Gama Aviation Live Discussion

gretel 23 Apr 2018

CEO comments - lots to look forward to Comments from the CEO on Asian growth and on the results:[link] Eyes Greater China Progress From Hong Kong Baseby Ian SheppardApril 15, 2018, 90 PMGama Aviation (Booth H1514) has reported another strong year of growth as the business aviation specialist’s operations in the U.S., Asia, and the Middle East all ticked up, with the U.S. performing the strongest. In Asia, Gama Aviation acquired Hutchison Whampoa’s 50 percent stake of its Hong Kong-based joint venture, with Hutchison instead becoming a strategic investor in the Gama Aviation group by taking a 20 percent stake.The group itself now also holds a 20 percent stake in Hong Kong Chek Lap Kok International Airport-based MRO provider CASL. “We’re very well placed in the Asia market,” co-founder and CEO Marwan Khalek told AIN. “We’ve decided to use Hong Kong as our main base while in a holding pattern waiting to see what happens in Mainland China.”In the Middle East, revenue grew by 20.5 percent, to $23.5 million, and the division was “profitable for the first time,” returning $0.5 million. In October, Gama Aviation bought out the Jet Set’s 51 percent stake in its Middle East ground division as part of its “planned development in the region.”After the company’s 2017 results were released on March 19, Khalek said Gama is looking to bolster its European operations and become less UK-centric. The company, which is currently listed on the UK’s Alternative Investment Market (AIM), recorded 2017 revenues of $207.4 million, up 5.8 percent, with underlying profit of $18.7 million. It has now laid the foundation for the next steps of development and growth, raising £48 million (approximately $67 million) in February. Of this, $10 million has been earmarked for investment in two maintenance facilities in the U.S. (one on the East Coast and one on the West); $10 million for developing its Sharjah, UAE business aviation center; and the rest for “acquisitions in the Europe air and ground divisions and the Middle East air division.” Khalek said the European division “Needs scale and needs to be more European.”In the U.S., the new division created through the merger of its U.S. operations with the BBA aircraft management business (Landmark), rebranded as Gama Aviation Signature, in which Gama Aviation has a 24.5 percent stake, saw “significant growth” resulting in its U.S. air-related activities increasing in revenue by 35 percent, to $518 million. This was also fueled by the “continued growth of our Wheels Up contract,” said the company. It added, “The integration of the BBA business is delivering the envisaged benefits: adding complementary West Coast coverage to the existing East Coast business, diversifying the client base, providing the ability to cross-sell maintenance services into Gama Aviation’s wholly owned U.S. ground business, and delivering cost synergies.”

Aberdeen_investor 20 Apr 2018

Re: Looking very cheap imho agree, it does look cheap at the momentUnfortunately for me, I am awaiting some funds.Will buy in, hopefully in May/June time

gretel 11 Apr 2018

Re: Looking very cheap imho Bouncing today after a ridiculous fall over the last few days.The only reason I can see for this crazy markdown is a supposed commonality with AIR in the same sector, given that AIR has lost 40% of its m/cap after a dodgy RNS . Which is ridiculous, as AIR are largely dependent on charter revenues and have had internal accounting problems, whilst GMAA have high recurring and non-discretionary revenues and much lower cyclical charter revenues. Plus piggybacking on the likes of Wheels Up for growth.C'est la vie - that's what makes a market. I assume some PIs have also been stopped out by now, thus exacerbating the fall.GMAA can rise just as quickly as it falls. With stable markets it should return to 250p-260p as quickly as it fell.The results just out on 19th March had a very confident outlook:[link] on our performance to date and contract visibility, the Board is confident in the strength of the Group's operations and believes the Group is well placed to deliver its strategic objectives and achieve its expectations for the current year."

gretel 04 Apr 2018

Looking very cheap imho Given that GMAA are now on a current year P/E barely above 10 - even before the likely acquisitions coming this year - I continue to believe there's substantial upside.Next month's trading update will hopefully reflect the positive outlook from the results:"OutlookBased on our performance to date and contract visibility, the Board is confident in the strength of the Group's operations and believes the Group is well placed to deliver its strategic objectives and achieve its expectations for the current year."

gretel 22 Mar 2018

Just tipped in the IC Here's Simon Thompson's full tip for GMAA - "priced on 12.5 times this year’s likely earnings, dropping to only nine times 2019 EPS estimates" says it all, and that's before any likely earnings-enhancing acquisitions:"Gama cashed up for bolt-on dealsI had an informative results call with Marwan Khalek, chief executive of Aim-traded Gama Aviation (GMAA:257p), an operator of privately-owned jet aircraft and one that has just delivered a near 25 per cent uplift in full-year underlying pre-tax profit to $17.1m (£12.2m) on revenue (including associates) up by 38 per cent to $615m.The performance was fuelled by 66 per cent growth in revenue to $388m in its buoyant US air operation, which is reaping the benefits of the fleet joint venture with BBA Aviation (BBA) and delivered a 50 per cent plus hike in operating profit to $9.1m. There should be more upside to come as the US air business “exploits organic market growth and focuses on leveraging the inbuilt opportunity [from the JV]”, one reason why Gama invested heavily in its sales force in the final quarter of 2017, the benefits from which will be seen this year. Divisional operating margins of 2.4 per cent are half Mr Kwalek’s target of 5 per cent and he sees scope for a “one percentage point improvement each year”. That’s worth noting.As anticipated, a much better margin improvement on the back of cost savings and exiting legacy contracts meant that Gama’s European air division more than doubled operating profit to $4.5m on revenue of $91.8m. The European ground division delivered decent growth, too. Interestingly, Mr Kwalek sees scope to make accretive bolt-on acquisitions for both European businesses and, with $22m funds available from a recent £48m placing, the board has firepower to do so.Importantly, shareholders are reaping the benefits of almost $14m of free cash flow generated last year as the dividend per share was hiked by almost 6 per cent to 2.75p. Moreover, expect the progressive payout policy to continue as analysts at brokerage WH Ireland predict a 27 per cent increase in Gama’s pre-tax profit to $21.8m this year, rising to $33.1m in 2019. The hefty profit increase reflects both organic growth and contributions from investments made using the placing proceeds which I outlined last month when the shares were around the current level (‘Running the slide rule’, 19 Feb 2018).Gama’s shares are priced on 12.5 times this year’s likely earnings, dropping to only nine times 2019 EPS estimates, a rating out of sync with the anticipated earnings growth and I maintain my 325p target price. Buy."

gretel 20 Mar 2018

Good results summary, new CEO comments Good summary of the results, with some interesting new comments from the CEO:[link] Aviation Releases 2017 Results, Underlying Profits Up 28%by Ian SheppardMarch 19, 2018, 9:49 AMGama Aviation experienced a strong year of growth in 2017 as the business aviation specialist’s operations in the U.S., Asia, and the Middle East all ticked up. The U.S. performed the strongest, partly on the back of its contract with Wheels Up (which now has 12 bases) and the Gama Aviation Signature joint venture, which was created on Jan.1, 2017. While profit in Europe proved elusive in the year, the group is looking to bolster that side of its business and become less UK-centric, co-founder and CEO Marwan Khalek told AIN.Of the £48 million (around $67 million) raised in an equity placing last month, $10 million has been earmarked for investment in two maintenance facilities in the U.S. (one on the East Coast and one on the West); $10 million for developing its Sharjah, UAE business aviation center; and the rest for “acquisitions in the Europe air and ground divisions and the Middle East air division.” Khalek said the European division “needs scale and needs to be more European.”The company, which is listed on the UK’s Alternative Investment Market, recorded 2017 revenues of $207.4 million, up 5.8 percent, with underlying profit of $18.7 million. In the U.S. the new division created through the merger of its U.S. operations with the BBA aircraft management business (Landmark), rebranded as Gama Aviation Signature. Gama Aviation has a 24.5 percent stake in the venture, whichsaw “significant growth.” As a result, revenues for the the company's U.S. air-related activities increased by 35 percent, to $518 million. This was also fueled by the “continued growth of our Wheels Up contract,” said the company. It added, “The integration of the BBA business is delivering the envisaged benefits: adding complementary West Coast coverage to the existing East Coast business, diversifying the client base, providing the ability to cross-sell maintenance services into Gama Aviation’s wholly owned U.S. ground business, and delivering cost synergies.”In the Middle East, revenue grew by 20.5 percent, to $23.5 million, and the division was “profitable for the first time,” returning $0.5 million. In October, Gama Aviation bought out Jet Set’s 51 percent stake in its Middle East ground division, seeking "a strong foundation for our planned development in the region.”In Asia Gama Aviation acquired Hutchison Whampoa’s 50 percent stake of its Hong Kong-based joint venture, with Hutchison, instead, becoming a strategic investor in the Gama Aviation group by taking a 20 percent stake. The group itself now also holds a 20 percent stake in Hong Kong Chek Lap Kok International Airport-based MRO provider CASL. “We’re very well placed in the Asia market…we’ve decided to use Hong Kong as our main base, while in a holding pattern waiting to see what happens in Mainland China.”

Aberdeen_investor 19 Mar 2018

Re: Good results this morning Good results indeed.I see a few similarities between KWS and this...mainly due to the highly fragmented market... this is good for acquisitions but also the company may also be acquired as other's may be thinking along the same lines...

gretel 19 Mar 2018

Re: Good results this morning WH Ireland have retained their Buy and 370p target.They have 31.6c EPS for last year, with $17.1m PBT, which they summarise as "broadly in line with expectations", i.e slightly below, due to a "slightly higher effective tax rate in the year" and higher investment in the US Air sales force which should pay dividends in this and later years.Given the placing dilution they now go for 29c EPS this year, rising fast to 41.2c next year. If GMAA make acquisitions as planned then of course these forecast could increase quickly.As the manager of the the MI Downing UK Micro-Cap Growth fund said last week:“It is a great business that has grown to the next stage, is not well known but is a tuck away job for us.”

gretel 19 Mar 2018

Good results this morning Good results this morning as expected, with operating profit up over 28%, debt down 30% or so to only $13m, and in particular a bullish outlook for 2018:"Current trading in line with management expectations; company well placed to achieve its expectations for the current year"The current year forecast of 30c EPS should soon be increased significantly through acquisitions, which are well flagged in the narrative:"· Acquisitions made in 2016 delivering at or above expectations· Pipeline of acquisition targets identified· Management teams and structures in place to support future growth and acquisitions"It's worth noting GMAA's statement today that Gama Aviation Signature "is the largest aircraft management business in the US and has significant growth prospects."The CEO's statement sums up the confidence here:"Marwan Khalek, Chief Executive of Gama Aviation said: "We are pleased to report financial results for 2017 in line with expectations. In particular, we have increased our operating margins and delivered improved operating cash flow.Strategically this is an exciting time for Gama Aviation, having recently completed our successful £48 million fund raising. This will allow us to deliver significant growth and scale across all geographies and service lines, enabling us to make further value enhancing acquisitions from within our fragmented market and will help us to fulfil our ambition of becoming the global leader in business aviation services. In US Air, following the BBA aircraft management business merger, we are now the market leader in US business aviation management. This offers us cross-selling opportunities into our US Ground division. We will leverage customer relationships across our national network and invest in base facilities to increase the scale and scope of services.Europe Air is positioned for sustainable growth and we continue to build our offering in Europe Ground. The acquisitions in Europe have been successful and have added significant value.Recent corporate developments by us in the Middle East and Asia, together with the proposed construction of a business aviation centre in Sharjah will accelerate growth. With Hutchison as a strategic investor, the addition of two experienced non-executive board directors and the strengthened management teams across the regions, we are well positioned for growth in 2018 and beyond."

Aberdeen_investor 16 Mar 2018

Re: Fund manager tips GMAA Gretal,I came across this one today.Will def be buying into this in April/May time once I have some more funds...

gretel 16 Mar 2018

Fund manager tips GMAA GMAA have just been tipped again here:"Judith Mackenzie’s three best value stock ideas on AIM 15 March 2018The manager of MI Downing UK Micro-Cap Growth highlights three interesting value opportunities in the AIM market at present.""GAMA AviationNext up is GAMA Aviation, the fifth largest holding in the portfolio with a 4.92 per cent weighting.Despite having ‘aviation’ in the name, it is more of a services company than a travel company, providing services to both private and public service aircrafts.“If you happen to own a private jet you have to house it somewhere – perhaps in a hanger – but also every three months or after X number of hours in flight you have to have it maintained,” Mackenzie said.As well as this, an individual would need to hire a crew and pilot as they are unlikely to have their own on staff.“GAMA Aviation therefore provides all the ancillaries around such flights, charging for the crew plus around 8 per cent on contracts that are typically for three-to-five-years without taking on the fuel risks,” the manager said.As the firm does not own the planes and is not in charge of the flights, it is more like a quasi-support services business despite sitting in the aviation sector.“We bought our first stock around 10 months ago but we said to them that to operate in more countries they need to do it through joint ventures,” she said.“We knew it would happen at some stage but we were a bit surprised about how quickly it did happen.”Indeed, last year the company announced a large deal with Hutchison China to expand its services into China and the wider Asia market, announcing a £48m rights issue in February this year.“That is symptomatic of a growth and value company. These little companies break out and it is now going to be twice the market cap of it was when we bought in but it is still on 6x P/E,” Mackenzie said.“It is a great business that has grown to the next stage, is not well known but is a tuck away job for us.”

gretel 15 Mar 2018

Full text of tip by Simon Thompson I got hold of the full text of Simon Thompson's recent tip, as follows: "I clearly wasn’t the only one running the slide rule over Aim-traded Gama Aviation (GMAA:258p), an operator of privately-owned jet aircraft, when I rated the shares a buy after the company issued a positive pre-close trading update ahead of results on Monday, 19 March 2018 (‘Primed for gains’, 29 Jan 2018). Gama has just announced a placing of 19.5m shares at 245p each to raise £48m of new funds to ramp up its growth plans. Two-thirds of the new equity is being purchased by an affiliate of the mighty Hutchinson Whampoa (China), a Hong Kong-based conglomerate operating across a diverse number of sectors including the provision of aircraft maintenance and logistic services. Hutchinson will own 21 per cent of the enlarged share capital of 63.5m shares. The fundraising makes commercial and strategic sense. Around $19.8m (£14.2m) of the capital will be used to acquire Hutchinson’s Hong Kong aviation interests, including a 20 per cent stake in China Aircraft Services, a company founded in 1995 and one of only three operators that provide maintenance, repair and overhaul aviation services at Hong Kong International Airport. The $16m being paid for that stake implies a value of $80m for the equity, hardly a punchy valuation for a business that made pre-tax profits of $7.8m in its last financial year and has net assets of $72m. More importantly, it gives Gama access to markets that otherwise would have been difficult to access, and in a less capital intensive way, too. It also makes sense for Gama to deploy $10m on expanding hangar capacity and tooling and equipment at its fast-growing operations on the East and West coast of the US. The company operates from 14 locations across the country and manages a fleet of 200 aircraft, but growth is being held back by capacity constraints, an issue the new capital addresses, as well as providing cross-selling opportunities on the maintenance side of the business. Strategically, it’s a smart call to allocate $5m as seed capital to develop a new $45m aviation centre at Sharjah International Airport, given capacity constraints at Dubai International Airport. It’s not only a lower cost base, but is geographically well located, thereby offering a platform for expansion in the Middle East. In the near term, the placing will be dilutive to EPS, which is why analyst John Cummins at broking house WH Ireland expects EPS to dip from 32.9¢ to 30¢ this year, even though pre-tax profits are forecast to rise 29 per cent to $22.6m on revenues up 18 per cent to $691m. The payoff will be seen in 2019 when he predicts a 50 per cent hike in pre-tax profits to $33.1m on revenues of $758m to deliver EPS of 41.2¢, or almost 30p, implying the shares are being priced on a forward PE ratio of 8.5. It’s not hard to understand why chief executive Marwan Khalek is investing £625,000 of his own money to purchase 255,000 shares in the placing. I continue to rate Gama’s shares a buy and reiterate my 325p target price. Buy."

gretel 12 Mar 2018

News: growth in aircraft management fleet Excellent news - four more large business jets to manage:[link] Mar 2018 US aircraft management fleet growsGama Aviation Signature adds four new large cabin aircraft to US aircraft management fleet.SHELTON, CT – March 6, 2018 – Gama Aviation Signature, the largest aircraft management company in the United States, announced today that it is expanding its managed aircraft fleet with the addition of four large cabin business jets – a Challenger 350, a Gulfstream 550 and two Gulfstream IV-SP aircraft. Gama Aviation Signature’s growing fleet continues to offer a wide variety of aircraft types to satisfy all client needs. The company currently manages over 200 aircraft in the United States and over 250 worldwide.The new Gulfstream IV-SP additions are the ideal intercontinental-range business jets. Each cabin measures 45.1 feet long by 7.3 feet wide by 6.1 feet tall, making it spacious and comfortable to accommodate up to 13 passengers. Providing the ideal choice for business or leisure travel, each G-IVSP is equipped with Wi-Fi connection and the latest in-flight technologies for passengers to remain relaxed yet productive. One of the new Gulfstream IV-SPs is currently based at Miami Opa-Locka Executive Airport (OPF) and is already available for immediate charter. The second G-IVSP will call Teterboro Airport (TEB) home and will be available for charter at the end of this month.These new Gulfstream IV-SPs mark the 28th and 29th Gulfstream jet to Gama Aviation Signature’s US aircraft management fleet. The new Challenger 350 and Gulfstream 550 mark the 2nd Challenger 350 and the 9th Gulfstream 550 respectively.“We are pleased to offer our clients more options for their intermediate and long range missions,” said KC Ihlefeld, Senior Vice President of Aircraft Management. “These aircraft are perfect additions to our US charter fleet of heavy, midsized and light jets. We expect the aircraft to be in high demand and support as well as contribute to Gama Aviation Signature’s fast-paced US charter business.”

gretel 09 Mar 2018

Re: RNS : very impressive new Director It's revealing that on GMAA's web site, the new Director is titled as appointed specifically "to lead M&A activity" rather than simply "Corporate Development" as per the RNS:[link] partner Wheels Up is now looking to expand fast in the USA and then Europe per this new article:[link] raising more than $100 million in funding, Wheels Up, a membership-based private aviation company, has begun the expansion of its sales and marketing campaign........Jamie Jaffe, senior vice president of marketing at Wheels Up, said the company has earned about $300 million in annual revenue and added more than 5,000 members since 2013. About 80 percent of those members are individuals and 20 percent are corporate. During last year’s National Business Aviation Association conference in Las Vegas, Dichter said the company expects membership to reach 10,000 by 2020. “I think we can be a $5-10 billion company,” he said. “There’s no reason by 2025 into 2030 we shouldn’t have 25,000 or 30,000 members. We should be every year taking more airplanes than we took the year before.” In October, Wheels Up announced it had closed an equity-based fundraising round of $117.5 million. The funds will be used for a number of growth initiatives, including the purchase of additional aircraft and expansion of sales and marketing."

gretel 08 Mar 2018

RNS : very impressive new Director GMAA are gearing up for growth - an impressive Board appointment today:[link] his appointment Richard Kearsey, Director of Corporate Development commented: "Gama Aviation has the structure, financial means and shareholder backing to capture the opportunity that exists within the business aviation sector. I'm delighted to join the company and look forward to the Company's development in the years ahead."