Gama Aviation lowers profit forecast for 2018
Gama Aviation, the London AIM listed business aviation company, has lowered its 2018 profit forecast by $3 million.
The announcement surprised investors as on September 24, when it announced half year results, it had restated its forecast.Shares in Gama Aviation fell from £152 on Friday to £126 at close on Monday.
“The reduction in our expectations for this year is disappointing with the growth that we had anticipated not coming through as strongly as expected,” said Marwan Khalek, Chief Executive of Gama Aviation. “Nonetheless, we are still expecting healthy growth for the year whilst continuing to make good progress in building capability and capacity and securing encouraging new business in all of our key markets. The fundamentals of our business remain strong.”
In a Stock Exchange statement Gama Aviation said: “At the time of the H1/18 interim results substantial growth was anticipated in the 2nd half of the year. However, with Q3 delivered and with better visibility for the full year, trading in certain divisions has not improved sufficiently to deliver the full year expectations.”
The company says that no individual division has fallen significantly. But that profit from the Group’s US Air associate has seen slower than the expected growth in charter and aircraft management revenues.
Gama Aviation, which has recently moved from facilities in Oxford and Farnborough to a new larger maintenance base in Bournemouth, says that it had been too ambitious forecasting a rise in sales in 2018. It does, however, expect to add some of these revenues in 2019.
It also said: “In Asia, the Group’s associate China Air Services Limited (CASL) has continued to underperform with the unexpected loss of contracts significantly impacting margins in an operationally geared business. Plans are in place to reduce costs and recover margins.”