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Airwork annual profit climbs 52 percent, beating forecast

Airwork annual profit climbs 52 percent, beating forecast

By Paul McBeth

Aug. 28 (BusinessDesk) - Airwork Holdings, the aviation services firm which listed last December, boosted annual profit 52 percent on the strength of its helicopter engineering unit, beating guidance. The shares gained.

Net profit rose to $9.83 million, or 20.8 cents per share, in the 12 months ended June 30, from $6.47 million, or 15.2 cents, a year earlier, the Auckland-based company said in a statement. That beat the $9.4 million guidance it gave in March, and the $8 million forecast in its December offer document. Revenue rose 5.9 percent to $125.4 million, in line with the prospectus forecast.

"Airwork has undertaken a successful IPO and NZX listing, exceeded its growth targets and laid the foundations for further growth in the current financial year and beyond," chairman Mike Daniel said. "Underpinning our performance was the certification of key areas of the helicopter engineering business (including engine modification and upgrade programmes) by European and North American regulatory agencies, opening further market opportunities that we are well positioned to develop."

The aviation company raised $37.5 million in an initial public offer last December, of which $20 million was set aside to fund its growth plans. Airwork anticipates more earnings growth in 2015, with the helicopter division focusing on organic growth through extending its engineering and maintenance capacity and expanding its fleet in emerging markets. It will focus further on refining its fixed wing segment, reducing unscheduled and charter flying hours, cutting down on costs and expanding its dry lease fleet and customer base to widen margins.

The shares rose 1.9 percent to $2.70, and have gained 3.8 percent from the $2.60 offer price last year. The stock is rated a 'hold' by First NZ Capital, with a price target of $3.15, according to Reuters data.

The board declared a final dividend of 8 cents per share, payable on Oct. 10 with an Oct. 3 record date. That takes the annual payout to 15 cents, beating the 14 cents dividend forecast in the December offer document, and up from 10 cents a year earlier.

Chief executive Chris Hart said there were "significant growth opportunities" for the helicopter engineering and leasing business, with US aircraft acquisitions being refurbished, then leased or sold to generate more revenue streams.

The helicopter segment lifted revenue from external customers 21 percent to $64.3 million, and increased operating earnings 30 percent to $14 million. The fixed wing unit reported a 6.6 percent drop in revenue to $61 million, while earnings gained 26 percent to $11.7 million.

Airwork generated operating cashflow of $44.6 million in the year, compared to $22.5 million a year earlier. It had cash and equivalents of $2.4 million as at June 30, with net debt of $52.4 million.


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