News blog
Hangar 8
- BY: Andrew Hore |
- POSTED: 30/10/2011 |
Passenger jet manager and operator Hangar 8 says that it has benefited from becoming a publicly quoted company because it has raised the company’s profile.
Hangar has increased the number of jets that it has under management from 19 to 32 over the past 14 months. There are 14 jets available for chartering and this part of the business is growing fastest. Charter rates are rising and the number of charter hours flown was 58% higher at 3,1813.
There are a number of benefits of using Hangar 8 as the manager of a plane. Management says that Hangar 8 can save a jet owner 20% on their insurance costs and it can also provide fuel at lower prices. Hangar 8 has an airline licence so it does not have to pay VAT on the importation of a jet on behalf of an owner. Hangar 8 has a wide geographic spread of operations. Management fees are paid monthly and are based on the type of aircraft.
Revenues jumped from £10.9m in the year to April 2010 to £18.2m in the 14 months to June 2011. Most of the growth came from charter revenues, which grew from £8.19m to £14.1m.
The costs of restructuring the business in order to float and the costs of the flotation itself led to Hangar 8 reporting a loss in the 14 months to June 2011, even though revenues were 67% higher at £18.2m – although the pro forma comparatives are for a 12 month period. The underlying pre-tax profit was £636,000. Hangar 8 had £2.22m in the bank at the end of June 2011.
There are plans to bring maintenance in-house, which should save money and improve profit.
Hangar 8 has shown that it can grow organically and it plans to make bolt-on acquisitions.
House broker Daniel Stewart forecasts that the profit will increase to £1.2m in the year to June 2012 – helped by that higher profile. Increased investment in staff and growing the business led to a cut in the profit forecast from £1.5m.
At 108p a share, Hangar 8 is valued at £6.84m. The shares are trading on seven times prospective 2011-12 earnings.
Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFOctober2011_25.pdf
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