2018 have been revised in these interim statements giving rise to an increase in goodwill of GBP877,000 at both 31 July 2018 and 31 January 2018. More detail is in note 7.
The Group tests goodwill annually for impairment, or more frequently if there are indications that goodwill might be impaired. The directors do not believe that there are any reasonably possible changes to the key assumptions that would result in a material impairment of goodwill.
7 ACQUISITIONS OF SUBSIDIARIES
On 1 September 2017, Air Partner plc acquired 100% of the share capital of SafeSkys Limited, obtaining control of the company on that date. SafeSkys Limited is a leading Air Traffic Control and Environmental Services provider to UK and International Airports. The acquisition of SafeSkys adds significant consulting expertise and knowledge to the Group.
The amounts recognised in respect of the identifiable assets acquired and liabilities assumed have been modified since the provisional amounts included in the 2018 Financial Statements. In particular, the provisions of GBP710,000 relate to two onerous contracts identified in the SafeSkys business as part of the fair value exercise on acquisition. As a result, management is in discussions with the previous owner in relation to warranty claims under the sale and purchase agreement. The revised amounts together with the original provisional amounts are as follows:
Provisional
amounts
Revised used
Amounts at
used at 31
31 July January
2018 2018
(unaudited) (audited)
GBP'000 GBP'000
============================================ ============ ===========
Fair value of net assets acquired
Financial assets 534 632
Property, plant and equipment 87 90
Intangible assets - customer relationships 622 487
Intangible assets - SafeSkys trade name 14 14
Deferred tax liability on intangible assets (140) (113)
Financial liabilities (289) (115)
Provisions (710) -
Goodwill 2,882 2,005
============================================ ============ ===========
Total net assets acquired 3,000 3,000
-------------------------------------------- ------------ -----------
Satisfied by
Cash 2,200 2,200
Deferred consideration 800 800
============================================ ============ ===========
Total consideration 3,000 3,000
-------------------------------------------- ------------ -----------
Net cash outflow arising on acquisition
Cash consideration 2,200 2,200
Less cash and cash equivalents acquired (226) (226)
============================================ ============ ===========
Net cash outflow 1,974 1,974
-------------------------------------------- ------------ -----------
The balance sheet at 31 January 2018 shown as a comparative in this report has been restated for these changes.
8 NET CASH INFLOW FROM OPERATING ACTIVITIES
Year
Half year Half year ended
31
ended ended January
31 July 31 July 2018
2018 2017
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
=========================================== ============ ===================== ===========
Profit for the period 1,873 2,597 3,580
Adjustments for:
Finance income (11) (2) (11)
Finance expense 103 104 138
Income tax expense 761 1,082 1,172
Depreciation and amortisation 459 432 1,129
Fair value gains on derivative financial
instruments (12) (12) 3
Share option cost for period 217 299 341
(Decrease)/Increase in provisions (234) - 120
Foreign exchange differences 276 (1,081) (31)
=========================================== ============ ===================== ===========
Operating cash inflows before movements in
working capital 3,432 3,419 6,441
(Decrease)/increase in receivables (9,321) (13,605) (987)
Increase in payables 10,435 21,100 6,333
=========================================== ============ ===================== ===========
Cash generated from operations 4,546 10,914 11,787
Income taxes paid (173) (731) (1,406)
Interest paid (103) (104) (138)
=========================================== ============ ===================== ===========
Net cash inflow from operating activities 4,270 10,079 10,243
=========================================== ============ ===================== ===========
9 TAXATION
Total
==== =================== ==========================
Half year Half year Year ended
ended ended 31 January
31 July
31 July 2018 2017 2018
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
=================================== === ==== ============== ============ ============
Current tax:
UK corporation tax 236 925 1,086
Foreign tax 551 157 163
Current tax adjustments in respect
of prior years (UK) - (60)
787 1,082 1,189
Deferred tax (26) 26 (17)
============================================== ============== ============ ============
Total tax 761 1,108 1,172
============================================== ============== ============ ============
Of which:
Tax on underlying profit 972 1,108 1,390
Tax on other items (see note 3) (211) (26) (218)
============================================== ============== ============ ============
761 1,082 1,172
==== ============== ============ ============
INDEPENT REVIEW REPORT TO AIR PARTNER PLC
We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 July 2018 which comprises the income statement, the statement of financial position, the statement of changes in equity, the cash flow statement and related notes 1 to 9. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Financial Reporting Council. Our work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
Scope of review
Except as described in the following section, we conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Financial Reporting Council for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Basis for qualified conclusion
The Company has provided disclosure of an accounting issue which arose in accounting periods dating back at least as far as the year ended 31 July 2011 in the financial statements for the year ended 31 January 2018. Specifically:
-- Certain inappropriate financial journals had been deliberately processed without effective review
-- These journals had been used to conceal accounting issues including unreconciled balance sheet accounts and recoverability issues on a major account
-- In certain cases, supporting accounting records were inappropriately created and manipulated in order to avoid detection of the accounting issues; and it has not been possible to reproduce all original supporting documents at given points in time
Due to limitations in the Company's ability to recreate historical accounting records, in respect of GBP3.4m of the accumulated GBP4.4m overstatement of net assets, the directors of the Company were unable to identify which accounting periods and line items this adjustment related to. As a result, the directors apportioned the income statement impact of the adjustment beginning in the accounting period 31 July 2011. This has resulted in an exceptional expense of GBP0.3m net of tax for the year ended 31 January 2018 (no adjustment was apportioned for the 6 months ended 31 July 2017) together with an adjustment of GBP4.0m to opening retained earnings as at 1 February 2017.
We were unable to obtain sufficient, appropriate evidence in respect of the GBP3.4m of the total adjustment described above. Consequently, we were unable to determine whether any adjustments to the above amounts for the periods to 31 July 2017 and 31 January 2018 were necessary.
This relates solely to the allocation of this adjustment across the income statement in the prior years, and the consequential impact on the balance sheet as at 1 February 2017 and 31 July 2017. There is no impact on the balance sheet as at 31 January 2018.
Our audit opinion for the year ended 31 January 2018 was modified accordingly. Our review conclusion on the current period's condensed set of financial statements is also modified because of the possible effect of this matter on the comparability of the current period's figures and the corresponding figures.
Qualified conclusion
Except for the adjustments to the corresponding figures in the condensed set of financial statements that we might have been aware of had it not been for the situation described above, based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 July 2018 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.
Deloitte LLP
Statutory Auditor
Reading, United Kingdom
24 October 2018
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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October 25, 2018 02:01 ET (06:01 GMT)
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