Gama Aviation in freefall after profit warning

Gama Aviation dived on Thursday after stating that it expects the full year underlying operating profits to be $3m below its previous guidance after disappointing fourth-quarter trading.

The aviation services provider said it had received a lower than expected share of its associate's profits in the US, accounting adjustments resulting from a comprehensive balance sheet review process carried out by the new finance team and changes in accounting treatment of certain organic investment costs.

While the first half of the year saw the company incur exceptional costs of $4.5m due to an equity raise, as well as litigation, integration and restructuring costs, further costs were racked up in the second half of the year due to Gama's move to Bournemouth, legal entity reorganisation and diligence costs on potential acquisition opportunities.

A statement from Gama said: "With continuing growth in the US likely to be offset by the challenging market conditions in Europe, and with M&A opportunities yet to be delivered, the company is taking a cautious approach and accordingly expects that the performance for 2019 will be similar to that delivered in 2018."

Gama Aviation's shares were down 23.48% at 88.00p at 0846 GMT.