Gama Aviation Share Discussion Threads

[garbetklb] 04/4/2024 09:01

Still no more details of the tender. Am tempted to sell now at a small discount & redeploy funds into something with more of a future. Also, just in the unlikely event of something left field appearing.
The comment on 1 March concerning the Board debating which shareholders would approve the delisting struck me as a bit odd.
A bird in the hand, and all that.......

[rivaldo] 04/3/2024 12:31

So the Tender Offer at 95p has been increased such that if all the Tender shares were taken up, MK and Bermesico would own all the remaining shares.

And even if some shareholders don't accept, it's likely that there will be such a small rump of shares left that GMAA will delist. It's essentially a takeover by MK.

Looks like I'll be accepting then!

A better return than I expected a few months ago, but GMAA's been a serial disappointer, so perhaps it's for the best.

[davebowler] 25/2/2024 14:46

hTTps://www.msn.com/en-GB/finance/other/mi-aircraft-company-files-notice-to-appoint-administrators/ar-BB1iQYHf?ocid=sapphireappshare

[rivaldo] 22/2/2024 14:30

An innovative new service from GMAA subsidiary Flyertech, no doubt hoping to get in on the ground floor with new clients:

[rivaldo] 19/2/2024 08:19

Harry, my post 1572 sums it up I think (the 55p special divi has been superceded by a more "phased" return of capital, the tender offer being the first stage).

There's some really interesting coverage of the latest Air Ambulance acquisition here - and the closing comments imply more acquisitions are in view:



Extracts:

"It was a race against time. Gama Aviation had more than 60 separate transaction documents to finalise with a host of stakeholders in just a few hours. All part of its bid to acquire UK air ambulance provider Specialist Aviation Services before the business would be forced to cease operations.

At risk were life-saving air ambulance services over London and the southeast of England. Without a last-minute deal, the emergency medical service (EMS) ambulance helicopters could have been grounded for weeks if not months"

"The acquisition is designed to accelerate the growth of Gama’s Special Mission strategic business unit (SBU) and complements other recent contract wins, including the Welsh Air Ambulance contract. Gama also recently opened new international operations in the Middle East to augment its fixed-wing aircraft management and MRO services in the region."

"“Long-term contracts that give you regular income and regular cash flow for a long time is very welcome,” he said. “Obviously, that’s provided by government work and special missions work as opposed to the ad hoc nature of the rest of business aviation.”

"Netted about $100m

So, what next for Gama Aviation? The company is always open to promising business opportunities, according to Khalek. And, after the sale last autumn of its US MRO business Jet East, it has the means to invest. Gama acquired the business for about $12m and injected up to $20m of debt. It sold the business for $131m and, after costs, netted about $100m.

While non-compete clauses limit Gama’s short-term acquisition strategy in the US, the company remains hungry for new opportunities. “Debt markets are pretty horrible at the moment and pricing is not very nice,” Khalek told our CJI London conference. “So, we’ve taken the opportunity to use our funding to influence budgets more and look to other financing down the line.”

It remains to be seen what, where and when Gama Aviation will be tempted to make its next acquisition."

[harry the haddock] 18/2/2024 16:09

Can someone explain to me in simple English what is happening - are we still getting the 55p a share special dividend for example?

[davebowler] 14/2/2024 17:15

$82m cash.....

[rivaldo] 06/2/2024 12:22

Lots to think about after yesterday's update:

- £16.5m tender offer to buy in shares at 95p worth 27% of the shares in issue
- historic EBIT broadly in line (no idea what expectations are though)
- £82m of net cash at the end of December
- and "a further return to be made when the appropriate debt facilities are secured", so more dosh for shareholders at some point

[oldtimer169] 02/2/2024 10:11

Nice to be part of that story!

[rivaldo] 01/2/2024 07:43

Big news late last night - GMAA are scaling up their helicopter special mission division.

They've paid just £280k to administrators for a forecast £27m of turnover in acquiring Specialist Aviation:



Of course there are added wrinkles. Transaction costs etc will take the total cost to £3m, and there are lease obligations on helicopters and property to take on.

Nevertheless, this could be an absolute bargain price given the likely synergies and cost savings etc, with H2'24 and onwards likely benefiting nicely.

[1activeinvestor] 12/1/2024 14:14

The challenge with Gama is that the company is controlled by the CEO (more than 50% between himself and his friends) and he has a tendency to run the business as if it was his own private company. You can see evidence of this in the frequent churn of CFOs, who try to bring discipline but end up leaving when they fail. Gama could be a great business but it needs a more focus, more financial discipline and an acceptance that it lacks scale to be global.

[rivaldo] 12/1/2024 13:54

Their track record is, erm, mixed at best! But recent moves in terms of the fantastic result from the sale of the US MRO business and the large and long-term contract wins in Air Ambulance/helicopters have been stellar.

With a minimum return to shareholders of 55p per share coming our way, the current share price is probably underpinned.

There hasn't been an updated broker forecast for some time (typical WH Ireland). This will be key as they'll likely be guided by the company as to forecasts for 2024 and beyond, but we may have to wait for the 2023 prelims for those.

With a much more simplified business one might hope that management's attention will turn to fixing those margins and achieving decent profitability.

[eezymunny] 12/1/2024 12:46

All very well the 10% margin, but the proof will be in the pudding and it's very far from baked in. The thing they might be buying has been heavily loss-making (see companies house).

They seem addicted, historically, to revenue, and less interested in margins. And where is the cash return? I fear it won't come and will be splurged on more poor acquisitions.

Sold a few recently and still holding some, but this lot make me very nervous...

[rivaldo] 12/1/2024 12:02

Interesting new analysis....



Extracts:

"Quite honestly, I’m flabbergasted by the RemainCo’s incredibly low valuation. As I already mentioned, this is a business that in FY 2022 had sales of ~$167 million! Furthermore, I’m expecting the new strategy to deliver growing Operating Margins that will eventually reach ~10%. An assumption that values the entire company at less than 2 times Operating Profit - an exceptionally cheap price!"

"Ultimately, given the low price and the strong balance sheet, I think this is one of the best investment setups I’ve seen for a long time. As such, I’m really looking forward to following the company’s recovery into 2024 and beyond."

[fiscal cliff] 08/1/2024 16:03

Rise didn't hold. Buy the rumour?

[rivaldo] 08/1/2024 12:16

News that GMAA are in discussions with "a UK-based provider of helicopter emergency medical services ("HEMS") and aircraft repairs and maintenance services ("MRO".

This quite a major acquisition coming with £24m of revenues, and would be nicely complementary to its existing air ambulance etc services:

[camerongd53] 05/1/2024 11:18

Gama seem to be sitting on the distribution of approx. 55pence per share.
Can anybody do an update on Progress.

[rivaldo] 22/12/2023 07:24

Good news - the £65m Welsh Air Ambulance contract has started earlier than expected (and should therefore help with this year's figures):

[liam1om] 02/11/2023 16:35

They havent set a date, but stated shortly after the vote. So I'd read that as within the next few weeks.

I'm still looking for an additional 20+p plus here when it goes through.

[liam1om] 02/11/2023 16:35

Via a special dividend. Vote is tomorrow, which is already decided with 51% agreeing already.

[harry the haddock] 02/11/2023 13:46

how will the money be returned and when will see the proceeds?

[wjccghcc] 19/10/2023 18:55

Yes, to work out free cashflow, I either add leases to debt and use the company's operating cashflow figure (adjusted for working capital) less capex, or ignore the leases and deduct the lease payments from the operating cashflow figure.

[pireric] 18/10/2023 22:45

For me, the judgement call on leases is whether there is a material risk a big share of them can go onerous / not coverable by operating cash flows.

For a company like Next, am I realistically worried? No. It's just a cost of running the business, so look at net debt/cash on a pre-lease basis

For a barely profitable restaurant chain... then I would be more worried and want to think of it as a liability that may not be fundable out of operating cash flows and a number that should go into an EV

I am not too sure what to make of GMAAs leases as I am not too familiar which side of that argument they should fall into

Eric

[wjccghcc] 18/10/2023 21:01

Fair enough Eezy. I tend to be on the conservative side and lump leases in with debt as they are an obligation to pay. It's also easier in that many companies don't split out lease payments in the cashflow statement.