Brown Bull
07 Nov 2017
Drop of 8%+ today Does someone know something we don't?
gretel
03 Nov 2017
Buying opportunity imho Best wishes to the CFO on his leaving after 5 years - he was helpful and open in my experience. It all sounds very amicable, especially given that he's staying for another 3 months, which will mean he can oversee the year end and enable a smooth transition.The share price has fallen today primarily because a poster on another bulletin board has admitted he sold out this morning and "trashed" the share price, which just shows what a few trades on a quiet Friday morning can do to a relatively illiquid share.So this is an opportunity imho.
gretel
02 Nov 2017
Downing buy heavily into GMAA Downing's new Micro-Cap investment trust reported their first ever interims this morning - GMAA are their 4th largest investment, and they had this to say:[link] Aviation PLC ('Gama')Gama is a leading global business aviation service provider. Management has grown the business from one aircraft under management to over 250 aircraft, both organically and through selective acquisitions over 34 years. The attraction to Gama's operational model is the high degree of visibility of gross profits - over 70% are contracted - and we believe that a further 20% could be deemed recurring where owners have used Gama's services for many years. Under normal conditions, the business is light on capex and working capital, which facilitates the conversion of profits to cash.Overlaying these attractive attributes are regulatory pressures which are crowding out smaller fleet operators who cannot afford to comply with increasingly stringent requirements from regional aviation authorities. This highly fragmented market is, we believe, therefore ripe for consolidation by the larger players, of which Gama is one of the top five by fleet size. We were also drawn to the highly-aligned management team who own over 30% of the equity."
sharegardener
26 Oct 2017
Re: Overhang cleared? May have been some profit taking giving the recent dip. No new company news but maybe some concerns around Bombardier and secondly prospects of aviation fuel price rises?From Simon Thompson of Investors Chronicle - he regularly tips many smaller Co.'s with GMAA a repeated feature:Buy at 175p, target 225p ('In the ascent', 23 Jan 2017)Buy at 218p, target 250p ('Five small-cap buys', 29 Mar 2017)Buy at 240p, raised target 275p to 300p (‘Four small-cap plays’, 3 Jul 2017)Buy at 250p, target range 275p to 300p (‘Value opportunities’, 19 Jul 2017)Buy at 260p, new target 325p ('Riding earnings momentum', 6 Sep 2017)I expect he'll fit in at least one more 'buy' rec before XMas!SG
gretel
26 Oct 2017
Overhang cleared? Back from hols, and noticed some large-ish transactions earlier this week followed by an immediate rise on some buying. Hopefully this means another overhang/seller has now been cleared.Forecasts are 25.1p EPS this year and 28.02p EPS next year. GMAA remain far too cheap imo.
San Jaime
20 Oct 2017
Re: Featured in Daily Mail As expected, after being tipped by the Daily Wail the GMAA share price has actually moved down a notch. Plus despite Gretel punching the BUY button with almost every post, which usually announces what should be positive news, the share price keeps pretty much to the 230 to 240 level flight.Seems that GMAA needs to sort out a possible pressurisation issue in order that the sp can climb above these low clouds we seem to be stuck in. Or maybe there is just a lack of oxygen problem that needs fixing before hitting the dizzy heights of a 300 plus cruising level ?
gretel
10 Oct 2017
Positive mention in today's Times Today's Times has a Buy tip for the relatively new Downing Strategic Micro-Cap fund, which has made GMAA one of its largest initial investments. GMAA is 6.2% of the fund at present:[link] article notes:"The others include Gama Aviation, which serves aviation groups around the world and enjoys strong cashflow. Good management and cash generation are two of the trust’s main criteria for investment. Gama is in a highly fragmented market with good prospects for consolidation."GMAA's share price has doubled in less than a year. I suspect this is simply a consolidation phase. One more decent RNS may be enough to trigger a large further rise given the cheap fundamentals assuming no material sellers out there, or perhaps it'll simply be the next trading statement.
gretel
05 Oct 2017
GMAA's partner WheelsUp thriving WheelsUp - and therefore GMAA - are on a roll:[link] Up set for further expansion following third round of funding03 October, 2017US membership programme Wheels Up is poised to complete its third round of investment, which will help fund additional aircraft acquisitions and expand its sales and marketing effort across the USA. The move comes as the New York-headquartered company also lays the foundations for its European expansion.Wheels Up launched its members-only programme in 2013 on the back of a record order with Textron Aviation for 105 Beechcraft King Air 350i twin-engined turboprops. To date, the company has a fleet of about 80 aircraft, including a handful of pre-owned Cessna Citation Excel/XLSs.John Colucci, company co-founder and president of Wheels Up Europe, says response to the programme has been “overwhelming”, due in part to the positioning of the product as “more than just a business aircraft service”..... ....This high-end, personalised approach has helped Wheels Up to build its membership to more than 4,000, with an annual retention rate of 90%. “We have barely touched the surface,” says Colucci. “Wheels Up has expanded the market from the bottom up, bringing the benefits of business aviation to a huge number of people. There is so much more potential for growth.”Wheels Up has also set its sights on Europe, where Colucci says the programme will provide an ideal alternative to the “misery of airline travel”.The company announced its intention to expand to Europe more than two years ago, driven by demand from US members travelling to the region. “We haven’t made the move yet, as the US programme has and continues to be our priority,” explains Colucci, who has moved to the UK to oversee the launch.“I would like Wheels Up Europe to be up and running in 2018, with our branded aircraft, but I can’t provide a timeframe,” he says.Wheels Up has begun to lay the programme’s foundations in Europe. It is establishing a network of “approved” charter companies – including its US operating partner Gama Aviation – to provide onward travel for its members, with flights to be booked and monitored through Wheels Up. “We hope to have this offering in place in November,” says Colucci."
HoleInTheWall
04 Oct 2017
Re: GMAA is Many thanks for posting, out of interest do you know or did the article mention the other constituents of the Downing fund? I found the following but its out of date and didn't mention Gama: [link]
gretel
04 Oct 2017
Re:GMAA is key investment for Downing Here's what the Downing investment trust have to say about GMAA as outlined by Stockdale Securities in the above report (sorry, there's no direct link as you have to subscribe to Research Tree):"Aviation (GMAA): Ready for take-offGama Aviation is one of the world’s largest business aviation service providers. It has two divisions: Air Operations and Ground Operations. Air Operations specialise in the provision of aircraft solutions for individuals, corporations, and government agencies through aircraft management, special missions, and charter services. Crucially, charter represents less than 5% of revenues, while special missions and aircraft management provide long-term visibility on profits through fixed management fees and contracts. Ground Operations are focused on maximising the availability of aircraft and upholding their airworthiness. This entails various maintenance and design and modification activities.Gama is a highly cash generative business growing at double digits but trading on a single digit multiple of earnings. The business trades at close to a 40% discount to its peers which Downing believes is unjustified given the quality of its earnings and growth potential. These attributes, combined with a dividend and an aligned management team who own over 30% of the company, led Downing to believe that this is a potentially compelling long-term investment.Downing believes the business model is attractive and protected from much of the cyclicality which one might assume is inherent in the sector. Forward visibility is high with over 70% of gross profits contracted and a further 20% which could be deemed ‘recurring’ where an owner has used Gama’s services for many years. Unlike airlines, the business has no exposure to fuel prices – the management fee is fixed and fuel prices are passed straight through to the user – or residual values, as Gama are not aircraft owners therefore they do not hold aircraft foroperations on their balance sheet. This reduces operational and cyclical risk. Maintenance activities tend to be determined on flight hours or calendar days, whichever comes first. Design and modification spend, while more discretionary, is catalysed by regulatory and ownership cycles and, therefore, also provides some degree of visibility at very attractive margins. In a scenario where owners fly their planes less (or not at all), Gama will continue to collect the same management fees and will continue to carry out calendar-based line and basemaintenance work.Downing believes that the strengths of Gama’s full service model are exhibited through its special missions business. Typically, these are long-term government contracts. Gama has managed (and successfully tendered multiple times) the Scottish Air Ambulance contract since 1991 and has multiple maintenance contracts with the MoD, notably the Shadow programme which it first signed in 2008.Gama operates in a highly fragmented market which Downing believes is prime forconsolidation. Currently, Gama is a top five industry player globally but manages less than 1% of the total US fleet and less than 2% of the total European fleet. No single operator has more than a 4% share in the overall market. The benefits of consolidation to aircraft owners are significant – scale increases buying power for consumables such as fuel, and for training and insurance, while global coverage ensures consistency and availability of service wherever fleet assets happen to be located. Downing believes that this is a more attractive proposition for owners than the small, localised players that dominate the market currently.Overlaying Gama’s strong operational model, are top down regulatory changes whichDowning believes are crowding out smaller ‘mom and pop’ players. The cost of compliance with regional air authorities is increasing and small operators do not have the infrastructure or investment to demonstrate adherence to tightening regulations. Th
HoleInTheWall
04 Oct 2017
Re: GMAA is Hi could you post a link to the report? Thanks.
gretel
03 Oct 2017
GMAA is "key" investment for Downing Stockdale Securities have today published a report on the Downing Strategic Micro-Cap Investment Trust (DSM), which had its IPO on 9 May 2017.One of DSM's first 5 key investments is GMAA. Kudos to GMAA considering the following.... DSM invests "in companies below £150m market capitalisation at the time of investment. The manager (Downing LLP ‘Downing’
takes strategic stakes in companies that it concludes have reached a transformational stage and yet are undervalued. It does so after executing a private equity style due diligence process. Downing is prepared to be constructively active and engaged in its involvement. In our view this differentiates its mandate from the vast majorityof other small and micro-cap managers."DSM's due diligence is extremely thorough as follows:"To generate ideas, the team screen the universe of all UK listed companies. The result of the screening is typically a shortlist of c.200 companies with attractive fundamentals and where the team perceives some opportunity to generate attractive shareholder returns.DSM’s due-diligence process typically includes an analysis of the attributes of each potential investee company including: Quality of management: Downing will seek to find a core management team, themembers of which behave as if they are owner-managers of the business and nurtureshareholder interests. Ideally, the management team will have its own cash invested in the business. Downing will help to complement the core team at the company with appropriate non-executive introductions to ensure good corporate governance. Capital deployment: evidence that the company has the ability to effectively andefficiently deploy capital for the benefit of shareholders. Return on capital and return on investment are key. Cash flow monitoring: the businesses typically will be free cash flow generative or have a clear path to cash flow. Sustainable margins: evidence of long-term sustainable margins or the ability to achieve these given a change in operational structure; Balance sheet: a robust balance sheet, or the ability of Downing to restructure onerous debt; Value catalyst strategy: the ability for the shareholders to drive a strategy that has a defined value catalyst at some time in the future, for example an acquisition led strategy or requirement for working capital finance for growth; and Discounted entry value: an entry value at a discount to Downing’s intrinsic valuation of the investee company, determined by several diligence factors which are similar to that of a private-equity process, including discounted cash flow, qualitative evaluation of the quality and transparency of earnings and the ability of Downing to realise value that is not dependent on market sentiment or price/earnings expansion. Unlike private equity, however, DSM does not rely on leverage to generate investment returns."
gretel
26 Sep 2017
RNS: Downing increase stake Downing and their funds have increased above 6% with 2.75m shares.They've actually bought around 440,000 more shares since their last holdings RNS last month, so they're quite keen:[link] note that the last buying date was last Friday, which was the day after the Capital Markets Day, so we can hopefully deduce that the day went pretty well.
gretel
25 Sep 2017
WH Ireland issue new Buy note WH Ireland have issued a new note post the Capital Markets Day.They reiterate their Buy and 370p target price - 50% upside from the current 246p share price. They forecast 32.9c EPS this year, rising to 36c and 41.2c. That's around 24.3p EPS this year rising to 26.7p and 30.5p EPS.They comment as follows:"Capital Markets Day illustrates the platform built to support growth Gama Aviation is a global business aviation services provider. The Group yesterday held a Capital Markets Day at its Farnborough HQ, including its Air and Ground operation centres. The event provided the opportunity both to revisit the operations at first hand and to meet the wider global senior management teams. Key takeaways were: 1) the robust and scalable operational platform that has been built against what remains a highly fragmented market, 2) strength of the wider management team, 3) the growth opportunities in each of key geographies, including in special missions and through cross-selling, 4) the focus across the business on client delivery and 5) reinforcement of the regulatory environment in which the Group operates. Whilst the shares have performed well since the beginning of the year, we believe that the business is illustrating increasingly positive momentum, including improved cash generation as illustrated in recent interim results. We continue to see the valuation multiples ascribed as undemanding and we reiterate our Buy stance and 370p share price target.Gama’s HQ and core centre of operations in the UK is located at Farnborough Airport. In the Air division, this hosts the Group’s operations centre, international flight planning, charter operations, airworthiness and regulatory functions. Ground operations at the site include the Beechcraft authorised service facility, base maintenance and line maintenance capabilities. We believe that each geography has interesting areas from which to deliver growth: Europe - adding scale to the existing platform and expansion from what remains a predominantly UK centric business into mainland Europe, US – adding further scale from the established platform, leveraging the Signature network following the recent BBA merger and building on the single existing special missions’ contract in place, Asia – build scale from leveraging Hutchison Whampoa and CASL agreements and through acquisition and Middle East – build scale both through organic and acquisitive means, including taking advantage of regulatory changes in Saudi Arabia. Overall, we came away with the view that Gama has built a strong platform from which to grow in this highly fragmented market. Our forecasts imply that the shares trade on a FY 2017E PER of just 9.5x falling to 8.7x, which suggests a significant 40%+ discount to our basket of peers. As such, we reiterate our Buy recommendation and 370p share price target."
gretel
19 Sep 2017
Capital Markets Day on Thursday GMAA's Capital Markets Day "for sell-side analysts and institutional investors" is nicely timed this Thursday at Gama's site in Farnborough - should be a good chance to explain the company's strategy and attractions, and also clarify re Dryden's gubbins.
