Gama Aviation Share Discussion Threads

[rivaldo] 07/10/2016 10:17

Cheers igoe104, good article. The current share price is bonkers imho :o))

[igoe104] 07/10/2016 08:24

Gama Aviation Set to Double in Size over the Next Two Years.

Gama Aviation has told investors that it will double the size of its business in the next two years. The global business aviation company announced the target as it realised strong interim results for the first six months of 2016.
Revenue rose 13.3% to $209.8 million giving Gama Aviation an adjusted profit before tax of $9.6 million.
Gama now manages 153 aircraft – up from 139 in June 2015. The company had a gross profit margin of 13.3%. This was down 3% from June 2015 because most of the growth came from lower margin aircraft operations – including Gama’s contract with Wheels Up.
“We have delivered a solid set of results in challenging markets, demonstrating our business model and the benefits of our geographic diversity” said Marwan Khalek, CEO of Gama Aviation. “We are on track to grow our business in a fragmented market and will double the scale of the business within two years.”
Gama will need to acquire some other business to do this, but Khalek stresses that the company will only invest if companies add to shareholder value. “We have no interest in just making acquisitions for the sake of acquiring things,” says Khalek. “We will only buy at the right price, where there is a strategic fit and where putting one plus one together creates more than two. We are not obsessed with scale for the sake of it.”
Gama grew strongly in the US in the sixth months up to June 30. Sales for the aircraft operating business rose to $109.8 thousand – up from $76.2 thousand in the same six months of 2015. Gama managed 105 aircraft at the end of June 2016 in the US – compared with 78 aircraft in June 2015. It will add at least another 30 Wheels Up aircraft by the end of 2018. The air business had an adjusted EBITDA of 2.4%. The company now has nine maintenance bases in the US, with ground revenues flat at $6.1 million, but with a 16.2% EBITDA.
“Aircraft operations may not give the best yields, but it is important to note that we are making money from them in this market which is different to some of our competitors,” says Khalek. “Air is not a loss leader.”
Khalek says that operating aircraft also acts as a shop front for the rest of Gama’s businesses.
European revenues fell 16.5% to $74.2 million because Gama cut several African contracts that were originally agreed by Hangar8. Although these were profitable, they were being managed from Europe and were also taking up a lot of management time. Although revenue was down, the European EBITDA rose 11.7% at adjusted currencies to 1.7%.
Gama’s Middle Eastern business broke even despite a 15.1% fall in aircraft operations. The maintenance business was up 40%. The Asian business now has three aircraft and contributed $8. 5 million in revenues

[rivaldo] 04/10/2016 13:13

Good volumes today, with most of it seemingly sells at 137p being nicely absorbed.

Hopefully this is finally the end of an overhang and the start of the upwards turn!

[roddiemac2] 30/9/2016 09:10

WatsonN,

One of the problems here is that many people dipped their toe in here at double the current price. Your timing looks to be right .

[corrientes] 29/9/2016 16:38

Surely, can only be due to the potential of today's OPEC news which is hardly life threatening. Typical ; a tiny bit of minor bad news and the price drops, but any good news is totally ignored. The feeling that small companies are doomed, carries on a pace.

[watsonnimrod] 29/9/2016 15:54

I'm really confused by this drop in share price. Say what you want about Gama, it's a bloody good operation with an outstanding CEO. They have weathered every storm in the fickle private jet market and have solid contracts. I'm going to dip my toe in here.

[igoe104] 29/9/2016 14:12

Must admit I`m tempted to top up at this level, especially when they are predicting a big improvement in H2, you could think Gama is on its knees by looking at share price and the chart, which certainly isn't the case.

Outlook: Stronger second half performance expected with full year broadly in line with management expectations
·        Strong US trading performance expected to continue in H2
·        EU Air benefitting from cost reductions implemented during the period
·        EU Ground traditionally stronger H2 supported by longer term contracts within a challenging European market
·        Further progress expected in MENA with a promising contract pipeline
·        The Board expects a stronger second half performance and full year results to be broadly in line with management expectations

·        Growth strategy in place to double the scale of the business over the next two years

[rivaldo] 23/9/2016 11:38

Thx for the IC Buy tip paleje. Just looks like a determined seller, exacerbated by stop-losses as roddie says.

Given the illiquidity we know that it could rise as quickly as it's fallen. Let's hope the bounce from today's low continues.

Latest forecasts continue to show forecast EPS of around 27p EPS this year and 29p EPS next year:

2016 2017
Date Rec Pre-tax (£) EPS (p) DPS (p) Pre-tax (£) EPS (p) DPS (p)
W H Ireland Ltd 22-09-16 BUY 12.79 26.11 2.77 14.48 28.81 2.77
Cantor Fitzgerald 19-09-16 HOLD 11.87 27.52 1.97 13.53 29.03 2.04

[roddiemac2] 23/9/2016 10:50

Investors exercising a stop loss probably are exacerbating the fall.Anyone buying early in 2014, when they were Hangar 8, is now losing over 100p .How many investors hang on to a losing share in this scenario ? Europe looks a very unhappy place , and this is what is dragging the shares down. whilst realising the risks, I rather rashly put a fair quantity of these in my ISA. At my age I should have known better.

[scapital] 23/9/2016 09:43

It has been quite difficult as they haven't been offering much stock, but I've been adding this morning. Comfortable holding this for a while.

[paleje] 23/9/2016 09:18

Can't understand the share price dip this week, ST gave them a strong write-up which should be in today's magazine, too early to paste full article but he reiterateed buy with 220p initial target, saying European shortfall is more than compensated by acquisitions and strong US growth, his conclusion:-

" Indeed, analysts expect the company’s net borrowings to decline from $13.2m at the half year stage to $3.8m at the end of the year, so balance sheet gearing could be less than 8 per cent of shareholders funds by the year-end. In turn, this offers scope for the board to at least maintain last year’s dividend of 2.5p a share. It also offers scope for the board to make further strategic acquisitions to scale up the business. The aim is to double its size within the next couple of years. Strategically, that makes a lot of sense as scaling up the fleet size has a positive impact on contract value and ancillary service volumes such as fuel, training and insurance, and gives management greater leverage during negotiations with suppliers.

So, having taken into consideration the profitability of each of Gama’s regional segments, and the trading back drop too, I am comfortable maintaining my buy recommendation and 220p target price with the shares trading on just six times earnings estimates. Buy."

[rivaldo] 21/9/2016 14:29

Cheers scapital. If you (or anyone) could post a copy of the tip that would be appreciated.

[larva] 20/9/2016 15:48

please post

[scapital] 20/9/2016 15:42

Simon Thompson from IC with a 220 target

[corrientes] 20/9/2016 15:10

Reasonable volume now. Minor price movement seems more like MM's playing around with spread. Come on ; where/who are you GMAA ?

[rivaldo] 20/9/2016 15:07

Tipped where scapital? Doesn't seem to be having much effect :o))

[scapital] 20/9/2016 12:31

Been tipped today

[spooky] 20/9/2016 12:14

Buy volume picking up.

[scapital] 20/9/2016 08:35

I've added following the director's buy.

[rivaldo] 19/9/2016 15:39

RNS - director buying. Good to see the very highly respected Nigel Payne buying £25,000 of GMAA stock at 165p:

[twirl] 19/9/2016 11:25

The market had the trading statement 2 months ago and the H1 EBITDA announced today is exactly as forecast at $7.5m. Turnover on a constant currency basis rose by 16.3% cf the trading statement minimum of 7.3%.

The market did not react particularly positively to the trading statement and the recent rise has been presumably in anticipation of better EBITDA and more positive outlook.

So presumably the pre results buyers are now selling and we return to where we were before.

I don't think the Board do enough to promote the share to investors and bearing in mind the size of their holding expect they will take it private if it stays sub 200p much longer. IMHO

[rivaldo] 19/9/2016 10:53

Volumes are tiny, so it seems more related to illiquidity and perhaps small traders taking profits after the recent price rise than anything else.

Indeed paleje - consensus forecast is 25.93p EPS, which is why I assumed 24p-25p EPS this year, for now anyway.

Cantor Fitzgerald have retained their 200p target this morning.

[roddiemac2] 19/9/2016 10:45

Yes, you can`t fight the market. The most obvious risk looks to be Europe, meanwhile the US is more than compensating: doubts persist.