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Airwork on track to meet FY target after 1H profit slips 18%

Airwork on track to meet FY target after 1H profit slips 18% on IPO costs, interest rate swaps

By Paul McBeth

Feb. 20 (BusinessDesk) - Airwork Holdings, the aviation services specialist which listed last December, is on track to meet its annual earnings target after first-half profit slid 18 percent on the cost of its initial public offer and a revaluation of its interest rate swaps.

Net profit fell to $4.6 million, or 10.6 cents per share, in the six months ended Dec. 31 from $5.6 million or 13.2 cents, a year earlier, the Auckland-based company said in a statement. Underlying earnings, which strips out $1.3 million in IPO costs and a $1.1 million loss on movements in financial instruments, increased to $6.6 million from $5.3 million. Airwork lifted first-half revenue 16 percent to $65.8 million.

“This result is in line with expectations for the first half of the 2014 financial year and Airwork is on target to meet the recent investment statement forecast for the full financial year of net profit after tax of $8.4 million,” chief executive Chris Hart said.

The board declared an interim dividend of 7 cents per share payable on April 4 with a record date of March 28.

The shares were sold at $2.60 apiece via a broker firm and institutional offer, raising $37.5 million. Of the total funds raised, $17.5 million was used by the company to acquire and cancel shares from majority shareholder Hugh Jones, leaving about $20 million to help fund the company’s growth plans.

The stock was last at $2.91, up 12 percent from the offer price.

The company’s helicopter unit boosted revenue 23 percent to $31.4 million, even as flying hours dropped 34 percent due to minimal flying in the South island fleet, which is in dispute with a customer.

The fixed wing unit boosted sales 9 percent to $34.5 million, and lifted flying hours 18 percent with more activity in Australia and Romania.

Operating cash flow edged up to $14.6 million in the period from $13.5 million a year earlier, while net debt dropped to $64.5 million as at Dec. 31 from $80.2 million a year earlier.

Airwork has a number of facilities maturing this calendar year and has a refinancing proposal from Commonwealth Bank of Australia which it expects will push out maturities to May 2018.


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