Gama Aviation Share Discussion Threads

[abarclay] 05/11/2019 09:26

does Cantor Fitzgerald still have a 400p target price

[rivaldo] 01/11/2019 10:58

Remember the merger of BBA's and GMAA's US charter and management operations - called Signature - into a 50/50 JV in 2017 to form the largest aircraft management business in the country:



This morning BBA confirmed their disposal of Ortic, their MRO operation, for $1,365 million, to concentrate on Signature.

There are some interesting comments:

"Following completion of the Ontic disposal and given the on-going process to dispose of the ERO business, it is expected that the Group will from that point comprise predominantly the market-leading Signature business. This will enable enhanced focus on Signature, which the Board believes to be a significant source of future shareholder value creation. The Board has therefore elected to change the Company's name to "Signature Aviation plc" which will better align it with the Company's most significant brand in its core market. In addition, it will create a stronger and clearer connection of the brand to shareholders and other stakeholders."

"Signature's free cash generative characteristics should allow it to sustain a progressive dividend policy and the potential for ongoing returns of capital, surplus to the investment requirements of the Signature business, while maintaining a strong balance sheet within the target leverage range on a covenant basis."

[rivaldo] 17/10/2019 15:01

Not used to a blue colour next to GMAA :o))

I did notice good news re GMAA's partner Wheels Up - raising such a large amount for expansion should be good for GMAA (who get a mention here):



"Wheels Up: $128 Million Funding, Over $1.1 Billion Valuation, And 6,000 Members

Wheels Up — a membership-based private aviation company — recently announced it raised $128 million in Class D equity capital. Funds managed by Franklin Templeton co-led the round with funds and accounts advised by T. Rowe Price and Fidelity Management & Research along with other institutional and private investors.

The post-money enterprise valuation of Wheels Up is now more than $1.1 billion. And this round of funding comes on the heels of Wheels Up’s recent acquisition of Travel Management Company, which closed a few months ago.

Wheels Up founder and CEO Kenny Dichter pointed out that this round of funding will be used for a number of business initiatives such as additional potential acquisitions, the acceleration of membership growth through further investment in sales and marketing, and significant scaling of the company’s technology and digital platforms.

Wheels Up significantly reduces the upfront costs to fly privately while providing unparalleled safety, service, flexibility, and quality. And Wheels Up offers a total private aviation solution for its user base of more than 6,000 members across North America through three unique membership options—Connect, Core, and Business—and a vast selection of program features. The Wheels Up Core and Business Members receive guaranteed access to a members-only fleet of 93 King Air 350i, Citation Excel/XLS and Citation X aircraft (operated exclusively by Gama Aviation) up to 365 days a year with as little as 24 hours’ notice and paying fixed hourly rates for time flown only.

etc"

[jeevsje] 23/9/2019 08:48

I wonder whether we will see additional buying from Simon To in coming days.

[rivaldo] 23/9/2019 08:29

H1 results are out, and are pretty reasonable in terms of results and encouraging in terms of outlook, with prior guidance of $10.5m to $11.5m EBIT reiterated, against a now £48m m/cap.

The overriding sense is that this large, sprawling business is being steadied, and that the period of investment and consolidation is starting to coming to an end and beginning to deliver (i.e Bournemouth, US Ground etc).

Cash flows were poor, but these were due to one-offs such as short-term changes to billing procedures and slow recovery of particular receivables.

Interesting comment from the Chairman, suggesting that acquisitions are still on the agenda:

"The Board will continue to oversee the reforms the Company is implementing in terms of corporate governance and financial discipline, whilst supporting the Company's organic and acquisitive growth strategy, with the aim of delivering stronger future shareholder returns."

[rivaldo] 05/9/2019 11:04

We already know that H1 results will be in line with forecast 12.6c EPS for the year.

This report from the business aviation sector in the U.S., Canada and the Caribbean is interesting. We already know that overall the sector was mixed in H1, but it's good to see that GMAA were the market leaders, and business is expected to improve markedly in H2:



"Gama Aviation Signature logged the most hours of the 135 carriers in the first half at 42,020, which was down from the 43,974 in the first half of 2018. The next closest in terms of flight hours was Executive Jet Management at 31,053 hours, followed by XOJet (23,209), Delta Private Jets (20,314), and Solairus Aviation (15,581).

Argus anticipates that business aviation will be up 2 percent year-over-year in the second half, with September and December expected to bring the strongest gains in this period. Argus forecasts a 4.6 percent increase in September and 3.3 percent in December. Bolstering this is that returns for July surpassed initial expectations of a 1 percent rise; it actually logged a 2.4 percent increase."

[rivaldo] 31/7/2019 10:07

Downing Strategic's quarterly investor letter to 30/6/19 (so issued before the latest in-line trading update) has some interesting reflections on GMAA. This is the conclusion:

"The results themselves, restatements and missed expectations aside, show some promising signs of growth in parts of the Management business (8% fleet growth in US and Europe, and doubling in Asia). The key is really to get scale in these businesses and to see the operational gearing start to come through. It’s a tough market but we think that there is a compelling business opportunity to scale up in Asia particularly, and the Hutchison relationship could help that. Over the long term, we still think consolidation is viable. There have been strategic changes in the Maintenance business, such as moving to Bournemouth and investment in new US facilities, both of which sound like the right long term moves but which bear the restructuring costs and operating cost investment through the P&L in the nearer term.

We think that the Maintenance proposition is a good one, bolstered by some very material special missions’ contracts. Gama has been winning contracts recently – two new ones total over $100 million over the life of the contracts. Elsewhere, cash generation was negatively affected by a large working capital outflow, but
we expect the debtors portion to reverse as debts are collected against a few larger customers. The balance is reflective of investment for growth, particularly inventories in new maintenance locations.

2019 will be a year of transition and rebasing of financials, as clearly some of the reporting practices of the past were not prudent. The half year results should give a better indication of what the business is really capable of, alongside, we hope, confirmation from the new chairman of the strategic plan.

In our view, there remain real opportunities to improve margins and cash generation across the business. M&A activity in the sector remains buoyant and multiples are generous for businesses with scale. This gives us confidence in the strategic value of the group as a fall-back valuation. The de-geared balance sheet and Hutchison’s interest provide comfort while the business transitions."

[rivaldo] 29/7/2019 07:36

There's a pleasant surprise - a nice in-line trading update today, with no alarms/caveats. And the outlook for the full year also shows confidence, being in line with prior guidance.

Forecasts are for 9.85p EPS this year (with a 2.88p dividend).

Baby steps, but perhaps this is now a recovery story.

[rivaldo] 03/7/2019 07:18

Good to see the Chairman buying £110,000 of shares (via a Trust) at 85p:

[rivaldo] 28/6/2019 09:23

Encouraging NED appointment (and H1 trading update will be on 29th July):



And some good news:



"Gama Aviation Signature Teams Up with Windsor Jet
by Kerry Lynch
June 27, 2019, 10:55 AM

Aircraft charter and management company Gama Aviation Signature is extending further into the global heavy jet market through a strategic alliance with Windsor Jet Management. Fort Lauderdale, Florida-based Windsor Jet operates a fleet that ranges from midsize to large-cabin business jets, including several Gulfstreams.

The relationship will provide Gama Aviation Signature with “another competitive advantage for rapid growth and expansion,” while enabling Windsor Jet to leverage its sales and operating capabilities, Gama Aviation Signature said.

“Combining Gama’s quality control standards and level of service with Windsor’s heavy-jet fleet will further enhance our success in delivering the bespoke concierge service all of our clients expect and deserve,” said Gama Aviation Signature president and CEO Tom Connelly. “We anticipate the Windsor aircraft to be in high demand generally, as well as materially contributing to Gama Aviation Signature’s expanding international and coast-to-coast charter operations.”

Windsor Jet CEO Ignacio Martinez added that having access to Gama Aviation Signature’s resources, expertise, and infrastructure will benefit its clientele. “This alliance will enable Windsor to deliver a higher level of service and mutually benefit from new synergies,” he said."

[devonlad] 11/6/2019 14:21

Looks like an inverse head and shoulders on the chart, move above 110p would be interesting.

[rivaldo] 11/6/2019 13:04

....and up nicely again, with buying at almost 100p now.

[rivaldo] 10/6/2019 15:59

This is good to see - and a healthy 340,000 shares traded too.

[rivaldo] 29/5/2019 09:18

The new broom continues to revamp governance, with the appointment of PWC as auditors a definite upgrade on Grant Thornton.

Interesting new article about the Bournemouth expansion:



Extracts:

"Gama plots MRO expansion with new flagship facility
28 May, 2019

Gama Aviation – one of the largest business aviation services providers in the world – has its eyes set on rapid expansion in the maintenance sector, and sees the recent opening of a new flagship facility in Bournemouth, UK as crucial to achieving that ambition.

Formally unveiled on 16 May, the 12,540sq m (135,000sq ft) base at Bournemouth International airport, in southern England, is integrated into Gama's current MRO network, which includes a further 29 facilities worldwide.

"It's another piece of a global network that we are building, such that our clients and third parties have maintenance coverage where and when they require it," says Gama chief marketing officer Duncan Daines.

"Gama puts the total cost of the consolidation and revamp of the Bournemouth site at £1.2 million ($1.5 million), but this outlay is dwarfed by recent awards, from undisclosed customers, of £90 million-worth of long-term support contracts for special-mission aircraft.

The move to the new site has also enabled Gama to enter the airline MRO sector for the first time, with initial deals from British Airways and TUI. "We have a flexible arrangement to provide space in Bournemouth for when these carriers need the extra capacity to maintain or repair their airliners," says McVicar.

Gama is keen to expand that commercial offering and build on its existing business jet and turboprop MRO support operation.

Work in Bournemouth is evenly split between the business aviation and defence/special-mission sectors, with customers including high net-worth individuals, corporations, governments, law enforcement agencies and air ambulance operators."

"Gama offers a broad range of MRO services, including base and line maintenance, aircraft-on-ground support, component overhaul, bespoke design and installation for special-mission and VIP aircraft.

"We are particularly busy at the moment performing ADS-B [automatic dependent surveillance – broadcast] out upgrades, with owners and operators coming to us in increasing numbers as Europe's June 2020 compliance deadline approaches," says McVicar."

[shiv1986] 07/5/2019 08:52

ADVFN is hosting an investor event for a firm within Industrial Transportation; Avation plc, on the 21st May to find out about their future prospects.

Sign up to attend this event:

[rivaldo] 03/5/2019 09:41

Extracts FYI from today's Downing Microcap Investment Trust results RNS:

"Simon To of Gama has a big job ahead of him. He promises appropriate governance, controls and integrity - attributes that the board has been desperately lacking given the calamitous last 12 months. We lend him support in the challenges that inevitably lie ahead for Gama, as it begins its recovery."

"Progress against investment case

Post the fundraise last year, the business has hit several stumbling blocks. Capital has not been deployed as expected and the appointment of a strong new FD has uncovered some questionable financial reporting practices. Unfortunately, we underestimated the ability of the board to impose the expected checks and balances on a business of this size and complexity.

Despite the disappointing governance, the business does continue to perform respectably well which demonstrates the viability of the model. In December, the company announced that between £93.5 million and £115.5 million of contracts had been awarded to support special missions' operations.

We have confidence that with the correct governance in place this is a viable business which can be turned around and generate a healthy return for our investors. We are working hard to ensure that an equitable governance structure is put in place that will represent all minority shareholders."

[multibagger] 02/5/2019 13:29

GMAA has more problems than Boeings ill fated MCAS - the nose is pointed firmly downwards (from a private investor perspective).

Good that I woke to the jam tomorrow and bs from the management team a few years ago and bailed out completely.

[rivaldo] 02/5/2019 07:24

Hutchison have bought a further 1.16m shares, and are up to 29.79% with 18.95m shares:



Now it's up to Hutchison via both the Chairman and FD to ensure that this globally sector leading company fulfils its potential, and that MK is kept under control with no further mishaps.

[horndean eagle] 01/5/2019 19:26

The FD was a no nonsense guy. He wasn't going to take any of Marwan's bs and I think he has been forced out because of that. I am not sure I would take him leaving as a positive. Especially when Marwan has been cooking the books for years.

[dangersimpson2] 01/5/2019 13:20

I know downing take the long-term view but losing and FD in less than a year, after he found accounting issues, suggests that there could be significant turbulence on route!

[rivaldo] 01/5/2019 12:18

I understand the point re the FD, but the handover is amicable, and the new FD has an impressive track record and is obviously a trusted and long-standing colleague of the new Hutchison-appointee Chairman.

Given that Hutchison now own nearly a third of GMAA it makes sense, especially as DS seems now to have identified all the main issues arising from the previous regime.

I doubt whether Hutchison will bid to take GMAA out - I suspect all this is more to prevent a low-ball bid from someone else.

Downing's reaction will be interesting, but given that it has to be good news that Hutchison are so committed to GMAA's future, then I believe they'll be happy to go along for the ride. Besides, they only own 7% from memory compared to Hutchison's almost-28%.

[dangersimpson2] 01/5/2019 10:43

well getting rid of your finance director after less than a year should help loosen a few hands. Particularly after he took them to task for what appear to be prior lax financial controls, auditors seem to have pulled them up on what can be considered one-off costs, and they found overpayments from subsidiaries that appear to have historically flattered the balance sheet at a time they were raising money from the market.

My understanding is that the CFO was put in place by Downing as part of their strategic actions to turn the company around. If I were them I would be spitting feathers at this change. Especially as they supported them during recent capital raises, etc.

The market price hasn't reacted as Hutchison clearly appear to be still bidding in the market, but when they reach 30% they won't be able to support the price anymore, barring a takeover. If they launch a takeover I doubt it will be generous given their now effective control of the board. So this now appears to have a small upside, large downside to me, and I am happy to have sold out to Hutchison in the market.

[rivaldo] 30/4/2019 15:44

Hutchison Capital have bought again, this time another 1.6m shares to take them up to almost 28%......so another 2% for them to find:

[a1mi1nvestor] 29/4/2019 11:02

Ok, Chief. The offer's there.... ;)