Hangar 8 Share Discussion Threads

[igoe104] 15/12/2014 08:32

This is certainly one share to tuck under the pillow for a few year`s. especially the way the oil price keeps falling

[rivaldo] 15/12/2014 08:16

Cheers philanderer! It's worth having the full article on the thread for reference.

Great start today, but as I said before this will now be a target for institutional investment as one of the largest players in the world. The price could go to 400p or higher fairly quickly if the obvious rationale of the merger finds approval - which it seems to have done:

"MIDAS SHARE TIPS: Hangar8 and Gama Aviation to merge and fly with private jet set

By Joanne Hart for The Mail on Sunday
Published: 22:02, 13 December 2014 | Updated: 10:51, 14 December 2014

Private jets arouse strong emotions. Tesco’s new chief executive, Dave Lewis, put the group’s fleet of luxury planes up for sale recently, but their very existence seemed to highlight the profligacy of the previous management.

For companies that are not in the public eye, however, and for a growing number of the world’s super-rich, private jets are fast, convenient and infinitely preferable to commercial travel.

AIM-traded Hangar8 has been reaping the benefits of this trend and the shares, now 301½p, are likely to do even better after it merges with privately-owned Gama Aviation in the New Year.

Luxury: The private jet market is poised to grow by 15,000 planes over the next decade

The combined group will be responsible for 144 planes, ranging from small turboprop aircraft to luxury jets replete with dining tables, armchairs and sofa-beds.

These planes operate all over the world, from remote parts of Africa to dense urban centres such as London, Los Angeles and Mumbai.

The business does not own planes but manages them, providing crews, sorting out the best airports for takeoff and landing, ensuring the jets are safe to fly, complying with regulation in the air and on the ground and buying fuel and other necessities.

This is a growing market worldwide but about three-quarters of operators in Europe and America manage five planes or fewer. However, as the regulatory environment becomes increasingly testing and jet-setters want to travel further afield, this cottage industry approach makes less sense.

Hangar8 and Gama are already larger than most but together they will be an even more powerful force, which means they can secure better deals in areas such as fuel costs and landing fees, hire more experienced crews and offer more airports.

The two groups’ customers include international companies, multi-millionaires and even governments. Most of their work involves flying executives around faster and more comfortably than commercial jets would.

However, the companies are also involved in emergency missions, so one customer is NHS Scotland, for whom they transfer ill people from the islands to the mainland. Private planes are also used to fly sick staff from African outposts to mainstream hospitals and governments use them to deliver emergency aid too.

Hangar8 has to date been run by Dustin Dryden, who set up his company in 2002 and floated it in 2010. Gama has been run by Marwan Khalek who founded the business three decades ago. He will be chief executive of the combined group and it will take the name Gama Aviation because Gama is larger. Dryden will be on the board, however, and both men remain significant shareholders. The company will be chaired by Rolls-Royce veteran Sir Ralph Robins.

The private jet market is expected to grow by more than 15,000 planes over the next ten years as those who can afford one turn their backs on conventional air travel. Gama is well positioned to profit. Hangar8 produced profits of £1.98million and sales of £65million in the year to June 2014.

The new group is forecast to deliver sales of £213million and profits of £12.5million in 2015, with further significant growth predicted for 2016. Khalek and Dryden intend to expand the group by gaining market share from smaller players and by acquiring selected rivals too.

The merger of Hangar8 and Gama will complete on January 6 and shareholders in Hangar8 will automatically receive new Gama stock after that.

Midas verdict: The private jet market is growing. Hangar8 and Gama have already proved themselves to be successful in this sector but together they should do even better. Buy Hangar8 shares now and see them morph into Gama in January or buy shares in the new Gama plc once the merger has been officially completed. Either way, the price should rise."

[nashwan123] 15/12/2014 07:59

I agree with Midas that this will be a good investment but am reluctant to top up until the £2.78 shares hit the market in January. The tip should see a rise for today though.

[gargleblaster] 15/12/2014 01:38

cheers Midas - hopefully lift-off on Monday

[philanderer] 15/12/2014 00:38

Here you go riv..


MIDAS SHARE TIPS: Hangar8 and Gama Aviation to merge and fly with private jet set

[rivaldo] 14/12/2014 23:47

Excellent news Loftus16 - bodes well for this week. Will try to find it tomorrow.

[loftus16] 14/12/2014 12:40

Positive piece in the MoS today.

[rivaldo] 14/12/2014 12:11

Cheers gb - "transformational" is the correct word here.

It wouldn't surprise me to see the share price back at 350p and perhaps at new highs as the roadshow for the deal progresses.

[gargleblaster] 13/12/2014 10:13

Our long-standing buy tip Hangar 8 (HGR8) has announced a proposed reverse takeover of the company by larger rival Gama Aviation. The deal puts an £82m price tag on Gama and the enlarged company - which will retain its London listing - will take on Gama Aviation's name and command a market capitalisation of roughly £120m. The deal will include two placings. One will be raise £17m selling 6.1m new shares at 280p apiece and the another plans to raise £5.8m for Hangar 8 chief executive Dustin Dryden, and other Gama Aviation vendors who will be selling 2.1m shares between them.

Marwan Khalek, chief executive of Gama Aviation, said the motivation for the merger was "clear to see". The two businesses operate across similar geographies and have been pursuing "similar growth strategies" over the last few years.

The deal will certainly be transformative for Aim minnow Hangar 8, which currently has a market capitalisation of just £28m. Chief executive Mr Dryden said the company had "achieved much in its short history" but said the enlarged group would be "firmly placed" on "the podium of global private aviation companies".

IC VIEW
The deal will be transformative for Hangar 8 and its shareholders. And the newly-enlarged company will be far bigger than its closest competitor at present, Air Partner (AIR). Shareholders are due to receive further documents ahead of a general meeting in January. Await documents.

Last IC view: Buy, 328p, 7 Nov 2014

[igoe104] 10/12/2014 17:13

Very interesting, not had much time on the forums over the last week with endless work meetings and I`m having a big extension on the side of the house. so I`m on coffee/tea duties.
Im certainly holding these for a good while yet.




The deal comes ahead of a period of rapid anticipated growth in the global and regional business aviation sector. Honeywell Aerospace’s 2014 Global Business Aviation Forecast predicts an average annual growth globally of 4 percent over the next ten years with up to 9,450 new business jets worth a total of $280 billion expected to be delivered up to 2024.

The Middle East Business Aviation Association (MEBAA) forecasts the value of the business aviation industry in the region will reach $1.3 billion by 2020, up more than 150 per cent from current levels

[rivaldo] 10/12/2014 09:49

Interesting background here:



"Gama Aviation plans $200m listing on London Stock Exchange

By Staff Writer Tuesday, 9 December 2014 1:27 PM.

Crescent Enterprises on Tuesday announced that it will convert its equity stake in Gama Aviation, a global business aviation services organisation, into shares in Gama Aviation Plc, after a reverse takeover of Hangar 8 Plc.

Subject to completion in early January, the enlarged public entity will list with an expected market capitalisation £130m ($200m).

The deal comes ahead of a period of rapid anticipated growth in the global and regional business aviation sector. Honeywell Aerospace’s 2014 Global Business Aviation Forecast predicts an average annual growth globally of 4 percent over the next ten years with up to 9,450 new business jets worth a total of $280 billion expected to be delivered up to 2024.

The Middle East Business Aviation Association (MEBAA) forecasts the value of the business aviation industry in the region will reach $1.3 billion by 2020, up more than 150 per cent from current levels.

Crescent Enterprises has been involved with the aviation group since 2006, when Gama Aviation started managing the corporate jets of the Crescent Group. In December 2007, Crescent Investments, the investment division of Crescent Enterprises, invested in Gama Aviation alongside Private Equity partners, Growthgate Capital, and a private investor’s group.

Crescent Enterprises has played an active role in Gama Aviation’s strategic direction through Board and Executive Committee representation. Crescent Enterprises also offers insight and support for Gama Aviation’s operations in the Middle East by providing a regionally focused perspective through the UAE-based firm’s long-standing history and understanding of the region.

Badr Jafar, CEO of Crescent Enterprises, said: “We are proud to have been part of Gama Aviation’s remarkable journey over the past seven years as the company has grown into one of the world’s most successful and respected private aviation operators. As we have seen first-hand in the Middle East, Gama Aviation’s growth potential is unbounded and its merger with Hangar 8 Plc will create the ideal platform for continued future success.”

Marwan Khalek, CEO of Gama Aviation, said: “The two businesses have been pursuing similar growth strategies built on a profitable and robust business model. Bringing them together will create a business of significant scale and one with unparalleled breadth of geographical coverage and depth of capability and service.

“Crescent Enterprises has been an invaluable strategic partner for nearly a decade and has helped Gama Aviation achieve a market leadership position in the Gulf, including its support of the recent opening of our world-class private aviation hub in Sharjah. On behalf of the board of Gama Aviation, I would like to thank all of our loyal shareholders and wish them continued success as shareholders of Gama Aviation Plc.”

Gama Aviation Plc will have 144 aircraft under management, operating from 44 different locations in 15 countries across 5 continents with a strong presence in North America, the UK, Continental Europe, Africa, Middle East, Asia and South America. Its Middle East and North Africa headquarters are in Sharjah, UAE, and in July 2014, Gama Aviation opened a full service private aviation hub at Sharjah International Airport.

Gama Aviation will offer a comprehensive service, operating and supporting aircraft from all major manufacturers and classes of private jet aircraft along with charter, maintenance, engineering design, FBO executive handling, and aviation software services."

[wjccghcc] 09/12/2014 14:23

GAMA does have room for improvement, but the GAMA management are running the new company as far as I can see.

[rivaldo] 09/12/2014 14:12

As the RNS says, this is a "gamechanger" for HGR8 and the industry. It's a chance for UK institutional investors in a new sector global leader.

GAMA certainly has room for improvement. GAMA made $2.2m EBITDA on $80.4m turnover in H1'14, whereas HGR8 made $4.3m EBITDA on $105.6m turnover. The difference is stark. I like the sound of GAMA exiting their owned planes by H1'15's close, which should be a nice cash injection and will reduce risk.

In particular, the merged group have "a high quality, visible earnings stream with 80% of gross margin contracted", and there are also noises about further acquisitions.

In addition, the increased scale should drive down costs and increase opportunities.

[yump] 09/12/2014 08:43

You can have your quiet thread back by the look of it.

[rivaldo] 09/12/2014 07:49

Hi penpont, not yet, but the broker's quick reiterating of their 400p target price is meaningful imo.

A quick read of the numbers yesterday suggested that current year numbers for GAMA produce roughly similar margins to HGR8, so I'm hopeful that with the synergies the combined entity will be earnings-enhancing. I'll look in more detail today.

Above all, as this article suggests, the merger will make HGR8 "one of the five leading operators in business aviation worldwide".

This is now a serious player and will be a draw for institutional investment.

Since HGR8 was already pretty good value given EPS forecasts and the cash pile, I expect the share price to do well from here:



"Hangar 8 and Gama Aviation to merge and become one of the world's top 5Posted 9 December 2014 · Add CommentTwo leading British business aviation companies with interests in the Middle East and Africa, Hangar 8 and Gama Aviation, are to merge.

The new company, to be called Gama Aviation plc, will have a market capitalisation of £120 million (about $188 million) and make it one of the five leading operators in business aviation worldwide.

The merged company will manage 144 aircraft and operate from 44 different locations in 15 countries across five continents. It will have a strong presence in North America, the UK, continental Europe, Africa, Middle East and Asia as well as South America. It will offer a comprehensive service, operating and supporting aircraft from all major manufacturers and all classes of private jet aircraft. Dustin Dryden, Chief Executive of Hangar8 said: "Hangar8 has achieved much in its short history but, in our highly regulated industry, success at all levels is now entirely driven by scale. Today our clients, many with ultra-long range aircraft, require their premier suppliers to be truly global too with the ability to supply a full range of private aviation services across the globe"

etc"

[gorilla36] 09/12/2014 06:48

rivaldo - point taken re new posters, and nobody wants to turn this thread into QPP mark 2 but I for one invested in Hanger8 and Dryden, not some other CEO and some other company. No visibility here, hence no share price increase in the medium term.

[penpont] 08/12/2014 23:52

rivaldo - have you had any more success than me at crunching the numbers involved here to work out if this is going to at least maintain or enhance expected earnings looking forward?

It would be good to see a brokers update or perhaps ST may oblige.

[rivaldo] 08/12/2014 23:17

Intriguing to see all these first time or rare posters suddenly appearing on this previously incredibly quiet thread :o))

[naos] 08/12/2014 21:08

Hi all,

Ben looking at this share for a while, but decided against it based on the lastest RNS.

Despite what the chairman said in the results earlier in the year, I don't buy the growth is coming from "organic" means. If that were so, while are the board still buying up other companies left, right and centre and funding it all with yet more placings? Not a good sign in my book and I'm staying away. Too many red flags here.

DYOR and all that.

[anisha] 08/12/2014 20:27

yumps
thats aim for you
i also was in srg and sold out at 10% loss
after the brillent rns for trading going guns i bought
then the rns to delist off aim very soon after
who would trust the company to give pis a fair share of the proceeds and that after 3 years
with hgr i was in at 275 out at 325 and was looking to get in around the low when the rsi hit bottom but not after today
aim suckse
empire buiding
good luck to all

[cash rich asset poor] 08/12/2014 19:44

I sold out straight after the RNS at 295p. The upside has been largely diluted and while the combined business will be able to make efficiency savings, I'm not sure the investment case is as compelling. It's a real shame as I thought we were nailed on to rise to 500p next year.

[yump] 08/12/2014 19:17

I almost bought in here recently and having read about the business in depth in the various statements, I'm pretty sure there has been not even a hint of needing to merge in a major way with anyone else and no mention of any requirement for 'scale' as part of the strategy.

So in the space of a month, that makes two companies who have issued statements with no clues as to plans which must have been cooking for some time.

The other one was SRG who announced delisting 2 weeks after positive look-what-the-future-holds finals.

Maybe it will all turn out well, but the leakiness and lack of hints is pretty damn close to deliberate deception in my book.

Would dartboard investing actually give a better return ?

I haven't got a clue what to do here now, as it looked a cracking business and as 'usual' its the element of trust that has me in doubt now.

[macarre] 08/12/2014 16:05

I'm out again for now at a small loss. Not keen on uncertainty. Will give some more time until things are more clear.

[rivaldo] 08/12/2014 15:52

Looks like a good move to me at first look.

This will now be a much larger group, with much more interest for institutional investors - and will be much more liquid than HGR8 ever is or was.

Lots of synergies and savings to be had it seems. Not a bad placing price at 280p either. DD has placed around 23% of his shares, but retains the other 77%.

Here's the full document FYI: