gretel
24 May 2018
Re: Downing Micro-Cap: positive vibes As regards the placing earlier this year, the heavy participation of the might Hutchison Whampoa empire in taking a whopping 21% stake in GMAA at 245p says everything about the prospects here.Downing Micro-Caps also had this to say further down today's report which I missed first time around 
))"Gama Aviation PLC (Gama)Gama is a global business aviation service provider, headquartered at Farnborough airport. It focuses on air operations (business aircraft management, special missions and charter of business aircraft) and ground operations (engineering, design, software, maintenance, repair and overhaul (MRO), passenger handling and consultancy). Investment case· Organic growth: we expect natural growth to be aided by the increasing cost of compliance which naturally favours players with scale, crowding out the smaller, localised operators that characterise the business aviation market. We also expect margin growth through operational efficiencies and new higher margin activities.· Consolidation: Gama is one of the top three global players in the sector. Owing to the crowding out mentioned above, the fragmented market, and Gama's public listing, we believe that the company has the potential to be the consolidator of the market.· Re-rating: underlying the operational and market opportunity, we believe that the business is misunderstood and undervalued by the market. Key to a rerating will be Gama's ability to closely control working capital and consistently generate free cash flow. These are aspects which we believe are improving with every successive reporting period."
San Jaime
24 May 2018
Re: Downing Micro-Cap: positive vibes To make this statement Downing obviously are a long term investor and almost certainly did not participate in the placing at 245p earlier this year ?However, like them I am happy that institutions have a long faith in the company to make the £48M investment for the future.Performance wise GMAA are lagging compared to other growth stocks in my portfolio which are currently enjoying viagra curve graph figures.Am continuing to hold hoping we can get through the turbulence and see a similar graphic display here once some of the litigation cases are resolved.
gretel
24 May 2018
Downing Micro-Cap: positive vibes Downing Micro-Cap investment Trust - who have a £5.4m stake in GMAA - reported results this morning, and they're rather pleased with how GMAA are doing so far:[link] is delivering exactly on our investment case. In February 2018, the company raised £48 million to deliver a number of organic growth initiatives in Asia, the Middle East, and the US, as well as further inorganic growth initiatives. As part of this, it also gained a material strategic investor in Hutchison Capital Holdings Limited who now own 21% of the equity. The Board was also strengthened in the period. We believe that these growth initiatives could be transformational for the business in the mid to long term. Post period end, the business posted a positive set of full year results. The focus has been on free cash flow generation and, pleasingly, Gama generated US$14 million in 2017. Operating margins continue to improve across the segments in line with management's long-term targets of 5% in the Air division and 20% in the Ground division."
sharegardener
19 May 2018
Re: Court Case hearing next month ? Below extracts from the placing prospectus of Feb 2018 - the DD case is ongoing and there is a fairly lengthy list of other claims. Some are in the process of being settled out of court and appear not to amount to much. For an AIM company with these 'known unknowns' there will be wariness from the institutional investors until more clarity and certainty that there's nothing else to come out of the woodwork.SG''LitigationThe remaining proceedings fall into two categories, the first involves proceedings by the Company to recover long-standing trade receivables that amount to approximately US$5.5 million. The Company has made adequate provisions or holds security against these claims and as a result the Board does not expect any further provisions will be required. In addition, based on legal advice, the Board considers the proceedings to recover these receivables are likely to be successful.The second involves a number of proceedings brought against the Company in which the claimants seek to recover damages for alleged contractual breaches which amount to approximately US$15.3 million. Based on a detailed analysis of the claims and legal advice, the Board believes that these claims are speculative and/or overlapping and the Company continues to vigorously defend them.the time all these proceedings, some of which are with the same counterparties, are determined or settled, the Board expects the overall awards and settlements to result in a cash inflow to the Company.A summary of such legal proceedings is as follows:Litigation involving Dustin Dryden and/or entities associated with himThe Group is involved in various legal proceedings with Mr Dustin Dryden, a former executive director of the Group who resigned on 30 September 2015, and companies owned by, or associated with, him. The Group has issued proceedings in the High Court in England against Volare Aviation Limited seeking to recover unpaid amounts for maintenance and other work undertaken by the Group on two aircraft (the Volare Aircraft) for an aggregate amount of £432,855. Separately Skye Holdings Limited, Offshore Jets Limited and Dustin Dryden (together the Claimants) have issued proceedings in the High Court in England against the Group for amounts in respect of: (a) the sale of aircraft parts by the Group to the Claimants which the Claimants allege should have been accompanied by certain certification documents; (b) an alleged failure of the Group to deliver certain parts agreed to be sold to the Claimants; (c) unpaid rent in respect of a house let by the Group from the Claimants for crew accommodation; (d) a promissory note issued by Dustin Dryden in favour of the Company to underwrite certain amounts due to the Group from third party debtors; (e) remuneration alleged to be payable to Dustin Dryden; and (f) losses alleged to have been suffered as a result of unreasonable delay and deficiencies in the works performed on the Volare Aircraft. The aggregate amount claimed by the Claimants is £6,071,505. Based on its legal advice, the Board believes that these claims either very materially exaggerate the Claimants' loss and/or are without substance or merit and/or are speculative/opportunistic. The Group is therefore defending these claims vigorously and is counterclaiming for: (a) US$256,868 in respect of outstanding amounts under a loan account from the Group to Dustin Dryden; and (b) unpaid operating and maintenance costs owed by the Claimants to the Group in the sum of £204,167. A hearing in relation to all of these proceedings has been scheduled for June 2018.Legacy claims arising from arrangements prior to the 2015 MergerThe Group is involved in a number of claims arising out of arrangements entered into by the Hangar 8 Group Companies prior to the 2015 Merger. All of these arise from the manner in which the Hangar 8 Group Companies conducted their commercial relationships prior to the 2015 Merger comprising the following:
San Jaime
18 May 2018
Re: Court Case hearing next month ? Gretel - Thanks for the positive statement information, however having potential legal claims of some $15 Million does seem to result in the market nervousness and may be holding back the share price.Indeed the aviation support industry can be exposed to very expensive litigation claims should anything go wrong. Let's hope that come later this year when the Hanger8 case is resolved we can see GMAA reach a steady flight level and then be cleared to climb even higher.Still holding - but I was thinking of taking a small profit and putting the money into the guys who supply the fuel. now that oil is back in favour.
gretel
18 May 2018
The Sharjah FBO is thriving Given that GMAA have a longstanding and successful FBO at Sharjah airport, this report from Sharjah reads well given the expansion, increased number of passengers etc (with a brief name check for GMAA):[link] Excerpts:"H.E Sheikh Faisal bin Sauod Al Qassimi, Director of Sharjah Airport Authority, spoke and presented a video which revealed the final shape of Sharjah International Airport after the expansion. The program was followed by the segment £Journey to the Top£, which included a video that featured the airport£s prominent figures and showcased the significant achievements during the past year and during the first quarter of 2018. An LED interactive show unveiled the airport£s new logo and identity, prior to the event£s conclusion, which honored the authority employees and strategic partners.""H.E Sheikh Faisal bin Sauod Al Qassimi, Director of Sharjah Airport Authority.....reviewed SIA£s most prominent achievements during the past year, emphasizing the number of passengers who traveled through SIA in 2017 increased to 11.4 million, while the airport recorded 76 thousand takeoff and landing movements, a success, in light of the regional and global challenges facing the aviation sector. He also pointed out that SIA benefited from its geographical location and proximity to many seaports in raising air traffic."
gretel
18 May 2018
Re: Court Case hearing next month ? GMAA in their presentation at Mello recently stated definitively (from my memory anyway) that there would actually be a net cash inflow from these cases.I can rarely remember a company being so positive on a legal outcome. GMAA themselves stated definitively in the 2017 final results that when:"all these proceedings, some of which are with the same counterparties, are determined or settled, the Board expects the overall awards and settlements to result in a cash inflow to the Company".
San Jaime
14 May 2018
Court Case hearing next month ? According to the Wikipedia entry for Gama Aviation the outstanding legal case involving Dustin Dryden is due to be heard in June.Was wondering if this action and also the alleged Credit Suisse claim was the cause of the recent volatility and the fact the sp can't break out - despite the good news that Gretel keeps updating us with on a regular basis..... ?Anybody care to update us punters on the current situation, without breaking any Sub Judice rules.
gretel
13 May 2018
News - another service contract win Excellent news:[link] May 2018 Gama Aviation Europe adds Bombardier Global 6000 to its managed fleet.European Air team add Bombardier Global 6000 management contract after competitive bid. The aircraft represents the third Global 6000 to enter the fleet since the start of the year.Farnborough, 11th May 2018 – Gama Aviation, the global business aviation services company, is pleased to announce the addition of a Bombardier Global 6000 to its European fleet. The announcement follows the recent introduction of two Global 6000’s into the Asia fleet.Gama Aviation’s ability to support the aircraft locally and internationally were amongst the defining factors in the client’s final decision. Although primarily for private use, the aircraft will be available on a limited basis for charter out of Farnborough, representing one of the newest Global 6000’s within the UK charter fleet.Mark Gascoigne, Managing Director, Europe Air said: “I’m delighted that our new client selected us after a hard-fought process. We offered a simple solution, that combines our high level of local client service with our ability to leverage our unique global scale, breadth and depth to support the aircraft wherever and whenever the owner flies.”
gretel
11 May 2018
Positive trading from BBA Positive trading statement today from BBA, particularly re Signature, whose revenues are up 13.9% - which should reflect well on GMAA and BBA's merged Signature business in the USA:[link]
gretel
08 May 2018
Re: Downing MicroCap research on GMAA In case anyone hasn't read the rest of Downing Microcap's April newsletter, it's well worth doing so, as these other extracts make clear:[link] on investment: Gama AviationWe wrote to investors at the end of February 2018 outlining our assessment of Gama’s newly announced placing (this text is copied in the appendix for reference). Downing participated in this placing, contributing over £3.2 million across client funds. The shares were placed at 245p, a 7.5% discount to the price around the roadshow. As a result, Downing client funds now own 6.4% of the equity and Gama comprises 9.8% of the Trust.Since the placing, Gama has announced a positive set of full year results for 2017. We discuss these in greater detail from page seven.""Gama Aviation n the lead up to reporting results, we noted strong performance from Gama’s US joint venture partner, Gama Aviation Signature Aircraft Management, a new contract win, and a number of new additions to the fleet in the US and Asia.Richard Kearsey also joined the Board from the Close Brothers Aviation division to head up M&A at Gama. Throughout his 27 years’ in aviation financing with Close, Richard has likely had direct or indirect experience with most operators in the industry and therefore makes a strong addition to the business.The full year results were positive, with $14 million of free cash flow generated and growth in both the Air and Ground divisions. We like the contracted nature of the Air business where Gama earns income through management fees rather than a margin on the sale of consumables, such as fuel. This was evident in the Asia division where there was a decline in revenue, as two aircrafts flew very little in the period (therefore generating less revenue on pass through costs), but gross profits increased as Gama earned more in management fees through fleet growth.We think that this demonstrates the resilience of the model as even if assets aren’t flying they are still generating drop through profit. Once signed into the fleet these assets also tend to be fairly sticky.The story is similar on the higher margin Ground business where regulatory drivers mandate maintenance based on flying hours or calendar days, whichever comes first. This provides good visibility, alongside regulatory cycles which drive additional maintenance work.2018 will be a pivotal year for the business as management embark on several organic and inorganic growth opportunities. We also hope to see operating margins grow further as the model matures internationally. This sets the stage for 2019 and beyond, from which we expect the business to move to a new level of profitability and cash generation as management deploy the £48 million from February’s fundraise. We expect that underlying free cash flow could double in this time once these strategic initiatives are fully implemented. For more detail on the recent strategic developments, please see the appendix to this letter."
San Jaime
01 May 2018
Re: Downing MicroCap research on GMAA The February placing was at 245p per share so purchasers must be unhappy with the sp performance since their dealing date in early March.Cannot quite understand why GAMA is so volatile - other than the fact that gretel keeps punching that big blue BUY button, with the market reaction most times being to sell.Holding at a 191 flight level, hoping we are cleared to 300+ to save fuel pretty soon.
gretel
01 May 2018
Downing MicroCap research on GMAA Downing have issued their April newsletter for their Strategic Micro Cap Investment Trust. There's loads of great info about GMAA, but the Appendix is particularly worth reading, as it's Downing's full investor note on GMAA dated 23 February 2018:[link] 9 February, Gama Aviation announced a proposed placing to raise £48 million to accelerate growth and take them closer to their strategic aim of becoming the global leader in business aviation services.We believe that the business already has a compelling investment rationale. Revenue visibility and quality earnings (70% of gross profits are contracted, and a further 20% which could be deemed ‘recurring’ in nature), cash generative, regulatory barriers to entry, and geographically diverse. In addition, it is run by a capable and ambitious management team, the same one who founded it around 35 years ago and who, post this fundraise, will retain over a 20% shareholding.Gama is a business aviation services company providing aircraft management and maintenance services to a global fleet of aviation assets. It also operates prestigious special missions’ contracts such as the Scottish Air Ambulance, which it has managed since 1991, and the MoD Shadow programme, managed since 2008, amongst others.The proceeds from the share issue are intended to provide both organic and inorganic growth capital. Significantly, an affiliate of Gama’s existing partner in Hong Kong (Hutchison Whampoa), Hutchison Capital Holdings Limited, will take a large and strategic stake in the business with a £32.7 million commitment which will buy them 21% of Gama’s enlarged equity. We think that this is significant – a multi-billion-dollar Chinese infrastructure conglomerate realising Gama’s growth potential.The first portion of capital will be used to buy out Hutchison and Gama’s existing joint venture in Hong Kong. This is a highly strategic region with high quality business aviation assets – large transcontinental jets which typically generate $2-2.5 million of revenue p.a. each. Considering that Gama’s operating profit margin target is 5% on the aircraft management side, that they already manage a handful of jets in Asia, and that Hong Kong alone has a fleet of over 120 jets which they can target, we believe that this is a compelling purchase which has great potential to grow earnings.Hutchison’s other business aviation interest in Hong Kong, a 20% shareholding in China Aviation Services Ltd (CASL), will also be purchased by Gama. CASL’s long standing business is in providing passenger jet heavy maintenance at Hong Kong International airport, but in late 2017 Gama and CASL announced a partnership aiming to grow the business aviation maintenance side where both CASL and Gama see great potential. This is significant as there has historically been no business aviation heavy maintenance capability in Hong Kong, so owners of that 120+ strong fleet must reposition their aircraft elsewhere at potentially great expense and inconvenience. Management guide towards 20% operating margins in the maintenance business over the long term and we believe that revenues here could grow to around $15-20 million. Additionally, we believe that start-up risk is reduced as Gama are plugging into CASL’s existing infrastructure and will even use some of CASLs surplus engineering labour, where appropriate.The next regions earmarked for investment are the US and Middle East. Since we invested back in January 2017, we have pushed for management to build out high margin, heavy maintenance capabilities in the US. What they currently have are over 30 mobile units – engineers in vans – which drive around airfields carrying out lower margin light maintenance. The higher margins come from intensive, heavy maintenance work where Gama currently have no capability in the US. They will invest $10 million to construct and fit-out two hangars,
gretel
30 Apr 2018
Presentations at Mello At Mello on Thursday, Judith MacKenzie, manager of the Downing Strategic Micro Cap Investment Trust, gave a presentation in which she heavily featured GMAA as one of the top holdings.She pointed out particularly strongly that GMAA was completely misunderstood, and had recently been marked down simply because it was in the same sector as Air Partner following the latter's warning, whereas in fact GMAA shared very few characteristics with AIR and was a much more exciting, more reliable and less cyclical investment than AIR or other sector comparators.I also saw GMAA's CEO present to a packed room and was impressed. I thought he came across well - quietly confident and thorough.Hopefully all this will attract further interest given the cheap fundamentals and global leadership prospects.Meanwhile, good news coverage here:[link] Aviation Opens Bizjet MRO CollaborationGama Aviation Hutchison (Hong Kong) recently announced it will be the exclusive General Sales Agent in Asia for business jet maintenance services offered by China Aircraft Services Ltd. (CASL) in Hong Kong.It is offering fixed price base maintenance packages for up to and including 3C/24 month checks for the Gulfstream G350/450, G500/G550 and G650/650ER types and the Bombardier Global BD-700 series. The deals also cover regional AOG (aircraft on ground) events, battery servicing and cleaning.CASL has FAA and Cayman approvals for the Gulfstream G350/450, G500/G550 and G650/650ER types and the Bombardier Global BD-700 series, the primary types operated in the region. Approvals for Bermuda and Hong Kong CAD are planned.Marwan Khalek, CEO of Gama Aviation (Booth H1514) noted that the collaboration marks a new milestone for the company in the region. In addition, the MRO offering will save many owners and crews the inconvenience, cost and unnecessary engine and airframe hours of flying to alternate service facilities. “Hong Kong has the capability and we are proud to represent this through our unique collaboration,” he said.Added CASL CEO Angus Cheung: “This is a historic year for CASL as we add further capability to our strong commercial aviation maintenance platform. We’re very excited …with this compelling offer to business jet owners in the region."
gretel
25 Apr 2018
Two encouraging bits of news Firstly some partnership news:[link] Flight Associates Aligns With Gama Aviation SignaturePosted: Monday, April 23, 2018 – 2:24 PMBeverly Hills-based Pride Flight Associates (www.prideflighht.com) last Wednesday announced its affiliation with Gama Aviation Signature, operator of one of the world’s largest fleets of chartered business jets situated in more than 30 locations around the globe.Aviation consultant Roger W. Behrstock, CEO of Pride Flight, stated: “Our affiliation with Gama affords us the ability to grow our business by better serving the requirements of our diverse and expanding clientele. This brings us the new availability of utilizing its more than 200 superior aircraft, plus top flight management and maintenance.”And:[link] Adds Global 6000 to Asia FleetApril 18, 2018, 5:43 PMGama Aviation (Booth H1514) announced at ABACE 2018 that it has added a second Bombardier Global 6000 to its Asia fleet, two months after the first Global 6000 based in the region joined the company’s rolls of managed aircraft. Gama cited its ability “to support the aircraft locally and internationally,” in particular “flights within Europe and the U.S.,” as defining factors in the client’s choice of management firms.“Few management companies can think global and deliver local in the way that we can,” said Sergio Oliveira e Silva, general manager, Asia. “Consequently, we are witnessing strong interest in our offer when clients wish to maximize the performance of their aircraft.”
