Gama Aviation soars despite gloomy outlook on 'challenging' 2019

Gama Aviation shares climbed on Wednesday after the firm reported higher full-year revenue, despite describing the year as "disappointing" and taking a cautious stance on its outlook amid "challenging" European market conditions.

The global business aviation outfit reported revenue of $234.8m for 2018, an increase of 13% compared to the year before, though the AIM-traded company swung from a profit before tax from continuing operations of $15.7m to a loss of $30.8m as administrative expenses leapt by 140% to $77.0m.

Ground revenues organically increased by 10% and Air increased by 17%, reflecting the contribution of the acquisition of the outstanding 50% of the joint venture interest of Gama Aviation Hutchison Holdings and success from the US Ground and Asia Air businesses.

Meanwhile, the jump in administrative expenses was fuelled by an impairment loss of $27.7m relating to the merger between Hangar8 and Gama Aviation back in 2015.

Chief executive Marwan Khalek said: "While 2018 was a disappointing year in terms of financial performance, it was also a year of transition and change that provides Gama with a solid basis for the future."

Meanwhile, Gama warned that it expects more challenging market conditions in Europe, particularly with the continuing uncertainties over Brexit and foreign exchange volatility, while growth in the Middle East and Asia was expected to be "modest".

"Given the mixed market conditions, the board is taking a cautious approach to its 2019 outlook and accordingly expects the financial performance of the group to deliver an adjusted EBIT in the range of $10.5m to $11.5m," the company said.

Gama Aviation's shares were up 7.55% at 74.75p at 0957 BST.