Group charters and freight helped U.K.-based broker and aviation services company Air Partner boost pre-tax earnings by 250% in the first six months of its financial year

– Jet Card sales increase by 50%; U.S. private jet charter outlook positive

U.K.-based Air Partner has ridden a COVID-19 boom in group charters and freight to record profits for the first half of its financial year, according to unaudited results released ahead of the trading day this morning in London.

Mark Briffa, the CEO, said in written comments, “This has been the busiest time we have ever encountered as a business, and this is reflected in our record half-year trading performance.”

He added, “We have always prided ourselves on our ability to provide quick, reliable and effective support to our customers in times of crisis, and we are pleased that we could play an important role during this very challenging time, particularly with regards to emergency evacuations and PPE flying.”

However, the company’s results shouldn’t be seen as any indication for the private aviation sector.

Briffa noted, “Group Charter and Freight have been the standout performers, while other areas, such as Private Jets and some parts of Safety & Security, have been severely impacted by the pandemic, although activity levels in our core business are gradually starting to return. This mixed performance has served to reinforce the importance and value of our diversification strategy, which ensures that we are not reliant on any one revenue stream.”

That said, among the highlights, jet card sales increased by 50% over the previous period.

Air Partner financial highlights

  • Gross profit up £10.5m (61%) to £27.7m due to exceptional levels of trading from COVID-19 related work
  • Underlying profit before tax of £10.5m, a year-on-year increase of £7.5m, driven by strong trading and swift cost-saving measures in the early stages of the pandemic
  • Statutory profit before tax of £8.9m after reorganization costs and amortization of acquired intangibles
  • Basic EPS up 146.3% to 10.1p; underlying§ EPS of 12.8p, up 197.7% on the prior year
  • Net cash (excluding JetCard cash) increased to £18.0m from net debt of £6.9m on 31 January 2020
  • Recommended interim dividend of 0.80p per share (H1 2019: 1.80p)

Strategic highlights

  • Record results as portfolio diversity enable the Group to support COVID-19 evacuations and PPE transportation
  • The successful share placing raised gross proceeds of £7.5m to pay down debt which was used to fund the Redline acquisition (acquired 12 December 2019) and to make further working capital available for organic growth opportunities
  • Entry into the Australian market through Redline contract with ISS Australia and New Zealand

Operational highlights

  • Excellent performance in Group Charter and Freight divisions
  • Extremely difficult trading period for Private Jets and areas of Safety & Security due to COVID-19 impact
  • The number of new JetCards sold up 50% on the prior period
  • Redline secured a number of new business wins with a diverse range of customers

Current trading and outlook:

  • Gross profit for the first two months of Q3 is down year-on-year, although this has been offset by a reduced cost base and governmental support across our various markets, where available
  • Private Jet inquiries continue to increase from the low levels seen in Q2
  • COVID-19 related activity in Group Charter and Freight has now stabilized, albeit against a rapidly changing market environment
  • Visibility in Charter remains limited, however, we are seeing some green shoots of recovery within the Safety & Security division

Additionally, Briffa noted, “We were pleased to be oversubscribed in our fundraising in June 2020, through which we raised £7.5m. This, in addition to the numerous cost-saving measures that we implemented in the early stages of the pandemic, means we entered the second half of the year with no debt and good working capital to invest in new organic growth initiatives. While there is undoubtedly much uncertainty ahead for us all, and our visibility for H2 remains unsurprisingly limited, the Board is confident that the business is well placed to weather the ongoing economic storm and take advantage of any suitable opportunities that arise.”

Air Partner analyst’s view

Assessing the results, Gert Zonneveld, an analyst with Canaccord Genuity said, “So far H2 activity levels in Group Charter and Freight have fallen from those in H1, although spikes in demand may return as a result of dealing with the COVID-19 pandemic. The private jet activity should continue its gradual recovery, especially in the US where corporates and high net worth individuals are looking for commercial aviation alternatives. The challenging environment for S&S is likely to continue for now.”

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