Air Partner, a global aviation services group headquartered in the UK, has published a shareholder update, announcing underlying profit before tax of no less than £11.5 million for the year ended 31 January 2021 (FY 2020: £4.2m).
Air Partner reports it has enjoyed a strong financial year to 31 January 2021, driven by “exceptional levels of Covid-19 related activity” in its group charter and freight divisions, most notably evacuations and the transportation of PPE. Conversely, its private jet and safety & security activities were negatively impacted by government restrictions and airport closures introduced globally as a response to the pandemic. Performance was mixed across geographies, with the US being the standout performer, according to the company.
During the first half of 2020, the Group implemented cost-cutting initiatives and successfully completed a share placing, raising gross proceeds of £7.5m. These actions strengthened the business ahead of further Covid-19 uncertainty and lower trading levels, as demand for evacuations and PPE flying decreased. However, after the half year point, the Group did see “tentative” signs of recovery in safety & security and a rise in enquiries for private jets, particularly in the USA.
Asset purchase of CHS Engineering
At the end of 2020, Air Partner acquired the trading assets of CHS Engineering Ltd (CHS) after the business went into administration. CHS offers consultancy services for airports and logistics operations, remote condition monitoring and baggage system testing, and these services will now be incorporated into Air Partner’s Managed Services offering and trade as Air Partner CHS. Air Partner regards this as a small acquisition that will add to its customer offering, but which is not expected to be profit enhancing until the second half of the year when airports remobilise post lockdown.
As at 31 January 2021, the Group has no debt and cash in the bank of £9.9m. Excluding significant customer deposits and JetCard cash, normalised cash was £8.3m. The Group has access to a total debt facility of £14.5m, comprising of a £1.5m overdraft and a £13.0m revolving credit facility (RCF), which remain undrawn. The RCF is due to expire in February 2023.
Current trading and outlook
“The Group has made a profitable start to the year, although clearly lower than the exceptional earlier months we experienced in our last financial year as a result of pandemic-related activity,” said Air Partner in a statement. “Encouragingly, the US business remains buoyant across all product lines, and performance in our global Group Charter and Freight divisions continues to improve and track towards management’s expectations. However, Private Jets in the UK and Europe remains impacted by travel restrictions and quarantine measures. In the Safety & Security division, Security has started to show signs of recovery as airports start to build towards increased passenger numbers over the summer, but the pandemic continues to obscure visibility for Safety.”
The Air Partner board’s current base-case expectation for FY22 is to deliver profits in line with the financial year ended 31 January 2020, despite the continued global restrictions on passenger movements.
“The global charter business has consistently been a volatile industry, with low visibility, and we are seeing that now more than ever. However, we have a strong balance sheet and are well placed to benefit from the eventual re-opening of the travel industry across both our Charter and Safety & Security divisions,” added the company statement. “We have a strong portfolio of global aviation services, with diverse exposure to sectors and geographies, and we expect to continue to see a growing contribution from markets outside the UK and Europe, particularly the US. A further update will be provided with our full year results.”