Air Touring Group plc
LSE : ATGO

November 18, 2008 07:15 ET

Interim Results for the 12 months ended 30 September 2008

                                                                    
                                                                                                        18/11/2008
                                                                                         GB00B1FYZ312/GBP/PLUS-exn

                                               Air Touring Group plc
                                      ("Air Touring Group" or "the Company")
                                                         
                             Interim Results for the 12 months ended 30 September 2008


Air  Touring Group plc, a leading distributor of business and general aviation aircraft in the United Kingdom  and
Europe,  is  pleased to announce unaudited Interim Results for the twelve months ended 30 September 2008,  as  the
financial year end has been changed to 31 December 08.

Financial Highlights
                                                                       12 months ended              Full year ended
                                                                     30 September 2008            30 September 2007
                                                                           (unaudited)                    (audited)
                                                                                     £                            £
    *       Revenue                                                         10,406,112                   10,470,649
    *       Gross Profit                                                     1,473,683                      952,789
    *       Operating Profit                                                   466,415                      109,011
    *       Earnings per Share (pence)                                             3.2                          0.5


Business Highlights

    *       Six new TBM 850 turbo prop aircraft have been sold in the 12 months to September 2008, compared to 3 new
            TBM 850s for the comparable period in 2007.  These 6 new TBM 850s have a total sales value of $18 million.

    *       Two pre-owned TBM 700 aircraft had been sold on a brokerage basis.

    *       All profit indicators are significantly improved : Gross Profit by 54.7%, Operating Profit by 327.9%

    *       Earnings per share up to 3.2 p ( FY 2007: 0.5p)

    *       Our Engineering business is now a viable and positively contributing secondary business of the Group

    *       An  agreement was signed on 11 November 2008 to acquire the other 50% share of our German JV company,
            Socata Deutschland GmbH.

"2008  is  our best year to date for Socata TBM 850 sales with six new aircraft and two pre-owned TBM 700s sold.
Notwithstanding the crisis in the world markets, demand for this turboprop type has been strong, which underscores
the customers' trust in its operating economies and robust capital asset value.

"The  Company is committed to optimising profit margins and pursuing new business opportunities, whilst  remaining
firmly  focussed  on extending operational growth. We are now pursuing various opportunities in the  Middle  East,
particularly in the areas of business jet sales and trading."

                                                                                   Michael Pearce, Chief Executive


STATEMENT BY THE CHIEF EXECUTIVE, MICHAEL PEARCE


Introduction


Despite  the on-going global economic crisis, I am able to report that Air Touring Group has maintained its  sales
performance,  but more importantly, that we have made significant improvements in our headline profit  figures  on
the back of strong sales for the new glass cockpit TBM 850 aircraft.

For the twelve months ended September 2008, the Company performed in line with management forecasts and as per our
interim statement published for end March 2008. All of our six new TBM 850 aircraft allocations for 2008 were sold
during  the  past  12  months.  In addition, we brokered the sale of 2 pre-owned TBM 700  aircraft.  This  clearly
reflects strong marketability for the TBM aircraft in the European market.

These  sales allowed us to book over $18m of turnover under the TBM product in our accounts for the twelve  months
ended September 2008. More importantly though, compared to the previous 12 months, these new TBM 850 sales carry a
higher gross margin resulting with much higher profitability than the comparative period.

This positive gross margin driver has quadrupled our operating profit. This coupled with improvements made in  our
treasury  management  in  the  earlier  half  of 2008 and a positive contribution  from  our  JV  company,  Socata
Deutschland resulted in earnings per share of 3.2p (FY 2007: 0.5p).


Sales and Marketing


Demand  for executive turboprop aircraft during the period was excellent. This demonstrates the robustness of  our
client base, which consists mainly of high net-worth individuals.

The  Company  had  already  made a number of business development trips to the Middle East  and  established  firm
contacts  with a large and financially stable industrial conglomerate over there, with the aim of selling business
jets to them and their owners.

With  a high concentration of very high net-worth individuals residing in this area of the world, it is our belief
that  by setting such a presence in the Middle East, that we will be better placed to identify and develop further
sales opportunities with other customers.


Engineering Activities


I  am  delighted  to say that the revenues of the engineering business have increased by more than  18%  over  the
comparable period. More importantly, the engineering business has made continuous improvements in its productivity
and  efficiency  over  the past 18 months, with the result that we are now constantly achieving  a  positive  high
single  digit gross margin percentage on each engineering sales dollar. It is our intention to continue and  build
upon this positive performance.


Socata Deutschland GmbH and Air Touring GmbH


Socata Deutschland GmbH ("SD") is the German company in which Air Touring Group had a 50% equity stake. As  of  11
November 2008, Air Touring Group owns 100% of its equity.

In  the 6 months from the last interim report, we had made progress in negotiations with the other equity partner,
concerning the sale of his shares to Air Touring. We felt that the employees and customers of SD would  be  better
served,  if  we  could  purchase the company for a reasonable price. Further, we strongly believed  that  the  TBM
aircraft  product  still  has much untapped marketing potential in Central Europe and that  more  sales  could  be
achieved under Air Touring's direction and ownership.

At  the time of this report, I am pleased to say that we have come to an agreement to purchase the other 50% share
in  SD  for a total consideration of Euro 115,000. This consideration represents approximately 75% of SD's current
book  value, thus putting an all equity valuation of 1.5x book value, a valuation multiple which the Directors  of
Air Touring believe to be very reasonable.

At  some  point in the next several weeks, we will conduct a post-acquisition merger exercise, to merge our  other
German  company  ( Air Touring GmbH) with SD. This will streamline our German business operations,  integrate  the
valuable parts of each business and eliminate duplicative costs.


Profitability


In  the  twelve  months  ended 30 September 2008, revenues were £10.40 million, which was almost  similar  to  the
comparable period (2007: £ 10.5 million).

Gross  margins  were  £1.5  million for the twelve months, an increase of 54% over the  comparable  period  (2007:
£952,789). This is because of the higher contribution gross margins of the new TBM 850 product.

Net Profit After Tax for the twelve months ended September 2008 was £388,781 (2007: Profit £58,171).

EPS for the twelve months ended September 2008 was 3.2p (FY 2007: 0.5p).


Balance Sheet


As  a result of the profits generated during the twelve month period, the balance sheet has been strengthened  and
our shareholders' funds now stand at £1.90 million (FY 2007: £ 1.54 million).


Dividend


The Directors will not be recommending the payment of a dividend for this period.


People


I  would like to thank all our employees and Non-Executive Directors, and staff of our German companies, for their
continued hard work and dedication to the Company during the period under review.


Current Trading and Prospects


The  Company  has a positive outlook for 2009 and the remainder of the financial year, which ends on  31  December
2008  but  is mindful of the potential prolongation of the current economic downturn. The new TBM 850  product  is
doing  well  during  this  economic crisis and we believe this is possibly because  its  operating  economies  and
relatively  lower  acquisition price, attracts potential aircraft owners to migrate from the  small  business  jet
segment.

Our efforts to integrate and develop our German businesses to meet the demands of the Central European market, and
our  business  development activities to cultivate the Middle East, remain key to our strategy  in  the  immediate
term.  It  has always been our objective to diversify our geographic and product risk, and developing  the  market
potential in the Middle East and Central Europe is core to this objective.

Finally,  we  would like to remind all investors that Air Touring Group has changed its Accounting Reference  Date
from  a  30th September year end to a 31st December year end, with effect from this current financial  year.  This
would  allow us to coincide with the Socata factory's annual new aircraft allocations and not least, to also allow
our accounts to be co-terminus with the reporting periods of our German businesses.


Michael Pearce
Chief Executive

                                  UNAUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNT
                                For the twelve month period ended 30 September 2008
                                                         
                                                                                12 Months ended      Year ended
                                                                                 September 2008       September
                                                                                                           2007
                                                                                                        Audited

                                                                                                            
                                                                                          £                   £
TURNOVER                                                                             10,406,112          10,470,649
          
Cost of sales                                                                        (8,932,429)         (9,517,860)

GROSS PROFIT                                                                          1,473,683             952,789
                                                                                   
Selling and distribution costs                                                                -              (6,790)

Administrative expenses                                                                (988,484)           (811,253)

Share based payment (FRS 20)                                                            (23,284)            (36,235)
                                                                                             
Other operating income                                                                    4,500              10,500
                                                                                           


OPERATING PROFIT/(LOSS)                                                                 466,415             109,011
                                                                                                 
                                                                                          
Income from investments in related companies                                             24,900              49,362

Interest receivable                                                                       9,387              13,809

Interest payable                                                                       (111,921)           (114,011)

PROFIT/(LOSS) ON ORDINARY ACTIVITIES BEFORE TAXATION                                    388,781              58,171

Tax on loss on ordinary activities                                                            -                   -

PROFIT/(LOSS) ON ORDINARY ACTIVITIES AFTER TAXATION                                     388,781              58,171

Earnings per share (pence)                                                                  3.2                 0.5
                                                
                                          


                                             CONSOLIDATED BALANCE SHEET
                                              As at 30 September 2008
                                                         
                                                                   Unaudited 2008                  Audited 2007
                                                                               £                            £
                                                                                                    
FIXED ASSETS

Tangible fixed assets                                                   1,085,461                     1,141,805

Fixed asset investments                                                    120,184                       95,284
                                                                          --------                      --------
                                                                                                    
                                                                         1,205,645                    1,237,089
                                                                                                                
CURRENT ASSETS                                                                                                  
                                                                                                                

Stocks                                                                   3,109,078                       717,775    
                                                             
Debtors                                                                    641,415                       454,793    
                                                                                         
Cash at bank and in hand                                                    12,124                       916,695    
                                                                          --------                      --------    
                                                                                                    
                                                                         3,762,617                     2,089,263    
                                                                                                                
CREDITORS: amounts falling due within one
year                                                                    (2,637,785)                   (1,459,192)
                                                                          --------                      --------                  
                                                                                                                
NET CURRENT ASSETS / (LIABILITIES)                                       1,124,832                       630,071
                                                                          --------                      --------
                                                                                                                
TOTAL ASSETS LESS CURRENT LIABILITIES                                    2,330,477                     1,867,160
                                                                                                                
                                                                                                                
CREDITORS: amounts falling due after
more than one year                                                        (424,160)                     (324,018)
                                                                          --------                      --------
                                                                                                        
NET ASSETS                                                               1,906,317                     1,543,142
                                                                          --------                       --------
                                                                                                    
CAPITAL AND RESERVES
                                                                            
Called up share capital                                                    610,800                       610,800
                                                                           876,211                       876,211
Share premium account
Revaluation reserve                                                        441,166                       441,166
                                                                          
Other reserves                                                           1,143,198                     1,168,804

Profit and loss account                                                 (1,165,058)                   (1,553,839)
                                                                           --------                     --------
SHAREHOLDERS' FUNDS - All equity                                         1,906,317                     1,543,142 
                                                                           --------                     --------

The Directors of the issue accept responsibility for this announcement.
                                                                                                                  
                                                                                                                  
Enquiries:
Michael Pearce
Chief Executive
Air Touring Group plc
Tel: 01959 579 710


Bernard Cheong,
Company Secretary
Air Touring Group plc
Tel: 01959 579 710

Duncan Vasey
St Helens Capital plc
Tel: 0207 628 5582


Contact Information

  • Air Touring Group plc