Gama Aviation benefits from geographic diversity in first half
Gama Aviaton, an AIM-listed aviation services provider, has been able to offset weak European market conditions by diversifying around the globe.
The firm, which operates across Europe, the US, the Middle East, Asia and Africa, services are split into two areas: Air and Ground. The Air operations include aircraft management, special mission and charters, while Ground services cover maintenance services, fixed base operator (FBO) operations and modification services.
The group’s revenue rose 13.2% from $185.3m to $209.8m in the first half. Majority of this rise was from its US operation where revenue rose 40.8% to $116m.
In Europe revenues fell by 16.5% to $74.2m and the Middle East and North Africa region (MENA) also fell from 9.2% to $10.8m.
Gross profit fell by 7.9% to $27.9m and the margin fell by three percentage points to 13.3%. The firm said this was due to majority of the revenues coming from lower margin Air services.
Adjusted earnings before interest and tax depreciation and amortisation (BIA) fell by 8.5% to $7.5m. Adjusted profit before tax rose 62.7% to $9.6m due to a material foreign exchange credit of $4.6m.
Chief executive Marwan Khalek said: "The fundamental strength of our business, which is underpinned by contracted revenues and geographical diversity have ensured that once again we have delivered a solid performance, despite the challenging conditions that we continue to experience in our European market.”
The number of aircraft under management rose 10% to 153. The firm plans to expand the business over the next two years through organic growth and further acquisitions.
The firm expect the second half to be “stronger” to meet its full year expectations. The firm expects growth in the US market to continue, EU Air to benefit from cost reductions and EU Ground to get stronger with the support of longer term contracts and further progress within MENA due to a promising contract pipeline.
“Organic growth will continue apace through the expansion of services and geographies and we have a clearly defined path to continue our acquisitive growth in a highly fragmented global business aviation services sector" said Khalek.
Adjusted earnings per share (EPS) rose 57.6% to $19.7m. The share price fell by 10.25% to 162p at 1428 BST on Monday.