GAMA AVIATION PLC
Company number 07264678
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
GAMA AVIATION PLC ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
Our purpose
…is to provide aviation services that enable a decisive advantage.
STRATEGIC REPORT
2023 highlights
Chief Executive Officer’s statement
Strategy
Finance review
Principal risks and uncertainties
Section 172 statement
GOVERNANCE
Environmental, Social and Governance Report
Directors’ Report
FINANCIAL STATEMENTS
Independent auditor’s report
Consolidated income statement
Consolidated statement of comprehensive income
Consolidated balance sheet
Consolidated statement of changes in equity
Consolidated cash flow statement
Notes to the financial statements
Parent Company balance sheet
Parent Company statement of changes in equity
Notes to the Parent Company financial statements
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4
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12
16
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30
35
39
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46
105
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GAMA AVIATION PLC STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Strategic Report
2023 Highlights
Chief Executive Officer’s statement
Strategy
Finance review
Principal risks and uncertainties
Section 172 statement
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GAMA AVIATION PLC STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2023 HIGHLIGHTS
Gama Aviation Plc is pleased to announce the results for the year ended 31 December 2023.
Financial summary
Group total (continuing and discontinuing operations)
Statutory $m
Revenue1
Gross Profit1
Gross Profit %1
Statutory profit/(loss) for the year
Continuing operations
Revenue
Gross Profit
Gross Profit %
EBITDA3
EBIT
Loss for the year
Dec-23
274.1
51.8
18.9
59.4
Dec-22
285.6
55.0
19.3
(8.6)
Adjusted2 $m
Statutory $m
Dec-23
147.2
26.7
18.1%
7.9
(3.0)
(9.2)
Dec-22
Dec-23
Dec-22
167.4
29.3
17.5%
16.9
7.5
(1.4)
147.2
26.7
18.1%
5.3
(14.6)
(20.8)
167.4
29.3
17.5%
15.3
2.7
(6.2)
1 Group total figures include continuing and discontinuing operations.
2 The adjusting items are defined in Note 16 to the financial statements.
3 EBITDA represents earnings before interest, tax, depreciation, and amortisation. Adjusted EBITDA is Statutory EBITDA before adjusting
items.
Financial highlights
Group results from continuing and discontinuing operations
Total group revenue down 4% to $274.1m (2022: $285.6m), because of the loss of aircraft management
contracts, partially offset by increased US MRO activity.
Gross Profit down 6% to $51.8m (2022: $55.0m).
Gross Profit Margin down by 0.4ppts at 18.9% (2022: 19.3%).
Completed the sale of its US MRO business for an enterprise value of $131m and a profit on disposal of
$83.3m.
Statutory profit for the year was $59.4m (2022: loss of $8.6m) resulting from the profit on disposal of the US
MRO business.
Net Equity of the Group increased to $100.9m (2022: $34.2m) from the realisation of value from the sale of
the US MRO business.
Net cash inflow from operating activities of $3.6m (2022: net cash inflow of $31.4m) reflected lower
operating cash flow and working capital movements.
Net cash received from investing activities rose to $86.9m (2022: $21.2m) reflecting net proceeds received
from the sale of the Group’s US MRO business, partially offset by investment in capital expenditure.
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GAMA AVIATION PLC STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Net cash outflow from financing activities was $21.1m (2022: $40.8m) primarily relating to the repayment of
the HSBC term loan.
Group cash balances increased to $92.1m (2022: $22.4m) as at 31 December 2023. The increase in cash
is because of the disposal proceeds and profit from the sale of the US MRO business.
Continuing operations
Revenue from continuing operations down 12% to $147.2m (2022: $167.4m), because of the loss of
aircraft management contracts.
Gross Profit from continuing operations down 9% to $26.7m (2022: $29.3m).
Gross Profit Margin up by 0.6ppts at 18.1% (2022: 17.5%) as we lost lower margin aircraft management
contracts.
Adjusted EBITDA down $9.0m to $7.9m (2022: $16.9m) as a result of lower contribution to management
charges from the US MRO operations of $1.7m, adverse foreign exchange movements of $3.3m, additional
one-off gains of $1.5m on sale of aircraft in 2022 compared to 2023, losses on a new MRO facility of
$2.3m, an inflationary adjustment on a Special Mission contract in 2022 of $1.3m and additional staff costs
of $1.3m, partially offset by receipt of legacy debt payments of $2.6m.
Adjusted EBIT down $10.5m to a loss of $3.0m (2022: $7.5m profit) reflecting the lower EBITDA detailed
above combined with additional depreciation on aircraft which were sold and leased back of $1.2m.
Strategic highlights
On 3 November 2023 the Company completed the sale of US MRO for a headline price of $131m. This
represents significant value realisation and the strengthening of the Group’s balance sheet.
Significantly strengthened the Special Mission portfolio with the addition of two new contracts with the
Wales Air Ambulance Charity and an offshore oil and gas contract at the start of 2024.
Added key contracts to the Special Mission air ambulance portfolio from Specialist Aviation Services on 31
January 2024.
On 29 April 2024 the Company announced the return of up to £32.6 million to Shareholders by way of a
tender offer and the cancellation of admission of Ordinary Shares trading. The tender offer of 95p/share
represents a significant realignment of the ownership of the Company.
On 24 May 2024 the Company announced that it had received valid tenders in respect of 25,168,934
Ordinary Shares, representing approximately 38.82 per cent of the issued share capital of Gama Aviation.
As a result, £23.9m was returned to shareholders.
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GAMA AVIATION PLC STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Chief Executive Officer’s statement
Overview
Gama Aviation made significant progress in 2023, financially and operationally. In particular, we completed the
disposal of Jet East, our US MRO business, for $131m and we won and initiated the mobilisation of two large,
long term Special Mission contracts. We ended the year with a robust balance sheet and a strongly growing
customer base which have provided us with a strong platform for further significant developments that we are
implementing in 2024.
US MRO - Sale of Jet East
Jet East was formed in 2020 through the combination of our existing MRO activities in the United States with a
strategic bolt-on acquisition. We supported a strong local management team and provided additional investment
to grow the business rapidly into one of the leading MRO providers in North America. In recognition of its strong
strategic market position and technical capabilities, the trade buyer ascribed a compelling valuation for the
business. This allowed us to realise significant value which delivered very attractive returns on our investment.
The proceeds have enabled us to considerably strengthen our balance sheet, return value to shareholders and
provide funds for development of our other businesses.
Special Mission
The helicopter Special Mission contracts we won – one in emergency medical services and one in the offshore
oil & gas sector – demonstrate our strong operating capabilities and ability to win profitable work in a highly
competitive market. These contract wins bring long term, regular income whilst leveraging our fixed costs base.
The highly strategic acquisition, in January 2024, of the trade and assets of Specialist Aviation Services which
brought some £27m of annual revenue, three significant UK air ambulance charity contracts and six managed
Leonardo AW169 aircraft. With two long term maintenance support contracts which Specialist services in the
Middle East the acquisition also marks the SBU’s first step into the international Special Mission market. This
SBU is now a major contributor to Group profits and growth and, as one of the leaders in this sector, is very well
positioned to capture further growth opportunities.
Business Aviation
Throughout 2023, greater focus has been placed on the FBO, MRO, Aircraft Management and Charter (“AM&C”)
lines of business. Each are now overseen by an MD with specific responsibilities to deliver higher performance
and growth from these mature service offerings. The Group’s FBO network has focussed on optimisation of high
value and margin services such as hangarage, parking and handling to improve returns. We are delighted that
the Jet East sale proceeds enable us to invest in the strategically important FBO facilities in Sharjah and Jersey
which will deliver increased capacity against identified demand and strengthen our overall ability to win and
maintain clients in the broader sector. Our AM&C and MRO businesses operate in competitive markets and are
impacted by lower total fleet volumes, wage inflation and post-Brexit regulation changes. However, we see signs
of a market correction and we are well advanced in our plans to establish a continental European operation.
Technology and Outsourcing
T&O continues to make steady progress with its suite of aviation focused technology solutions and highly skilled
outsourcing services., enterprise resource planning software products. As the commercial aviation market has
recovered almost to pre-pandemic levels, T&O’s FlyerTech brand has seen increased activity in the helicopter,
business jet and airline sectors. We continue to develop our software as a service (SaaS) brand, myairops, which
is attracting strong interest from the US, the world’s largest business aviation market. I have always believed in
the strength of technology products and it is pleasing to see the business turning a corner.
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GAMA AVIATION PLC STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Operating performance
The management of interdependencies across the SBU’s has been a theme for this past year within our long term
‘Fix & Optimise’ programme. Efficiencies gained from further integration of systems and processes are resulting
in an ever more resilient platform upon which the business now operates.
De-listing and Board Changes
In May 2024, we completed the return of £23.9m to shareholders by way of a tender offer and de-listed the
business from AIM. This is delivering considerable cost savings and enhancing our flexibility to pursue our
strategy of continuing growth, organically and by acquisition, in attractive aviation sectors where we can leverage
our expertise, scale and entrepreneurial approach.
There were changes to the Board following the de-listing. I would like to thank our outgoing Chairman Peter Brown
and his fellow non-executive directors, Stephen Mount and Simon To, for their significant contribution and sound
counsel throughout their tenure. They have strengthened our governance processes, guided and supported the
Executive whilst ensuring the appropriate level of challenge. I would also add a special thanks to our Chairman,
who has been a prominent member our Board for over 10 years. Throughout, he has been a staunch advocate
of the business whilst always safeguarding the best interests of our shareholders, customers and our people alike.
I wish them all well for the future.
Balance sheet and group capital plans
We have a strong balance sheet (net cash of $42.4m as at 31 May 2024) and we are investing in our core
businesses. This includes the build of the FBO and hangarage operations in Sharjah and Jersey, which we target
to be complete by Q2 2025 and Q1 2026 respectively alongside continued investment in our other SBUs to support
organic growth and strategic acquisitions.. This enhances our already strong market position.
Our People are the heart of our business.
Our resilience, success and longevity in a highly competitive and challenging service business is testament to the
skill, professionalism, dedication and passion of our people who enable us to deliver our client’s mission 24/7. As
a service business our people are our greatest asset and are the beating heart of our business. We are fully
cognisant of the cost-of-living and other challenges many of our people face and we will continue to support our
people responsibly and align their interests to those of the business, its customers and its shareholders.
Outlook
The Board remains firmly focused on the continued execution of our strategy. Significant work remains to be done
in continuing to optimise the operational and financial performance of the business and in capturing organic
acquisitive growth opportunities. However, the prospects of us doing so have been significantly enhanced by our
stronger balance sheet and liquidity resulting from the sale of Jet East. Furthermore, the de-listing will serve to
release significant bandwidth and resource that will allow the leadership team to apply greater focus on the
business and the management and mitigation of the inherent execution risk of a growth strategy.
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GAMA AVIATION PLC STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
We have an excellent platform upon which we can build the next stage of the Group’s development and accelerate
our growth to deliver value to shareholders. Accordingly, the Board believes that the Group is on track to deliver
an improved performance and sustainable growth in 2025 and beyond.
Marwan Khalek
Chief Executive Officer
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GAMA AVIATION PLC STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
STRATEGY
FIVE-YEAR STRATEGY; FOCUS ON GROWTH
The Board believes there is considerable scope for margin improvement by more effective, focused delivery of
highly valued services within the Business Aviation, Special Mission and T&O sectors in service areas where the
Group has full management control and established competitive advantage.
Our focus for growth strategy will be underpinned by:
Focusing on our clients
Our clients rely on us to deliver, and they depend on us to remove the complexities and intricacies of
aviation. In doing so we provide them with services, aviation platforms and availability that deliver a
decisive advantage. We must therefore provide services that are relevant to their needs and enables their
mission, now and in the future.
Focusing on our business model
Several of the Group’s businesses operate on tight margins, with operational gearing helping to power
the business model. Revenue losses, revenue leakage, bad debt provisions and unfocused spend all
hinder our own performance and require focused management effort to contain, reduce and eliminate.
Focusing on our people
We are a service business, and the knowledge, integrity and dependency of our people is highly prized
by our clients and the business. Therefore, our ability to drive margin improvement is predicated by our
people’s performance and the support the Group provides to allow them to perform effectively and delight
our clients.
Focusing on our place in society
Aviation has challenges; however, it provides significant economic benefits to a wide variety of
communities worldwide. In both respects, we must ensure we maintain the highest standards and ethics
while adapting and encouraging the use of the latest technologies to improve our world. Further
information regarding the Group’s non-financial and sustainability information is contained in the Group’s
Environmental, Social and Governance Report on pages 20 to 29 of this report.
2024 IMPERATIVES
Business Aviation (BA)
The Business Aviation SBU is focused on providing our private and corporate clients with the services needed to
safely enable their private jet travel requirements. The SBU’s strategic business imperatives are to:
Expand our UK and European maintenance reach to support our volume clients. Foster the large
jet base maintenance business in Bournemouth, extend our portfolio of services to include AOG, line
maintenance, components and parts;
Deliver a world class aircraft management service. Reinvigorate, through a new management team,
the Group’s aircraft management business focusing on Europe and the Middle East, stabilising the
number of aircraft in the fleet and the margins attained from that business;
Support our clients with charter solutions. Develop the charter business to respond to the trends in
customer demand from sectors that include specialist cargo, entertainment tours, band tours and the
travel needs of high-net-worth individuals; and
Enhance our FBO offer, our network and performance. Ensure that the maximum opportunity is
gained from aircraft transitioning through our FBOs and strategically review new opportunities that
consolidate or enhance our network.
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GAMA AVIATION PLC STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Special Mission
The Special Mission SBU is focused on providing services to governments and corporations which rely on aviation
assets to perform a specialised, often time critical, mission. Strategic imperatives for the SBU are to:
Penetrate the UK charity Air Ambulance market. Prosecute and capture opportunities in the UK charity
Air Ambulance market through the displacement of incumbent providers;
Build market share in UK government programmes. Prosecute and capture opportunities with the UK
Government, particularly within the Ministry of Defence and Home Office;
Expand our presence via the Bond Helicopters joint venture in the Energy and Offshore market.
Prosecute and capture further offshore oil and gas, wind and related offshore energy opportunities
through the displacement of incumbent providers; and
Develop an unmanned aerial systems (UAS) capability. Develop the required capabilities to provide
UAS solutions to complement the use of existing aviation systems to deliver Intelligence, Search and
Reconnaissance (ISR) missions across several sectors.
Technology & Outsourcing
The Technology and Outsourcing SBU is focused on the delivery of advisory, technology and outsource services
to aviation clients who seek to gain a decisive advantage using real and near real time intelligence. Strategic
imperatives for the SBU are to:
Provide the Enterprise Resource Planning (“ERP”) technology that powers the business aviation
market. Focus on the operational needs of the business aviation market particularly with regard to the
complexity of FBO and
requirements of continued
airworthiness management;
flight operations and
regulatory
the
Offer outsourcing solutions to remove customer costs. Capitalise on outsourcing opportunities and
larger competitors exiting the business aviation market by growing share and extending the competency
towards the regional airline market;
Build high value/high margin advisory services. Seek to maximise fleet availability and regulatory
compliance while safely reducing maintenance costs for airlines and business aviation fleet operators;
and
Build the ISR products of the future. Develop the data management component of the “intelligence as
a service” using the ISR platforms deployed by the Special Mission SBU.
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GAMA AVIATION PLC STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
FINANCE REVIEW
Group total
Statutory profit/(loss) for the year
Continuing operations
Revenue
Gross Profit
Gross Profit %
EBITDA2
EBIT
Loss for the year
Statutory $m
Dec-23
59.4
Dec-22
(8.6)
Adjusted1 $m
Statutory $m
Dec-23
Dec-22
Dec-23
Dec-22
147.2
26.7
18.1%
7.9
(3.0)
(9.2)
167.4
29.3
17.5%
16.9
7.5
(1.4)
147.2
26.7
18.1%
5.3
(14.6)
(20.8)
167.4
29.3
17.5%
15.3
2.7
(6.2)
1
2
The Adjusted Performance Measures (APMs) are defined in Note 16 to the financial statements and reconciled to the nearest
International Financial Reporting Standards (IFRS) measure. APMs include Adjusted EBITDA and Adjusted EBIT.
EBITDA represents earnings before interest, tax, depreciation, and amortisation. Adjusted EBITDA is Statutory EBITDA before adjusting
items.
Sale of US MRO activities
On 3 November 2023 the Group completed the sale of its US MRO business for a headline price of $131m and
the Group recognised a net profit of $83.3m.
The results associated with the Group’s US MRO operations have been separated out from the review of
ongoing operations in order to facilitate an analysis of the underlying business post transaction.
Cash flow movements
The Group has reported net cash inflow from operating activities before working capital of $7.3m compared with
$16.7m in 2022, reflecting lower EBITDA. Net cash inflow from operating activities was $3.6m (2022: inflow of
$31.4m) reflecting the lower operating performance combined with investment in working capital movements.
Net cash received from investing activities rose to $86.9m (2022: $21.2m) reflecting net proceeds received from
the sale of the Group’s US MRO business, partially offset by investment in capital expenditure.
Net cash outflow from financing activities was $21.1m (2022: $40.8m) primarily relating to the repayment of the
HSBC term loan. Interest on finance leases and loans were largely offset by proceeds from borrowings associated
with the Close Brothers loan and further draw downs on the Great Rock RCF.
Financing
As at 31 December 2022 the Group’s credit facilities comprised a £20m term loan from HSBC (which had a
maturity date of 31 January 2023) and recently secured credit facilities with a US lender Great Rock Capital LLC.
The Great Rock facilities were secured by the Group's wholly owned US operating subsidiary, Gama Aviation
(Engineering) Inc. The $25.0m facilities were for a term of four years and comprise a combination of a RCF and
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GAMA AVIATION PLC STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
up to $6.5m of term loans. A total of $20.0m was available immediately, with a further $5.0m available contingent
on future trading performance.
On 25 January 2023, the Group repaid its £20m term loan from HSBC in full utilising funds received from the
repayment of the Company’s intercompany loan with its US subsidiaries, together with cash realised from the sale
and leaseback of helicopters in September 2022.
On 3 March 2023, the Group received $11.6m from Close Brothers Aviation and Marine by way of a loan secured
by a mortgage over the Group’s owned aircraft. The loan was used to fund the investment capital expenditure
and other working capital requirements of the non-US business.
In conjunction with the completion of the sale of the Group’s US MRO activities on 3 November 2023, the
Company repaid in full the Great Rock facility of $15.9m.
The Group is in advanced negotiation with lenders regarding new facilities to support the strategic plans and
investments of the businesses.
Liquidity
The Group liquidity as at 31 December 2023 comprised cash of $92.1m. As at 31 December 2022 the Group had
$22.4m of cash and $9.0m of its $15.0m RCF with Great Rock Capital was undrawn.
The Group transitioned from a net debt position of $66.4m as at 31 December 2022 to a net cash minus debt
position of $7m as at 31 December 2023 reflecting net proceeds received from the sale of the Group’s US MRO
activities.
These figures include $73.9m (2022: $52.7m) of lease obligations. The increase reflects new leases for aircraft
used in Special Mission activities, partially offset by leases disposed of on sale of the US MRO operations.
Collection of receivables
Following the litigation update provided in the Company’s 2022 Annual Report and 2023 Interim release, the
Group continues to pursue the recovery of its long-standing trade receivables through enforcement actions both
in the UK and in other jurisdictions. The Group has made progress through court proceedings in the UK, which
has resulted in material collections in 2023. It remains the Board’s expectation that other than the provisions
already made against these claims, no further provisions will be required.
Impairments
During 2017, the Group entered into a Build-Operate-Transfer and Service Concession agreement (BOT) with the
Sharjah Airport Authority (SAA) under which the Group is committed to construct a Business Aviation Centre
(BAC) at Sharjah Airport. Completion of this project was frustrated by various factors including funding constraints
and the pandemic and as a result the Company had recognised $15.3 million of impairment charges associated
with this project as at 31 December 2022. A further $0.7 million of construction related costs were incurred in 2023
and whilst the Board has approved the construction of the BAC these further costs have been impaired pending
finalisation of precise funding structure of this project. The Board remains confident that the Group will finalise
these arrangements, at which time all these impairments may reverse.
In addition, expenditure of $0.5m incurred during the year on the Jersey FBO project has been impaired. Whilst
the Group is reviewing alternative options to secure the necessary funding for the project, the Board considers
that it is appropriate to recognise an impairment loss in respect of this expenditure until profits can be forecast
with greater certainty.
The Company also recognised an impairment of $5.5m associated with its T&O cash generating unit reflecting
lower than expected growth in this segment.
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GAMA AVIATION PLC STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Finally, the Group recognised an impairment of $1.9m relating to the costs of standing up an MRO contract based
in the UK, following lower than expected levels of activity at this facility.
Other than the above and following a diligent review of the carrying value of investments, the Board does not
believe there is a need for any other impairments.
Finance income and expense
Finance income increased to $1.3m (2022: $0.1m) reflecting interest on deposit accounts following the sale of the
US MRO and interest on long-standing trade receivables.
Finance expenses of $7.5m (2022: $9.1m) primarily comprise foreign exchange movements on cash and
intercompany balances, loan interest expenses and interest on leases. The overall value has fallen year on year
due to foreign exchange losses on borrowings recorded in 2022 which were not repeated following the repayment
of the sterling denominated loans with HSBC.
Taxation
There is a statutory and adjusted taxation charge for the year of $98,000 (2022: credit of $59,000), refer to Note
14 for further details.
Dividend
The Board does not recommend a dividend for 2023 (2022: nil pence per share). On 29 April 2024 the Company
announced the return of up to £32.6 million to Shareholders by way of a tender offer at 95p per share. This was
approved at an Extraordinary General Meeting held on 15 May 2024. On 24 May 2024 the Company announced
that it had received valid tenders in respect of 25,168,934 Ordinary Shares, representing approximately 38.82 per
cent of the issued share capital of Gama Aviation. As a result, £23.9m was returned to shareholders.
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GAMA AVIATION PLC STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
PRINCIPAL RISKS AND UNCERTAINTIES
Effective risk management
During 2023, the Group continued to operate a risk register as a system of internal control. Risk appetite and
mitigation strategy are overseen by the Board, with the support of the Audit Committee, which reviews and
considers the effectiveness of the processes that underpin risk assessments and our system of internal control.
The Executive Directors meet regularly to review the financial and operational risks in the business, as
summarised in the risk register and the internal and external political, economic, social, technological, legal,
environmental, and potential reputational risks which may affect or influence the execution of the Group’s strategy.
The scope of the review includes consideration of the regulatory frameworks and compliance obligations
applicable to the Group’s businesses.
The Group’s risk register is the result of a bottom-up collection of risk reviews undertaken across all SBUs and
internal support functions. These are created following workshops which identified a wide range of risks, including
those associated with the delivery of the respective strategic plans. Management identifies and implements risk
mitigation plans. Newly emerging risks identified within the business are reviewed as they arise and the risk
register is updated, with mitigating action taken when required. Discussion of any new material risks are an
agenda item discussed by all Directors at Board meetings. Business unit leaders report progress on risk
management activities via quarterly business reviews, which are chaired by the Chief Executive Officer. Safety
related risks identified during this process, or requiring additional action, are escalated to the Safety Review Board.
Internal audit
KPMG provided internal audit services in 2022 but due to the board’s and finance team’s focus on refinancing,
sale of the US MRO business and fixing and optimising a range of finance processes this programme was not
continued in 2023. The Company intends to recommence specific risk focused assignments, based on feedback
from the external audit process and guidance from the Directors in 2024.
Principal risks
The Directors consider the principal risks to the business to be as follows:
Inadequate funding and liquidity constraints to deliver the strategy and to support the investment needs
of the business
The standing up and integration of new contracts recently won or acquired by the Group and existing
contract underperformance
Inferior financial performance resulting from gross profit margin erosion and/or an increasing overhead
cost base within the business
The potential impact resulting from pandemics such as COVID-19, environmental catastrophes stemming
from climate change and from significant adverse changes to the political or economic landscape
Cyber threats and associated challenges to the Group’s information security environment
Reliance on, and challenges in retaining, key individuals who are important to the evolution and measured
development of the organisation
The supply and recruitment of appropriate staff and skilled personnel
Health and safety failures or an air accident which damage the Group’s reputation
An increasing regulatory burden and potential breach in a highly compliance-driven environment
Failure of business processes and/or business and financial reporting systems to provide timely, complete
and accurate information to enable effective management of SBU and Group functions
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GAMA AVIATION PLC STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Inadequate funding and liquidity constraints to deliver the strategy and to support the investment needs
of the business
Liquidity and ensuring the Group has sufficient financial resources to operate the business and to make the
appropriate strategic investments is a principal risk which the Directors continually monitor and assess. The
Directors assess the business requirements in terms of investment capital and funding of start-up costs and lines
of business which are trading unprofitably. The delivery of appropriate funding lines to enable the strategy and
operational effectiveness of the Group is continually assessed by the Directors. If appropriate facilities are not in
place, the operational effectiveness of the business and investment requirements of the business can be
adversely affected. In November 2023, the Group sold the US MRO business releasing significant value to the
business to reward shareholders and invest in the remaining businesses. The Directors have identified that
additional financing is likely to be required to support larger capital-intensive related opportunities whilst also
considering any potential increases in the cost of debt financing resulting from evolving macro-economic factors.
Details of the Directors considerations regarding going concern are contained in note 3 to the financial statements.
The standing up and integration of new contracts recently won or acquired by the Group and existing
contract underperformance
Operational performance risk may arise from the start up and the integration of new contracts. This can be affected
by inadequacies in the supply chain and in new equipment and aircraft acquired. The integration of new staff into
the group can represent a risk in terms of adherence to group policies and adoption of group systems, standards,
and processes. This risk can result in additional costs being incurred and revenue being deferred and held back.
Contract delivery failure can result in unrecovered costs and ultimately the loss of a major contract.
Financial underperformance
Robust financial performance is a key imperative for the Group; however financial performance has in recent
years been below what was targeted, significantly impacted by the COVID-19 pandemic and certain other factors.
The 2021 restructuring of the organisation into SBU segments has enabled the Directors and senior management
to more easily identify opportunities to grow gross margin within the major trading components of the Group.
Additionally, the sale of our US MRO business in 2023 is enabling the Group to focus resources on the
competitiveness and growth opportunities of our remaining business with delivery of gross margin improvement
being a key element of the Group’s Fix & Optimise initiative. The Directors are also closely monitoring the fixed
cost base of the organisation which is partially impacted by the increasing costs of aviation and corporate
compliance related expenditure.
Impact of pandemics, climate change and significant changes in the political or economic landscape
The global aviation industry was significantly impacted by the COVID-19 pandemic. This has had both negative
but also some positive effects on different aspects of the Group’s activities, at different times, in different territories
and across different service lines. The Directors remain highly alert to the potential impact from the evolving
pandemic impacted landscape and take active measures to offset any potential challenges caused by COVID-19.
The Group pays particular attention to the impact that the pandemic has had on its staff and implemented
measures to support colleagues during this challenging time. The ongoing financial and commercial review of the
short and long-term impact of the pandemic on different segments of the Group’s service offerings has been made
more effective due to the 2021 re-organisation within the Group and the move to focus on SBU’s.
The Directors are also monitoring and reviewing possible implications of climate change, a changing political and
economic landscape, including the impact of the conflict in Ukraine and Middle East, liaising with relevant internal
and external stakeholders where possible and appropriate.
Where the Group is exposed to inflationary cost pressures greater than those which can be contractually mitigated
against, the Directors remain conscious of the levers available to them by flexing discretionary spend and other
such actions as may be required.
13
GAMA AVIATION PLC STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Cyber threat and information security
In common with most businesses, the Group is exposed to the threat of cyber security breaches, which could
result in data loss, reputation damage, and have financial ramifications. Throughout 2023, the Group maintained
its commitment to bolstering its defences against such risks. Building upon its Cyber Essentials Plus accreditation,
the Group dedicated resources to aligning with ISO27001 standards. This initiative has enabled the Group to
strengthen its controls, implement proactive monitoring across critical IT infrastructure, and completely revise
Information Security policies. Additionally, the Group has introduced a fully managed computer-based user
awareness training service. The Group continues to place a very high degree of importance on this area of
potential risk.
Reliance on and retaining key individuals
People are a key ingredient to the Group’s future success. The Group operates a formal talent and succession
planning framework, with software that supports this HR led process, which enables managers to identify key
team players and assess the flight risk of those individuals. The system also supports the identification of high
potential team members and supports the creation of a development plan to guide anticipated future growth of
the individual.
The supply and recruitment of appropriate staff and skilled personnel
The supply of staff and skilled personnel proving challenging post Brexit and COVID-19. It has impacted the
Group’s ability to recruit from within and outside the UK and the cost to the Group in salaries and employee
benefits are increasing beyond inflationary levels. The shortage of candidates is an ongoing risk in engineering,
technology and support services such as finance, legal and IT.
The risk of safety incidents and accidents
The Group recognises the importance and benefits of having a fully integrated Safety Management System (SMS)
that proactively seeks to identify and eliminate hazards before they cause incidents or accidents. Therefore, the
Group has a highly proficient and fully resourced Safety Department, utilising industry leading tools and
techniques proactively, to identify and eliminate or mitigate safety risks before they lead to damage or harm. All
staff are actively encouraged to report hazards and near misses, including the self-reporting of errors and mistakes
within a fair culture that seeks to educate and improve safety for everyone. The SMS is actively promoted through
SMS training, monthly safety newsletters and safety bulletins, where staff are provided feedback on reports that
they have submitted and how their reports have made a difference. Safety is discussed and reviewed at every
level in the Company, from shop floor “toolbox talks” and Safety Action Groups to the Safety Review Board chaired
by the Accountable Manager and attended by senior management.
Regulatory compliance
To ensure very high levels of safety, the aviation industry has significant and complex regulation to cover training,
engineering, safety and operations. Breaches of regulations, including recent regulations pertaining to Russia,
are likely to lead to sanctions such as suspension of operations or other restrictions. The Directors believe that
the regulatory burden is likely to increase over time and have members of staff dedicated to liaising with the
various regulatory bodies. These colleagues form part of the Compliance & Assurance functional service line,
established in 2021 following the Group’s strategic review which aimed to enhance focus on our regulatory
compliance thereby improving the service to customers and driving service excellence. The Compliance &
Assurance team is responsible for the governance and leadership of the compliance framework, including the
provision of training and appraisals to ensure understanding and compliance. In addition, the Group has a
Corporate Compliance Officer who, working closely with the Group legal function, is tasked with leading the
evolution and development of the corporate compliance landscape across the Group.
14
GAMA AVIATION PLC STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Failure of business processes and financial reporting systems
The Group recognises the importance of having appropriate and efficient business processes to ensure that
issues are promptly identified and resolved. Therefore, the Group utilises standard accounting and reporting
packages and employs appropriately qualified individuals to administer and operate these systems and
processes.
Approval
This report was approved by the Board of Directors on 12 June 2024 and signed on its behalf by:
Michael Williamson
Chief Financial Officer
15
GAMA AVIATION PLC SECTION 172 STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
SECTION 172 STATEMENT
The global aviation services market performed to expectation during 2023 as the industry edged towards the 2019
(pre-pandemic) levels of air travel. In response to market changes, the focus of the company moved towards
investing in its long-term goals for business aviation management, providing turnkey mission solutions and
operational efficiencies through the application of technology and flight support as well as maintenance solutions
for customers across a wide range of sectors.
The source of funding during 2023 provided a challenge for the company as lending institutions raised interest
rates in response to market pressures and the Directors navigated the sourcing of investment for future growth
with securing the best terms for its credit facility. The directors focus on the conflicting requirements bearing in
mind their duties under s.172 of the Companies Act 2006 as outlined below.
s. 172(a) Likely consequence of any decision in the long term
Directors remained mindful of the long-term consequences of their decisions, evaluating the risks involved in the
Company’s business propositions, the objectives and views of its key shareholders, as well as any impact on
employees, suppliers, the community and the environment before making a final decision that they believe to be
in the best interests of the Company. With this in mind, decisions were taken to:
Delay investment in certain projects pending more sustainable sources of funding;
A change of focus of business areas, to move away from contracts and assets that had failed to realise
adequate returns on the investments in those areas;
Managing and building long term business relationships with key suppliers to achieve mutual advantages;
The re-financing and acquisition of assets on leasing arrangements to preserve the liquidity required for
alternative investments;
Partnership with a company to help deliver business solutions for the off-shore markets; and
Building up and rationalising the Jet East business culminating in its disposal to West Star in November
2023 thereby providing the funding capital for long-term investment projects of the Company.
s. 172(b) The Interest of the Company’s employees
The Directors consider the Company’s employees as key assets for fulfilling our customer requirements and strive
to preserve employee engagement and attract talent to the business. The focus on inspiring and developing a
diverse workforce is delivered through:
Engaging with employees to solicit their opinion and taking these into account in decision making to shape
the future of the Company;
Providing regular updates and having regular dialogues with employees including the provision of email
updates, webinars and publications on the Company’s intranet;
Providing the opportunities for recruiting and developing talent, upskilling and developing leadership skills
with a diverse and inclusive culture;
The commitment of our leadership to keeping our employees safe and supporting our employees in the
maintenance of mental health and wellbeing, and particularly directing employees to sources of support
and assistance through challenging times such as family loss, stress and depression;
Recognition of employees’ contribution to the business through pay and bonus awards based on set
performance criteria;
Creating a forum to discuss topical issues relating to challenges at and outside work;
Analysis of comments, feedback and metrics obtained through the employee voice app to track and
review progress made on matters raised by employees;
16
GAMA AVIATION PLC SECTION 172 STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
Engaging external consultants to enable the simplification and efficiency of the employees’ workload (e.g.
the simplification of the Company’s chart of accounts that has reduced the workload of the finance team);
Continuing focus on employee wellbeing and work-life balance by enabling medical insurance cover,
mental health support, financial well-being advice and supporting hybrid working arrangements; and
Ensuring the safety of employees through recognised safety and compliance measures.
The engagement with employees is based on the premise that the complex technological and engineering
challenges are dependent on the skill and commitment of the employees and the Company’s need to attract and
retain a committed workforce. This commitment is underpinned by the policies, guidelines and support tools
outlined in the Employee Handbook that enable management to lead on and foster a safe and inclusive culture
and enable performance within a safe and inclusive culture.
s. 172 (c )The need to foster business relationships with suppliers, customers and
others
The Company’s activities affect a wide variety of individuals and organisations and the Directors engage with
stakeholders and assess the differing needs and priorities through engagement within the sub-committees and
use stakeholder input and feedback to inform its decision making.
The Company aims to build enduring relationships with government regulators, customers, suppliers and
communities in the regions where it operates. The Company considers the safety of its employees, customers
and the wider clientele utilising its services paramount and in view of the increase in contracts for the supply and
operation of air ambulances, the Company has engaged with industry experts and invested to improve aircraft
design and features to promote health and safety on medivac transportation and to inspire confidence in its
services.
The Company’s Procurement Charter has been developed to encourage efficient and sustainable supply chains
that act responsibly and comply with ethical and legal compliance on matters such as modern slavery and human
rights, employment practices, anti-corruption, intellectual property protection, data protection and cyber security,
health and safety, diversity and inclusion and last, but by no means least, on ensuring environment and
sustainability within its supply chain. With these considerations in mind, the Company focuses on training its
employees involved in procurement to assess the efficacy and ethical standards adopted by its suppliers and to
monitor performance throughout the life cycle of its dealings.
The Company’s management regularly meet with their key customer counterparts to obtain feedback to improve
on the services and through contractual negotiations and performance, customers are encouraged to consider
options that drive efficiencies and to adopt measures that ensure compliance though persuasion, example and
encouragement.
The Company’s management systems (ISO 45001 for safety and ISO 14001 for environment) are monitored and
where required externally audited and accredited to ensure that the needs and expectations of stakeholders,
including investors, shareholders, customers, suppliers, and employees, are fully understood and acted upon.
s. 172 (d) The Impact of the Company’s operations on the community and the
environment
The Company supports local communities and works with charities and local organisations through a commitment
of time, resources and fund-raising activities, including providing internships and apprenticeship opportunities
across the UK locations. To facilitate this, the Company’s employees are offered ‘time off in lieu’ to enable their
donation of time and effort towards charitable and environmental causes and it continues its commitment to the
Armed Forces through the formal registration of an Armed Forces Covenant Pledge with the UK Government.
The Directors also consider the impact on the environment through technological advancement in design and in
their selection of assets (e.g. aircraft for purchase or lease).
Since 2018 the Group has commissioned an independent external organisation, Carbon Footprint Ltd, that
continues to assess its annual Greenhouse Gas (“GHG”) Emissions. The 2023 status on the matter is set out in
the Corporate Social Responsibility section of this Annual Report.
17
GAMA AVIATION PLC SECTION 172 STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
The Company’s strategy targeted at achieving Net Zero by 2050 is updated every year based on the Group’s
GHG performance and any prevailing changes in the macro political, technological or legislative environment that
may affect that target. Additionally, waste recycling schemes are implemented throughout the Company’s
operations and electric car leasing options are sourced through preferred suppliers to enable employee
participation in limiting environmental impact and for the Company to drive progress on climate ambitions and
emission reduction.
s. 172 (e) The desirability of the Company maintaining a reputation for high standards
of business conduct
The Company remains committed to maintaining the highest standards of integrity, honesty, and fairness in our
dealings with all our stakeholders. This corporate culture based on shared values and behaviours expected of our
employees, partners, consultants and workers based on the Employee Handbook and Code of Ethics (the
“Code”). The Code underpins the Company’s values and the way it conducts business. Employees are required
to formally confirm their compliance with the Code through an annual compliance declaration whilst the contractual
compliance is required of the Company’s partners, consultants and suppliers.
The Company devotes significant resources to ensure full compliance with laws and regulations and in 2023 had
in place and re-evaluated the compliance measures in relation to:
The Data Protection Act 2018
UK Bribery Act 2010 (and Foreign Corrupt Practices Act in the US)
The Sanctions and Anti-Money Laundering Act 2018 (including associated regulations applicable to the
United States and the European Union)
Cyber security policies
Health & Safety legislation relevant to the aviation industry, and
all applicable Air Operations, Airworthiness and Engineering regulations, including UK and EASA,
including regulations relating to offshore operations.
The Company maintains an online whistleblowing service available for employees to report any wrongdoing and
regularly audits compliance in all its operations.
s. 172 (f) The need to act fairly between members of the Company
The Company, through its Directors, recognised the importance of acting fairly between all the shareholders and
managing any potential conflicts of interest during its decision-making process in 2023.
All decisions (strategic, transactional, financial or otherwise) were reached following the Board’s objective and
careful appraisal of whether a particular course of action would benefit shareholders as a whole and with a view
to maximising shareholder return on investment. Objectivity and conflicts of interest that may have arisen between
major shareholders, were maintained through the advice and guidance of the Independent Non-Executive
Directors, as well from its external advisors.
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GAMA AVIATION PLC GOVERNANCE
FOR THE YEAR ENDED 31 DECEMBER 2023
Governance
Environmental, Social and Governance Report
Directors’ Report
19
GAMA AVIATION PLC GOVERNANCE
FOR THE YEAR ENDED 31 DECEMBER 2023
ENVIRONMENTAL, SOCIAL & GOVERNANCE REPORT
The Group is committed to managing its business responsibly across a wide range of stakeholders by recognising
and mitigating the environmental impact of the Group’s business activities. This requires the Group to explore
every avenue where the business can drive and implement change to the benefit of employees, customers,
shareholders, and to the wider stakeholder groups from the local communities, of which it is a part.
Employees
As a service organisation, the Group’s employees are the backbone to its business model. Nurturing and
developing those teams is therefore a primary concern and as such, the Group makes every effort to maintain a
safe, caring, and balanced, high-performance culture. To achieve this the Group takes, amongst other things, a:
Rigorous approach to safety and occupational health (both physical and mental health),
Keen interest in the personal development of our employees through training and education,
Proactive approach to developing people’s careers; developing a clear understanding of their
development goals and allowing them to access opportunities available within our global organisation,
and
Proactive approach to vitality, providing regionally appropriate employee benefits that encourage our
people to maintain their overall wellbeing.
Ethical business practices and good governance
Good ethical practice and governance requires continual attention. The standard the Group expects from
employees, its business operations and supply chain should not only comply with the spirit, but also the letter, of
the legislation that is in effect across those jurisdictions in which the Group resides. As such, the Group operates,
amongst other things:
Regular review of our processes, policies, and controls,
Risk management framework to ensure risks are identified and appropriate controls are implemented
across the business,
A Procurement Charter which seeks to encourage good Social Value behaviours through our supply
chain, particularly regarding employment and labour practices,
Comprehensive legal compliance framework and audit schedule to ensure compliance obligations are
met, and
Programme of development to ensure business continuity and responsible growth based on ethical
business practices and associated codes of conduct.
Environmental footprint
The Group seeks to undertake its business activities in an environmentally responsible manner. As such, the
Group aims to comply with the letter, and spirit, of the prevailing environmental legislation in order that our
business operations do not have a significant adverse effect on the natural environment. In view of this, we
support:
The UK government’s Streamlined Energy and Carbon Reporting (SECR) and Energy Savings
Opportunities Scheme (ESOS) requirements,
The development of ground and flight procedures to minimise noise, carbon, and nitrogen oxide
emissions, while maintaining the highest safety standards,
A Procurement Charter which seeks to encourage good Social Value behaviours through our supply chain
particularly regarding environmental and greenhouse gas reduction practices,
The continual mission to remove single-use plastics and engaging in waste and paper recycling schemes
throughout our operations, limiting our environmental impact as best we can, and
Employee volunteering days that support local environmental projects and other community causes.
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GAMA AVIATION PLC GOVERNANCE
FOR THE YEAR ENDED 31 DECEMBER 2023
Supporting communities
The Group plays an active role in a variety of communities; whether creating new employment opportunities
through our growth or developing new supply chains with local business. The Group looks to create closer links
with community members via a range of social, economic, and environmental activities which include:
The provision of apprenticeships and work experience in non-sensitive areas of our business,
The employment of ex-service personnel. The Group is a proud signatory of the Armed Forces Covenant
and is expected to reach the standard of the Silver Award within the next 18 months,
Participation with local enterprise councils and chambers of commerce,
Charitable sponsorship and support at national and local level, and
Active participation within regional and national trade bodies.
The Group’s Task Force on Climate-related Financial Disclosures (TCFD)
Since our first greenhouse gas emissions audit in 2018, we have sought to introduce greater transparency and
accountability into the Group. Despite operating in an acknowledged hard to abate industry we are making
progress and are optimistic of attaining our goals.
Alignment Status
The following table provides a summary of our current alignment with TCFD recommendations.
TCFD pillar
Recommended disclosure
Current Status
Alignment
Governance
Board’s oversight of climate-
related risks and
opportunities.
Provided within the Group Risk Register, such
that the Board have full oversight of the potential
commercial, reputational and operational impact
of those risk and the cost to mitigate.
Fully aligned but
evolving in line
with the Group’s
wider strategy.
Strategy
Management’s role in
assessing and managing
climate-related risks and
opportunities.
Climate-related risks and
opportunities identified over
the short, medium, and long
term.
Impact of climate on the
organisation’s businesses,
strategy, and financial
planning.
Resilience of the strategy,
taking into consideration
different climate-related
scenarios.
Provided within the Group and contract risk
registers. Mitigation is outlined within Group and
contract business continuity plans. Business
continuity plans will be revised in 2024 with the
support of our insurers.
Recognised and acted upon particularly with the
Group’s shift away from traditional business
aviation services (aircraft management) into a
larger Special Mission and support services
business.
Aligned and
evolving.
Aligned and
evolving.
Understood and developing. Mitigating steps
have been made in the shift of centre of gravity
for the Group.
Aligned and
evolving within the
five-year strategy.
Tactically this is being considered at the
business continuity planning level. The inherent
mobility of operations does allow for greater
resilience however more work is being
undertaken to review supply chain impacts.
Aligned and
evolving within the
five-year strategy.
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GAMA AVIATION PLC GOVERNANCE
FOR THE YEAR ENDED 31 DECEMBER 2023
Risk
Management
Processes for identifying and
assessing climate-related
risks.
Metrics &
Targets
Processes for managing
climate-related risks.
How such processes are
integrated into overall risk
management.
Metrics used by the
organization to assess
climate-related risks and
opportunities.
Scope 1, Scope 2, and, if
appropriate, Scope 3
greenhouse gas emissions.
Targets used by the
organisation to manage
climate-related risks and
opportunities.
Currently reviewed at the micro and macro level.
Further work is required on the forecasting /
trend analysis for risks and opportunities i.e. the
effect of wildfires and smoke. Trend analysis of
these risks will be commenced in 2024 using
industry and open-source data.
Evolving
Established and mature processes that integrate
climate risks into the wider risk register and
overall risk management.
Aligned
Metrics are contained at the contract level (some
clients) and at the Group level through our
published Journey to Net Zero carbon reduction
plan. The metrics are evolving according to UK
legislation, changes in Social Value policy and
the maturity / availability of mitigating
technologies.
GHG emissions have been benchmarked since
2018 using the SECR methodology. The Group
have determined to use the SECR methodology
across all operations including non-UK business
entities.
Our targets are set through our Journey to Net
Zero carbon reduction plan. These targets are
evaluated annually and aligned to our five-year
strategic planning cycle. Additionally, it is
common to have specific contractual KPIs for UK
government contracts using the Social Value
construct.
Evolving
Aligned
Aligned
Governance
Our governance of climate-related matters is delegated, closely following the Group’s established model. Roles
and responsibilities are defined as below:
Board of Directors: Reviews the corporate risk register and approves mitigating strategies and overall risk
appetite. This includes those related to sustainability and climate. Due to the lack of available Committee
time, the Board has delegated the role of the Corporate Social Responsibility (CSR) Committee to EXCO
(at the behest of the EXCO members), this was ratified on the 2 December 2023.
Chief Executive Officer: Is the sponsor of our sustainability and climate-related strategy. Actions relating
to mitigating strategies are delegated to the Chief Compliance Officer and the strategic business unit
Managing Directors. The CEO chairs EXCO.
Chief Compliance Officer. Is the owner of the Group Risk Register, providing the oversight and delegation
of responsibility to mitigate risks. Updates the Board in relation to all risks including material sustainability
and climate issues and decisions. Reports to the CEO and Board.
EXCO team. Led by the CEO, the team contains the strategic business unit MDs and Group Function
heads. The team has responsibility for implementing strategy, company targets, including climate-related
targets, and reporting on progress to the CEO.
Chief Marketing Officer. Sets the strategic direction for Project Element Six. Leads environmental and
social value related proposals at the EXCO and contract level. Reports to the CEO.
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GAMA AVIATION PLC GOVERNANCE
FOR THE YEAR ENDED 31 DECEMBER 2023
Head of Safety. Is responsible for ISO14001:2019 compliance of the Group’s environmental management
systems which include those relating to sustainability and climate issues. Reports to the CCO.
Strategy
In 2019, the Group set the following aims in its Carbon reduction plan, Journey to 2050. From the start we
acknowledged that while our business has cause to address its own emission profile, substantial work would need
to be undertaken to move the needle in scope 3 emissions related to our clients’ use of their aircraft.
This remains the case and unless legislation forces a more immediate change, innovations in fuel technology,
fleet replacement cycles and substitute technologies remain central to our ability to realise our Net Zero ambition.
The three pillars of our strategy are as below.
Change our behaviour and lead by example.
Reduce our own Group’s Scope 1,2 and 3 GHG emissions, mitigating those that remain by using
responsible environmental and/or community schemes that work in accordance with our ESG goals.
Influence the behaviour of our clients.
Reduce, wherever possible, customer demand-initiated Scope 3 GHG emissions through the
incorporation of changes in flight operations, ground operations or any other areas that may reduce fuel
burn without compromise to safety.
Use environmental and/or community schemes to mitigate customer demand-initiated Scope 3 GHG
emissions, should the prevailing technologies of the planning period be unable to provide the reduction
in C02e forecast.
Support and enable substitute technologies.
Positively influence and encourage the adoption of new, enabling technologies, that are commercially
available / feasible to reduce customer demand-initiated Scope 3 GHG emissions.
Support new and enabling technologies that seek to reduce GHG emissions across the wider aviation
sector.
Delivering change. Project Element Six
The Board acknowledges the efforts by the Business Leadership to adapt to a low GHG emission environment in
line with our published Carbon Reduction Plan, Journey to 2050. For the Leadership to continue to deliver Project
Element Six with the agility required, the CSR Committee has devolved its responsibilities (ratified on 2 December
2023) to the Executive Committee (EXCO).
The EXCO is formed by the Executive plus the leadership of the SBUs and Group functions. Over the course of
2024 the EXCO will continue, via Project Element Six, to:
Improve audit accuracy and data such that the Group has, in the future, a near real time view of carbon
emissions which is reported through the current quarterly business review cycle.
Fix, optimise or add policies/processes and changes in procurement practice that seek to lower the
Group’s scope one, two and three emissions through change.
Further promote the ability to mitigate GHG emissions for all charter flights booked with us.
Include as standard, the option to mitigate all GHG emissions within all new aircraft management
contracts.
Include as standard, the option to mitigate all GHG emissions within all UK Government contracts and /or
use Project Element Six as the delivery mechanism to achieve this.
Review, aid and partner with low carbon technologies (fuels, engines, systems) that may substitute
current technologies to achieve a low carbon future.
Risk management
Being a 40-year-old business and operating within a safety critical environment, the Group has a mature process
for managing risks and opportunities, through which climate related risks have been adopted. As such, climate-
related risks and opportunities are included as part of the formal review of the Group Risk Register, as conducted
by the Chief Compliance Officer. Any deviation is then reported at the quarterly Board meetings. Inputs include,
but are not limited to, the following:
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GAMA AVIATION PLC GOVERNANCE
FOR THE YEAR ENDED 31 DECEMBER 2023
Internal process requires all contracts to be assessed on a quarterly basis. During these quarterly
business reviews risks are reviewed alongside mitigating actions. Depending on severity and trend these
may be elevated to the Group Risk Register.
Safety Review Board sits to assess primarily aviation safety on the ground and in the air. Climate change
induced weather events are understood, particularly their effect on mission viability, ground infrastructure,
logistics, etc.
Compliance and Assurance team’s monitoring of legislation, particularly that associated with air
operations issued by the Civil Aviation Authority. The team also monitors changes in the approvals
provided by aircraft and engine manufacturers with respect to SAF fuels and blend ratios. Both are critical
to manage the risks surrounding airworthiness of our clients’ aircraft.
Climate risk assessment
Our evaluation of strategic risks is based on a rolling five-year timeline corresponding to the strategic planning
cycle of the business. Our risk climate risk forecast can be summarised in the following way:
Principle risk status
Risk overview
Low but increasing
Climate related weather effects increase insurance premiums for ground
infrastructure due to the threat of flooding, high winds or other storm damage.
Movement of people and supply chain across the UK due to weather effects.
Delays lead to erosion of aircraft availability which is often a contractual KPI of
which penalties may apply.
Legislative environment shifts increasing taxation on business aviation
movements prior to there being credible alternate fuels or technologies.
The delivery of the interim SAF fuel technologies is delayed through a lack of
demand from major airlines, leading to poor availability for sub-scale volume
users.
Climate risk as a subset of risk management
Our policy is to consider climate-related risks in the same way as any other risk type. This allows all risks to be
evidenced and evaluated using the following evaluation process.
Impact to the business.
Likelihood of occurrence.
Relative risk weighting.
Likely mitigating actions to prevent the risk occurring or reduce the observed risk.
Cost of those actions.
Impact to the business having taken the mitigating action.
Climate-related risks are not associated as an area per se (the primary areas being Commercial, Financial, Legal
& Contractual, Technical, Operational and Safety) but are treated as identifiable risks within these areas. For
example, in Operational, the risk would be a facility suffering localised flooding.
Resilience management
Climate change induced weather events will have a primary effect on business continuity planning (BCP). This
has implications for:
Aviation operations, particularly those within the special mission strategic business unit.
Ground infrastructure, due to wind, flooding and snow.
Logistics and the weather’s effect on the global supply chain.
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GAMA AVIATION PLC GOVERNANCE
FOR THE YEAR ENDED 31 DECEMBER 2023
The Group recognises these emerging risks and is improving its resilience management through:
Regular reviews of business continuity planning at a contract level.
A review of the Group’s current business continuity plan with the co-operation of the Group’s insurers.
Metrics and targets
Our climate-related metrics are summarised below and published each year in our streamlined energy and carbon
report (SECR) as well as our energy savings opportunity scheme (ESOS) and Carbon Reduction Plan. Journey
to 2050 (as available on our website).
Total CO2 emissions (tonnes) (scope 1, 2 & 3 including client emissions)
Total CO2 emissions (tonnes) (scope 1, 2 & 3 excluding client emissions)
Total energy consumption
Tonnes of CO2e per employee
Additionally,
Maintenance of our ISO 14001:2019 accreditation and reduction of annual audit findings.
Adherence to the objectives, actions and requirements of the Social Value Act as required within our UK
government contracts.
Carbon Reduction Plan targets to achieve Net Zero.
TCFD: Streamline Energy & Carbon reporting
The Group has appointed Carbon Footprint Ltd, a leading carbon and energy management company, to assess
independently its GHG emissions in accordance with the UK Government’s “Environmental Reporting Guidelines:
Including Streamlined Energy and Carbon Reporting Guidance”.
The Group’s definition of its carbon footprint for SECR
For the purposes of the SECR report, the Group has defined its carbon footprint as a measure of the impact its
activities have on the environment in terms of the amount of greenhouse gases produced, measured in units of
carbon dioxide equivalents (CO2e). The Group’s carbon footprint is therefore made up of two parts, direct and
indirect emissions.
Direct emissions
Direct emissions are produced by sources which are owned or controlled by the reporting organisation and include
electricity use, burning oil or gas for heating, and fuel consumption because of business travel or distribution.
Direct emissions correspond to elements within scopes 1, 2 and 3 of the World Resources Institute GHG Protocol,
as indicated below.
Footprint
Activity
Direct
Electricity, heat or steam generated on-site
Natural gas, gas oil, LPG or coal use attributable to Company-owned facilities
Company-owned vehicle travel
Production of any of the six GHGs (CO2, CH4, N2O, HFCs, PFCs and SF6)
Consumption of purchased electricity, heat steam and cooling
Employee business travel (using transport not owned by the Company)
Scope
1
n/a
1
1
2
3
Indirect emissions
Indirect emissions result from a company’s upstream and downstream activities. These are typically from
outsourced/contract manufacturing, and products and the services offered by the organisation. Indirect emissions
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GAMA AVIATION PLC GOVERNANCE
FOR THE YEAR ENDED 31 DECEMBER 2023
correspond to scope 3 of the World Resources Institute GHG Protocol excluding employee business travel (these
are included within direct emissions controlled by the reporting organisation).
Footprint
Activity
Employee commuting
Transportation of an organisation’s products, materials or waste by another
organisation
GHG emissions from waste generated by the organisation but managed by
another organisation
Indirect
GHG emissions from the use and end-of-life phases of the organisation’s products
and services
GHG emissions arising from the production and distribution of energy products,
other than electricity, steam and heat, consumed by the organisation
GHG emissions from the production of purchased raw or primary materials
GHG emissions arising from the transmission and distribution of purchased
electricity
Scope
3
3
3
3
3
3
3
The data has been collected on a best endeavours basis for 2023 based on fluctuations in staffing, facilities and other factors due to the
ongoing integration of the two operations. On 18th October 2023 the Group announced the divestment of the Jet East business after which
CO2 emissions reporting was curtailed.
Based on the above classifications the Group’s GHG emissions have been assessed by Carbon Footprint Ltd
following ISO 14064-1:2018, using the 2022 emission conversion factors published by Department for
Environment, Food and Rural Affairs (DEFRA) and the Department for Business, Energy & Industrial Strategy
(BEIS).
Although not required to meet the SECR legislation, the Group is reporting CO2 emissions for scope one and two
as well as reporting additional scope three emissions (the scope two assessment follows the location-based
approach for emissions from electricity usage). The Group’s reporting extends to all operations of the business
including its wholly owned business interests in the USA, UK, and Middle East.
Treatment of scope three, indirect emissions
Having received advice from Carbon Footprint Ltd, the Group’s ISO14064-1:2018 audit partner, it has further
delineated scope three, indirect emissions, into two broad categories these being:
Scope three items indirectly associated with the delivery or growth of the Group’s operations (business
travel, home working, etc). The Group believes these items are directly related to its business activities
and therefore should be included within our carbon footprint assessment even if that is beyond the current
SECR requirement, and
Scope three items associated directly with demand instigated by a customer, this being mainly
downstream aircraft fuel consumption. The Group recognises and records these CO2 emissions and will,
given the limitations of the current engine, fuel and associated technologies, work with its customers to
limit and mitigate these emissions through its best endeavours.
2023 Greenhouse Gas emissions
As the balance of the business alters away from, a large Business Aviation managed fleet to a smaller Special
Mission fleet, subsequent Scope 3 customer aircraft fuel consumption can be evidenced. Of the Special Mission
fleet, all aircraft (other than those allocated under the Bond Helicopters joint venture) are exempt from UK
emissions legislation as they are performing air ambulance or national security roles. Although these aircraft are
exempt, the Scope 3 customer aircraft fuel consumption does recognise their emissions.
26
GAMA AVIATION PLC GOVERNANCE
FOR THE YEAR ENDED 31 DECEMBER 2023
GHG emissions for reporting year: 1 January 2023 to 31 December 2023 and comparatives
Scope
Activity
Site gas oil
Site gas
Scope 1
Van travel and distribution
Company vehicles
Vehicle fuel
Scope 1 Sub Total
Scope 2
Electricity generation
Scope 2 Sub Total
T CO2e
T CO2e
TCO2e
TCO2e
2023
2022
2021
2020
63
30
68
5.8
53
220
614
614
59
18
29
32
71
344
139
34
21
-
406
154
32
8
-
209
538
600
1,306
1,659
2,086
1,306
1,659
2,086
Customer aircraft fuel consumption (downstream)
27,872
36,874
29,184
21,845
Business travel
Scope 3
Home workers (UK only)
Electricity transmission and distribution
Other1
Scope 3 Sub Total
Total
2,257
251
344
0.2
298
3
126
1,330
1,360
23
90
69
210
144
114
55
31,757
38,614
29,710
22,368
32,5912
40,1292
31,9072
25,054
1 Includes commuting, grey fleet, hotel stays, hire cars, air freight, taxi, rail, lorry freight, scope 1 & 2 WTT.
2 The data for Jet East, which was purchased by the Group in January 2021, has been collected on a best endeavours basis since its
incorporation into the Group. On October 18th 2023, Jet East was divested from the Group and all US GHG reporting was curtailed.
Total scope 1,2 and 3 including customer aircraft fuel consumption for 2023
Consumption / emissions
Total tonnes of CO2e
Total Energy Consumption (kWh)1
Tonnes of CO2e per tonne of jet fuel
Tonnes of CO2e per £m turnover2
Scope 1,2,3 excluding customer aircraft fuel consumption
Consumption / emissions
Total tonnes of CO2e excl. customer aircraft fuel consumption
Tonnes of CO2e per employee3
2023
32,591
109,549,643
6.8
147.3
2023
4,719
2.74
1 Total Energy Consumption includes Electricity, Site Gas, Site Gas Oil, Company Owned Vehicles, Grey-Fleet and Customer Aircraft
Fuel Consumption.
2 32,591 / (Revenue of $274.4m)/1.24) (includes revenue from discontinued operations)
3 Average of 1400 full-time employees to 1 November 2023 (not including contractors or temporary staff). This figure was reduced by c800
employees on the sale of Jet East.
Primary intensity ratio comparator
Companies complying with SECR must include at least one intensity ratio in their report. An intensity ratio is a
way of defining your emissions data in relation to an appropriate business metric, such as tonnes of CO2e per
27
GAMA AVIATION PLC GOVERNANCE
FOR THE YEAR ENDED 31 DECEMBER 2023
sales revenue, or tonnes of CO2e per total square metres of floor space. This allows comparison of energy
efficiency performance over time and with other similar types of organisation.
The Group has determined that it will use tonnes of CO2e per employee as its primary intensity ratio going forward.
Tonnes of CO2e will use scope 1 and scope 2 plus the previously defined treatment of scope 3 that excludes
customer aircraft fuel consumption.
Tonnes of CO2e1 per employee2
2023
3.37
2022
2.64
2021
2.42
2020
4.41
1 Based on the total tonnes of CO2e excluding customer aircraft fuel consumption.
2 Average of 1400 full-time employees to 1 November 2023 (not including contractors or temporary staff). This figure was reduced by c800
employees on the sale of Jet East.
Group energy consumption
Total energy consumed by the Group in scopes 1 and 2 is expressed within the table below:
Total energy consumed per emissions scope
Activity
2023
2022
2021
2020
UK Operations Scope 1 & 2 energy consumed (kWh)
4,001,003
3,530,697
3,180,807
5,754,805
Total Scope 1 & 2 energy consumed (kWh)
4,908,762
5,679,332
7,542,746
8,779,550
Total energy consumed (all scopes) (kWh)
109,549,643
137,172,478
115,207,192
97,009,229
TCFD: Energy savings opportunity scheme (ESOS)
The Group has appointed Carbon Footprint Ltd, a leading carbon and energy management company, to assess
independently its energy savings opportunity in accordance with the UK Government’s requirements. The ESOS
audit was carried out in accordance with the BS EN 16247-1 2012 guidelines and applies to Gama Aviation’s
UK based operations only.
Opportunity
Up-front cost
Potential energy savings
(kWh/ann.)
Potential cost savings
(£/ann.)
Payback time
Single-engine taxi
FEGP
Negligible
Negligible
Optimisation of Flap Settings Negligible
Optimisation of take-off
speed
Negligible
Fuel Optimisation
Negligible
Record hours/mileage data
for aircraft efficiency
£10,000
Luggage Storage Service
Negligible
>280,000
35,000
25,000
25,000
<705,000
<705,000
<70,500
>£40,000
£5,000
£3,600
£3,600
<£100,000
<£100,000
<£10,000
Total £10,000+
Approx. 1.8m kWh
Approx £260,000
<1 year
<1 year
<1 year
<1 year
<1 year
<1 year
<1 year
<1 year
Note: Safety remains the overriding priority for the Group. While the above are noted those items that are related to flight are to be fully
reviewed prior to implementation. Once implemented, the Captain will retain full operational control of all phases of the flight and may
determine for safety purposes not to implement the opportunities as stated above due to external environmental conditions.
TCFD: CORSIA and ETS commitment
Under the UK and EU ETS, airlines are required to report, verify, and offset their emissions by submitting carbon
allowances to the relevant Environment Agencies. Due to changes in the structure of the business, most flight
hours are conducted via our Special Mission strategic business unit. These flights are for the purpose of delivering
air ambulance or UK Government missions and are currently exempt from the UK ETS scheme.
Business Aviation flying (charter and aircraft management) remains under the threshold for procuring carbon
credits or procuring SAF (as a substitute to carbon credits).
28
GAMA AVIATION PLC GOVERNANCE
FOR THE YEAR ENDED 31 DECEMBER 2023
We did not incur a liability under CORSIA which remains in its pilot phase.
TCFD: statement on the use of offset schemes
In previous years the Board have agreed to the offsetting of emissions (excluding customer aircraft fuel
consumption) through a variety of offshore reduction schemes. In 2023, a review took place of that policy by the
Leadership team to determine better ways to alleviate the Group’s GHG emissions while developing our ambitions
in Project Element Six, specifically the review, aid and partner with low carbon technologies (fuels, engines,
unmanned systems) that may substitute current technologies to achieve a low carbon future.
As a consequence of that review, the following actions have taken/are taking place which are audited under
ISO14001:2019:
The CSR committee for 2024 has been devolved from the Board to the Leadership. The committee will
be chaired by an Executive and will be comprised of EXCO members.
Project Element Six (workstreams 1 – 5) are to be embedded into Special Mission contract bids from 1
January 2024. On winning the bid, Project Element Six will be embedded into the delivery of that service
for the period of the contract (typically 5 to 7 years).
Improvements in GHG data will be provided to clients within Quarterly Business Reviews as will progress
on workstreams 1 – 5 of Project Element Six.
Offsetting schemes will no longer be continued, with a greater focus being placed on local community
schemes, local environmental improvements and providing habitats and pollinators to improve ecological
diversity.
29
GAMA AVIATION PLC GOVERNANCE
FOR THE YEAR ENDED 31 DECEMBER 2023
DIRECTORS’ REPORT
The Directors present their report together with the audited Consolidated Financial Statements for the year ended
31 December 2023.
Gama Aviation Plc (the “Company”) is incorporated, registered, and domiciled in England in the United Kingdom.
The address of the registered office of the Company is 1st Floor, 25 Templer Avenue, Farnborough, Hampshire,
England, GU14 6FE.
The review of the business, future developments, and outlook are contained within the Strategic Report and are
incorporated into the Directors’ Report by cross reference.
Information about the use of financial instruments by the Company and its subsidiaries, and financial risk
management policies, are given in note 37 to the Consolidated Financial Statements.
Principal activities
The Group delivers a comprehensive array of high value aviation services through three distinct market facing
strategic business units being Business Aviation, Special Mission, and Technology & Outsourcing. These services
include aviation design, operational management, charter and air ambulance services, fixed based operations,
maintenance, software, and trip planning and support.
The Directors believe that, by promoting the Company’s key values, which are innovation, commitment, care for
people, responsibility, pragmatism, execution, ambition and resilience, the Company can continue to build
customer confidence and ensure safety that are considered essential elements in the transformation and
execution of the Company's strategy.
The provision of essential services to the healthcare industry, and connecting people, businesses and countries,
enables the Company to provide the jobs, prosperity, cultural and community benefits that air transportation
enhances. Several new initiatives and projects were launched during the year to achieve the growth of the
Company and the sale of the Jet East business in the United States will provide the Company with the wherewithal
to invest further in its Special Mission, Technology & Outsourcing and Business Aviation strategic business units.
Employees
Our people, which includes contractors as well as direct employees, are at the heart of the Company’s business
and are a key resource to delivering the strategy and vision. The average monthly number of employees during
the year ended 31 December 2023 was 1,450 (2022: 1,233).
In addition to the company’s investment in recruitment, the Company continues to improve on and retain talent
within the organisation through its recruitment process, and encourages the culture of learning, development and
career advancement of our employees through training and mentoring initiatives.
In 2023, the Company was able to promote 5 employees through their mentoring and development programmes.
The Company’s policies ensure equal opportunities designed to ensure that all job applicants capable of
performing the role advertised are treated equally regardless of their age, sex, race, disability, sexual orientation
or any other personal characteristic that could be considered a form of discrimination and all employees are
treated equally in terms of training, career development and promotion. Where employees develop a disability
during their employment the Company will actively seek to retain them wherever possible by adjusting their work
content and environment, or by retraining them to undertake new roles.
Effective communication of Group-wide information and recognition of employee contributions are facilitated via
the Company’s intranet and email systems as well as through regular local management and Town Hall meetings
to enable the flow of information and the sharing of skills and ideas through different departments and regions
and to help ensure employee engagement.
The Company also provides a variety of employee incentives such as performance-related bonus arrangements
and long-term share option plans for qualifying staff, which serve to encourage staff interest in the Group’s
30
GAMA AVIATION PLC GOVERNANCE
FOR THE YEAR ENDED 31 DECEMBER 2023
performance in addition to Wellbeing initiatives that include medical insurance and mental health support as well
as financial wellbeing and retirement planning initiatives for employees.
A confidential reporting procedure is available for employees to report any concerns.
Engagement with employees and wider stakeholders
The Section 172 statement provide further details on engagement with employees on pages 16 to 18.
The Company has also taken into account and fostered its relationships with wider stakeholders including
investors, customers, suppliers, in its principal decisions during the financial year. Further details on the
Company’s engagement with and decision making influenced by its wider stakeholders has been included within
the Section 172 statement on pages 16 to 18.
Directors
The Directors who held office during the year and up to the date of this report, unless otherwise stated, were as
follows:
M Khalek
S Wright
M Williamson
Chi Keung (Simon) To (resigned 29 May 2024)
P Brown (resigned 31 May 2024)
S Mount (resigned 31 May 2024)
Our Directors’ powers are determined by UK legislation and our Articles of Association, which contain rules about
the appointment and replacement of Directors
Qualifying third party indemnity provisions
The Company has granted an indemnity to one or more of its Directors against liability in respect of proceedings
brought by third parties, subject to the conditions set out in Section 236 of the Companies Act 2006. Such
qualifying third-party indemnity provision remains in force as at the date of approving the Directors’ Report.
The indemnification for Directors provided by the Company has been arranged in accordance with the Company’s
Articles and the Companies Act 2006. As far as is permitted by legislation, all officers of the Company are
indemnified out of the Company’s own funds against any liability incurred while conducting their role in the
Company, unless such liability is to the Company or an associated company.
The Company has appropriate Directors’ and Officers’ Liability insurance cover in place in respect of any legal
action against, among others, its Directors.
Going concern
The Director’s considerations and assessment in relation to going concern are contained in note 3 to the financial
statements.
Dividends
The Board does not recommend a dividend for 2023 (2022: nil pence per share).
On 29 April 2024 the Company announced the return of up to £32.6 million to Shareholders by way of a tender
offer at 95p per share. This was approved at an Extraordinary General Meeting held on 15 May 2024. On 24 May
2024 the Company announced that it had received valid tenders in respect of 25,168,934 Ordinary Shares,
representing approximately 38.82 per cent of the issued share capital of Gama Aviation. As a result, £23.9m was
returned to shareholders.
31
GAMA AVIATION PLC GOVERNANCE
FOR THE YEAR ENDED 31 DECEMBER 2023
Post balance sheet events
These are detailed in note 40 of the Consolidated Financial Statements.
Future business developments
Further details on these are set out in the Strategic Report on pages 1 to 18.
Streamlined Energy and Carbon Report
The Group’s Streamlined Energy and Carbon Report for 2023 is contained within the Environmental, Social and
Governance section of this Annual Report on pages 20 to 29.
Charitable and political donations
Group donations to charities worldwide were $5,246 (2022: $3,954).
No political donations were made during the year (2022: $nil).
Research and development
The Group carries out research and development activities to support its suite of business aviation software
solutions.
Financial risk management
The Group’s financial risk management objectives and policies, including its use of financial instruments, are set
out in note 37 to the Group’s Consolidated Financial Statements.
The existence of branches outside the United Kingdom
The Group’s activities in overseas jurisdictions are carried out through subsidiary companies. The Company does
not have any branches outside the United Kingdom.
Statement of Directors’ responsibilities
The Directors are responsible for preparing the Annual Report and the Group and Parent Financial Statements in
accordance with applicable law and regulations.
Company law requires the Directors to prepare the Group and Parent Financial Statements for each financial
year. Under that law, they are required to prepare the Group Financial Statements in accordance with U.K.
adopted International Accounting Standards in conformity with the requirements of the Companies Act 2006 and
applicable law. The Directors have elected to prepare the Parent Financial Statements in accordance with United
Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 101
Reduced Disclosure Framework, and applicable law).
Under company law, the Directors must not approve the Financial Statements unless they are satisfied that they
give a true and fair view of the state of affairs of the Group and Parent Company, and of their profit or loss for that
period. In preparing each of the Group and Parent Company Financial Statements, the Directors are required to:
Select suitable accounting policies, and then apply them consistently,
State whether the Group Financial Statements have been prepared in conformity with U.K. Adopted
International Accounting Standards in conformity with the requirements of the Companies Act 2006,
State whether the Parent Financial Statements have been prepared in accordance with United Kingdom
Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 101
Reduced Disclosure Framework, and applicable law) in conformity with the requirements of the
Companies Act 2006,
Make judgements and estimates that are reasonable, relevant, and reliable,
32
GAMA AVIATION PLC GOVERNANCE
FOR THE YEAR ENDED 31 DECEMBER 2023
Assess the Group and Parent Company’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern, and
Use the going concern basis of accounting unless they either intend to liquidate the Group or the Parent
Company, or to cease operations, or have no realistic alternative but to do so. As explained in note 3 of
the Consolidated Financial Statements, the Directors believe the going concern basis to be appropriate
and the Financial Statements have been prepared on that basis.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the Group’s and Company’s transactions and disclose with reasonable accuracy at any time the financial position
of the Group and Company and enable them to ensure its Financial Statements comply with the Companies Act
2006. They are responsible for such internal control as they determine is necessary to enable the preparation of
the Financial Statements that are free from material misstatement, whether due to fraud or error, and have general
responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group, and to
prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report and
Directors’ Report that complies with that law and those regulations.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included
on the Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of
Financial Statements may differ from legislation in other jurisdictions.
Each Director in office at the date the Directors’ Report is approved confirm that, to the best of their knowledge:
The Financial Statements, prepared in accordance with the applicable set of accounting standards, give
a true and fair view of the assets, liabilities, financial position, and profit or loss of the Parent Company
and the undertakings included in the consolidation taken as a whole, and
The Strategic Report and Directors’ Report include a fair review of the development and performance of
the business and the position of the Company, and the undertakings included in the consolidation taken
as a whole, together with a description of the principal risks and uncertainties that they face.
Statement on disclosure to Auditors
In the case of each Director in office at the date the Directors’ Report is approved:
So far as the Director is aware, there is no relevant audit information, that would be needed by the Group’s
and Parent Company’s Auditors in connection with preparing their Audit Report (which appears on pages
35 to 38), of which the Group’s and Parent Company’s Auditors are not aware, and
In accordance with Section 418(2) of the Companies Act 2006, he has taken all reasonable steps that he
ought to have taken as a Director to make him aware of any such information, and to ensure that the
Group’s and Parent Company’s Auditors are aware of such information.
Auditors
The auditor, Crowe U.K. LLP, will be proposed for appointment by the members of the Company in accordance
with Section 489 of the Companies Act 2006.
Approval of Directors’ Report
This Directors’ Report was approved for and signed on behalf of the Board by:
Michael Williamson
Director
12 June 2024
33
GAMA AVIATION PLC FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Financial statements
Independent auditor’s report
Consolidated income statement
Consolidated statement of comprehensive income
Consolidated balance sheet
Consolidated statement of changes in equity
Consolidated cash flow statement
Notes to the financial statements
Parent company balance sheet
Parent company statement of changes in equity
Notes to the parent company financial statements
34
INDEPENDENT AUDITOR’S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Independent Auditor’s Report to the Members of Gama Aviation Plc
Opinion
We have audited the financial statements of Gama Aviation Plc (the “Parent Company”) and its subsidiaries (the
“Group”) for the year ended 31 December 2023, which comprise:
the Consolidated income statement and Consolidated statement of comprehensive income for the year
ended 31 December 2023;
the Consolidated and Parent Company balance sheets as at 31 December 2023;
the Consolidated and Parent Company statements of changes in equity for the year then ended;
the Consolidated cash flow statement for the year then ended; and
the notes to the financial statements, including material accounting policies.
The financial reporting framework that has been applied in the preparation of the Group financial statements is
applicable law and UK-adopted international accounting standards. The financial reporting framework that has
been applied in the preparation of the Parent Company financial statements is applicable law and United Kingdom
Accounting Standards, including Financial Reporting Standard 101 Reduced Disclosure Framework (United
Kingdom Generally Accepted Accounting Practice).
In our opinion:
the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s
affairs as at 31 December 2023 and of the Group’s profit for the year then ended;
the Group financial statements have been properly prepared in accordance with UK-adopted international
accounting standards;
the Parent Company financial statements have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice; and
the financial statements have been prepared in accordance with the requirements of the Companies Act
2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit
of the financial statements section of our report. We are independent of the Group and the Parent Company in
accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK,
including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with
these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of
accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the Group's and Parent Company’s ability
to continue as a going concern for a period of at least twelve months from when the financial statements are
authorised for issue.
35
INDEPENDENT AUDITOR’S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the
relevant sections of this report.
Other information
The directors are responsible for the other information contained within the annual report. The other information
comprises the information included in the annual report, other than the financial statements and our auditor’s
report thereon. Our opinion on the financial statements does not cover the other information and, except to the
extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears
to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we
are required to determine whether this gives rise to a material misstatement in the financial statements
themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact.
We have nothing to report in this regard.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the Parent Company and their environment
obtained in the course of the audit, we have not identified material misstatements in the strategic report or the
directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires
us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our
audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns;
or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the Statement of Directors’ responsibilities, the directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view, and for such
36
INDEPENDENT AUDITOR’S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
internal control as the directors determine is necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s and the Parent
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend to liquidate the Group or the Parent
Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of these financial
statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures
in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is
detailed below:
We obtained an understanding of the legal and regulatory frameworks that are applicable to the Group
and the procedures in place for ensuring compliance. We focused on those laws and regulations that
have a direct impact on the financial statements. These included the Companies Act 2006 and the
significant country-specific laws and regulations associated with operating in the aviation sector, such as
those issued by the Civil Aviation Authority.
As part of our audit planning process, we assessed the different areas of the financial statements,
including disclosures, for the risk of material misstatement. This included considering the risk of fraud
where direct enquiries were made with management and those charged with governance concerning both
whether they had any knowledge of any actual or suspected fraud and their assessment of the
susceptibility to fraud. We considered the risk to be greater in areas involving override of controls by
management, inappropriate revenue recognition and significant management estimation or judgement,
including the use of alternative performance measures, and estimates or judgements impacting
impairment of goodwill, or which could impact on management bonuses and remuneration. Based on this
assessment we designed audit procedures to focus on these specific areas.
We held discussions with Divisional Management, the Group Legal and Compliance team, and other staff
members outside of the finance function to gain an understanding of areas of fraud risk and any instances
of non-compliance with laws and regulations. We also obtained and inspected correspondence between
the Group and regulatory bodies.
We assessed the design and implementation of controls over significant audit risks and obtained an
understanding of the Group’s financial reporting processes.
We tested the appropriateness of journal entries throughout the year by vouching a risk-based sample of
journals to supporting documentation and explanations.
A detailed review of the Group’s year end adjusting entries was performed. Any items that appeared
unusual in nature or amount were vouched to supporting documentation.
37
INDEPENDENT AUDITOR’S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
We obtained an understanding of the business rationale of significant one-off transactions that are outside
the normal course of business or that otherwise appear to be unusual, including but not limited to the
disposal of the US MRO business.
We communicated relevant procedures to the component auditors to address the risks of management
override, risk of fraud in revenue recognition, and compliance with laws and regulations in our group audit
instructions. We reviewed their reporting on these matters and held discussions on their conclusions.
We performed a detailed review of financial statements disclosures to ensure these were complete,
having regard to the explanations and information received in the course of the audit.
We obtained a list of related parties from management and performed audit procedures to identify
undisclosed related party transactions.
We utilised external confirmations to confirm cash balances, and as part of our revenue testing
procedures. We also obtained letters from the Group’s external counsel.
We considered the narrative and presentation of matters in the front section of the annual report, including
the Group’s use of Alternative Performance Measures and the reconciliation of these items to GAAP
measures.
A further description of our responsibilities for the audit of the financial statements is available on the Financial
Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s
report.
Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members
those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's
members as a body, for our audit work, for this report, or for the opinions we have formed.
Nick Jones (Senior Statutory Auditor)
for and on behalf of
Crowe U.K. LLP
Statutory Auditor
55 Ludgate Hill
London
EC4M 7JW
12 June 2024
38
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
Year ended 2023
Year ended 2022
Note
Adjusted
result1
Adjusting
items1
Statutory
result
$’000
$’000
$’000
Adjusted
result1
$’000
Adjusting
items1
Statutory
result
$’000
$’000
5
147,217
(120,507)
26,710
–
–
–
147,217
167,392
(120,507)
(138,138)
26,710
29,254
–
–
–
167,392
(138,138)
29,254
6
8
12
13
14
7
(30,961)
(11,606)
(42,567)
(26,606)
(4,887)
(31,493)
1,274
–
1,274
(2,977)
(11,606)
(14,583)
1,331
(7,459)
–
–
1,331
(7,459)
4,827
7,475
91
(9,035)
126
(4,761)
–
(75)
4,953
2,714
91
(9,110)
(9,105)
(11,606)
(20,711)
(1,469)
(4,836)
(6,305)
(98)
–
(98)
59
–
59
(9,203)
(11,606)
(20,809)
(1,410)
(4,836)
(6,246)
–
80,223
80,223
–
(2,334)
(2,334)
Continuing operations:
Revenue
Cost of sales
Gross profit
Administrative expenses
Other operating income
Earnings before interest and taxation
Finance income
Finance expense
Loss before taxation
Taxation
Profit/(loss) from continuing
operations
Profit/(loss) after tax from discontinued
operations
Profit/(loss) for the year
(9,203)
68,617
59,414
(1,410)
(7,170)
(8,580)
Attributable to:
Owners of the Company
Non-controlling interests
(8,784)
68,617
34
(419)
–
(9,203)
68,617
59,833
(419)
59,414
(1,691)
(7,168)
(8,859)
281
(2)
279
(1,410)
(7,170)
(8,580)
1
Adjusting items are defined in Note 16 of the notes to the financial statements.
39
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
Loss for the year from continuing operations
Profit/(loss) for the year from discontinued operations
Profit/(loss) for the year
Items that may be reclassified subsequently to profit or loss:
Foreign exchange differences on translation of foreign operations
Other comprehensive profit/(loss) for the year, net of income tax
Note
Year ended 2023
$’000
Year ended 2022
$’000
(20,809)
80,223
59,414
7,196
7,196
(6,246)
(2,334)
(8,580)
(5,158)
(5,158)
Total comprehensive profit/(loss) for the year
66,610
(13,738)
Total comprehensive profit/(loss) is attributable to:
Owners of the Company from continuing operations
Owners of the Company from discontinued operations
Non-controlling interest
34
(13,194)
80,223
(419)
66,610
(11,683)
(2,334)
279
(13,738)
40
CONSOLIDATED BALANCE SHEET
COMPANY NUMBER 07264678
AS AT 31 DECEMBER 2023
Non-current assets
Goodwill
Other intangible assets
Total intangible assets
Property, plant and equipment
Right-of-use assets
Trade and other receivables
Deferred tax asset
Total non-current assets
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Current liabilities
Trade and other payables
Current tax liabilities
Obligations under leases
Provisions
Borrowings
Deferred revenue
Other financial liabilities
Total current liabilities
Total assets less current liabilities
Non-current liabilities
Borrowings
Provisions
Obligations under leases
Trade and other payables
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Note
17
18
19
20
23
15
22
23
24
25
26
27
30
28
31
29
28
30
27
25
15
2023
$’000
18,083
4,458
22,541
17,836
57,075
5,123
657
103,232
4,432
35,282
92,052
131,766
234,998
(35,932)
(26)
(10,676)
(2,078)
(914)
(9,717)
–
(59,343)
175,655
(10,241)
(706)
(63,188)
–
(596)
(74,731)
(134,074)
100,924
2022
$’000
19,176
13,170
32,346
21,794
38,194
1,413
6,100
99,847
7,278
58,271
22,406
87,955
187,802
(46,770)
(533)
(11,053)
(2,250)
(31,225)
(9,214)
(335)
(101,380)
86,422
(4,883)
(885)
(41,628)
(3,663)
(1,206)
(52,265)
(153,645)
34,157
41
CONSOLIDATED BALANCE SHEET
COMPANY NUMBER 07264678
AS AT 31 DECEMBER 2023
Shareholders’ equity
Share capital
Share premium
Other reserves
Foreign exchange reserve
Accumulated earnings
Total shareholders’ equity
Non-controlling interest
Total equity
Note
32
32
32
34
2023
$’000
958
63,712
34,950
(22,684)
24,035
100,971
(47)
100,924
2022
$’000
958
63,712
34,987
(29,880)
(35,992)
33,785
372
34,157
The financial statements on pages 39 to 104 were approved by the Board of Directors and authorised for issue
on 12 June 2024 and are signed on their behalf by:
Michael Williamson
Director
42
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
Share
capital
$’000
Share
premium
$’000
Other
reserves
$’000
Foreign
exchange
reserve
$’000
Accumulated
profit/(loss)
$’000
Total
shareholders’
equity
$’000
Non-
controlling
interest
$’000
Balance at 1 January 2022
954
63,502
34,997
(24,722)
(27,301)
(Loss)/profit for the year
Other comprehensive loss
Total comprehensive (loss)/profit for
the year
Shares issued in the year
Cost of share-based payments (Note 36)
Transfer for lapsed options
–
–
–
4
–
–
–
–
–
210
–
–
–
–
–
–
158
(168)
–
(8,859)
(5,158)
–
47,430
(8,859)
(5,158)
93
279
–
(5,158)
(5,158)
(8,859)
(14,017)
279
(13,738)
–
–
–
–
–
168
214
158
–
–
–
–
214
158
–
Total
equity
$’000
47,523
(8,580)
Balance at 31 December 2022
958
63,712
34,987
(29,880)
(35,992)
33,785
372
34,157
Profit/(loss) for the year
Other comprehensive profit
Total comprehensive profit/(loss) for
the year
Cost of share-based payments (Note 36)
Transfer for lapsed options
–
–
–
–
–
–
–
–
–
–
–
–
–
–
59,833
59,833
(419)
59,414
7,196
–
7,196
–
7,196
7,196
59,833
67,029
(419)
66,610
157
(194)
–
–
–
194
157
–
–
–
157
–
Balance at 31 December 2023
958
63,712
34,950
(22,684)
24,035
100,971
(47)
100,924
43
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
Note
18
19
20
17
18
19
6
7
36
Cash flows from operating activities
Profit/(loss) for the year1
Adjustments for:
Tax credit
Finance income
Finance costs
Amortisation of intangible assets
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Impairment of goodwill
Impairment of intangible assets
Impairment of property, plant and equipment
Impairment of contract assets
Gain on disposal of property, plant and equipment
Gain on disposal of discontinued operations
Forgiveness of PPP loan
Share-based payments
Operating cash inflow before movements in working capital
Unrealised foreign exchange movements
(Increase)/decrease in gross inventories
Increase in inventory obsolescence
(Increase)/decrease in gross receivables
Decrease in loss allowance for receivables
Increase/(decrease) in payables and deferred consideration
Increase in deferred revenue
Increase/(decrease) in provisions
Working capital movements
Cash generated by operations
Tax paid on operating activities
Net cash generated by operating activities
1.
Profit/(loss) for the year includes continuing and discontinued operations
Year
ended
2023
$’000
Year
ended
2022
$’000
59,414
(8,580)
(774)
(1,331)
9,658
3,746
4,900
6,548
2,160
3,341
1,167
1,923
(238)
(83,329)
−
157
7,342
1,481
(1,429)
100
(1,470)
(2,056)
(314)
503
(368)
(3,553)
3,789
(208)
3,581
(885)
(108)
9,945
3,396
5,870
6,001
787
2,640
−
(1,741)
−
(1,000)
372
16,697
(2,107)
1,063
65
2,083
(299)
11,615
1,190
1,164
14,774
31,471
(96)
31,375
44
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
Cash flows from investing activities
Purchases of property, plant and equipment
Purchases of intangibles
Proceeds on disposal of property, plant and equipment
Net proceeds on disposal of discontinued operations
Net cash received in investing activities
Cash flows from financing activities
Lease payments
Interest paid
Proceeds from borrowings, net of loan arrangement fees1
Repayment of borrowings2
Lease payment received
Interest received
Note
Year
ended
2023
$’000
(20,571)
(2,148)
15,057
94,534
86,872
(10,774)
(2,050)
16,014
(25,544)
−
1,222
Year
ended
2022
$’000
(4,011)
(1,829)
27,079
−
21,239
(11,832)
(1,272)
18,690
(46,525)
91
70
Net cash used in financing activities
(21,132)
(40,778)
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of year
Effect of foreign exchange rates
Cash and cash equivalents at the end of year
24
69,321
22,406
325
92,052
11,836
10,243
327
22,406
1.
Proceeds from borrowings represents actual monies received of $16.5m (2022: $19.0m) less arrangement fees paid of $0.5m (2022: $0.3m).
2.
Repayment of borrowings represents total repayments of $41.4m less repayments made as part of disposal of US MRO operations of $15.9m.
45
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1. General information
As at 31 December 2023, Gama Aviation Plc (the “Company”) was a public limited company (company number
07264678) whose shares were listed on the Alternative Investment Market (AIM) of the London Stock Exchange
under the ticker symbol GMAA. As approved by shareholders on 15 May 2024 the Company’s shares were
formally delisted on 31 May 2024, as part of a wider process which saw 25,168,934 Ordinary Shares, representing
approximately 38.82 per cent. of the issued share capital, participate in a tender offer to redeem their shares for
an offer price of 95 pence per ordinary share.
The Company is incorporated and domiciled in England in the United Kingdom. The address of the registered
office is 1st Floor, 25 Templer Avenue, Farnborough, Hampshire, England, GU14 6FE.
The Company, together with its subsidiaries and other related undertakings (the “Group”), is involved in the
provision of aviation services, including aviation design, maintenance, operational management, charter, software
and facilities expertise.
2. Subsidiaries and other related undertakings
Details of the Company’s subsidiaries and other related undertakings held directly or indirectly at 31 December
2023 are as follows:
Registered address
Head Office
Head Office
Name
Place of incorporation
and operation
Proportion of
voting and
ownership
interest 2023
Proportion of
voting and
ownership
interest 2022 Nature of business
Airops Software Limited1
Aravco Limited1
FlyerTech Limited1
England and Wales
England and Wales
England and Wales
100%
100%
100%
100%
100%
100%
Aviation software
Dormant
Airworthiness management
Head Office
Gama Aviation (Asset 2)
Limited1
Gama Aviation (Engineering)
Limited1
England and Wales
Gama Aviation (UK) Limited1 England and Wales
England and Wales
Gama Group Limited
England and Wales
Gama Support Services
Limited1
England and Wales
Hangar 8 Management Limited England and Wales
International JetClub Limited England and Wales
Gama Aviation (Beauport)
Limited1
Gama Aviation (Engineering)
Jersey Limited1
Jersey
Jersey
100%
100%
Dormant
Head Office
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Aviation design and engineering Head Office
Aviation management
Holding company
Dormant
Dormant
Dormant
Head Office
Head Office
Head Office
Head Office
Head Office
100%
100%
Aviation management
Jersey Office
100%
100%
Aviation design and engineering
and FBO
Jersey Office
Gama Aviation FZC1,2
SAIF Free Zone,
United Arab Emirates 49%
49%
Aviation management
Gama Group Mena FZE
United Arab Emirates 100%
100%
Holding company
Gama Holdings FZC
United Arab Emirates 100%
100%
Dormant
Gama Support Services FZE1 United Arab Emirates
100%
100%
Aviation design and engineering
and FBO
Gama Aviation SPV Limited
(Plc)1
Gama Aviation (Management)
Inc.1
United Arab Emirates 100%
100%
Aviation management
Delaware, USA
100%
100%
Non-trading
Delaware Office
46
SAIF Suite Z-21, P.O. Box
122389, Sharjah, UAE
SAIF Office Q1-09-067/C,
P.O. Box 122464, Sharjah,
UAE
SAIF Lounge P.O. Box
121954, Sharjah, UAE
SAIF Desk Q1-05-123/B,
P.O. Box 122553, Sharjah,
UAE
2428 Res Co-work 03 Level
24, Al Sila Tower, Abu
Dhabi Global Market
Square, Al Maryah Island,
Abu Dhabi, UAE
Hong Kong Office
Hong Kong Office
Hong Kong Office
151 Monument Road,
Aston Manor 1619
South Africa
6
Maples Corporate Services
Limited, PO Box 309,
Ugland House, Grand
Cayman, KY1-1104,
Cayman Islands
ul. Komitetu Obrony
Robotnikow 62, 2nd Floor,
02-146 Warsaw, Poland,
NIP: 7831827059
Delaware Office
Room 250, 2nd Floor,
Building 1, No. 56,
Zhaoquanying Section,
Changjin Road, Shunyi
District, Beijing
Compass House, Lypiatt
Road, Cheltenham,
England, GL50 2QJ
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Name
Place of incorporation
and operation
Gama Aviation Engineering
(HK) Limited1
Gama Aviation Hutchison
Holdings Limited1
Hong Kong
Gama Aviation (HK) Limited1 Hong Kong
Hong Kong
Gama Group (Asia) Limited
Hong Kong
Star-Gate Aviation (Proprietary)
Limited
Hangar 8 Nigeria Limited3
South Africa
Nigeria
Proportion of
voting and
ownership
interest 2023
Proportion of
voting and
ownership
interest 2022 Nature of business
Registered address
100%
100%
Aviation design and engineering Hong Kong Office
100%
100%
100%
100%
100%
100%
Holding company
Aviation management
Holding company
100%
100%
100%
100%
Holder of South African AOC
Applicant of Nigerian AOC
Gama Aviation (Cayman)
SEZC
Cayman Islands
100%
100%
Aviation Management
FlyerTech Europe Sp. Z.o.o.
GB Aviation Holdings LLC4
Poland
Delaware, USA
100%
50%
100%
50%
Airworthiness management
Joint venture – non-trading
Gama Aviation Hutchison
Technical Service (Beijing)
Limited1
China
100%
100%
Non-trading
Bond Helicopters Limited1,5
England and Wales
50%
–
Joint venture
1
2
3
4
5
6
Indicates indirect holding.
Gama Aviation Plc holds a 49% shareholding in Gama Aviation FZC. The results of Gama Aviation FZC are fully consolidated within the
financial statements because Gama Aviation Plc is exposed to variable returns from its involvement and has the ability to affect the
returns through its power over these companies. Refer to Note 34 for further details.
Gama Aviation Plc holds 11% of the share capital in Hangar 8 Nigeria Limited, a company established in Lagos, Nigeria. Whilst the
Group does not have legal control of this entity, the Directors and officers comprise only management from the Group who have the
ability to adopt, amend and control the operating and financial policies of the entity. Local regulations prevent the Group holding a legally
controlling shareholding and therefore 89% of the share capital is held on behalf of the Group by Tinubu Investment Company Limited.
Accordingly, the entity has been treated as a wholly owned subsidiary in these financial statements.
GB Aviation Holdings LLC is the entity jointly held with Signature Aviation plc.
Bond Helicopters Limited is the entity jointly held with Peter Bond. Gama Aviation Plc holds 50% of the share capital, however it has
been determined that the Gama Group controls Bond Helicopters Limited, because it has the casting vote on the Board and is able to
use this to control business decisions of the JV entity. As such the results of the joint venture are fully consolidated into the Group’s
financial statements.
The registered office address of this company is available upon request at the Company’s Head Office at the above address.
The addresses for the specified offices are:
Head Office: 1st Floor 25 Templer Avenue, Farnborough, Hampshire, England, GU14 6FE
Jersey Office: Beauport House, L’Avenue De La Commune, St Peter, Jersey, JE3 7BY
Delaware Office: Corporation Service Company, 251 Little Falls Drive, Wilmington, Delaware 19808, USA
Trenton Office: 18 West Piper Ave, Trenton, New Jersey 08628, USA
Hong Kong Office: 7th Floor, 81 South Perimeter Road, Hong Kong International Airport, Lantau, Hong Kong
47
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
During the year ended 31 December 2023, the Company disposed of the following undertakings held directly or
indirectly at 31 December 2022:
Name
Place of
incorporation
and operation
Proportion of voting and
ownership
interest 2023
Proportion of voting and
ownership
interest 2022
Method of disposal Registered address
Gama Aviation
(Engineering) Inc.1 Delaware, USA
Jet East Aviation
Corporation, LLC1
Pennsylvania, USA
Gama Group Inc.
Delaware, USA
Gama (Engineering)
Limited1
Ronaldson Airmotive
Limited1
England and Wales
England and Wales
1
Indicates indirect holding.
3. Accounting policies
Basis of preparation
–
–
–
–
–
100%
100%
100%
100%
100%
Sold
Sold
Sold
Delaware Office
Trenton Office
Delaware Office
Dissolved
Head Office
Dissolved
Head Office
The Consolidated Financial Statements of the Group have been prepared in accordance with UK adopted
International Accounting Standards, in conformity with the requirements of the Companies Act 2006.
The Consolidated Financial Statements have been prepared on a going concern basis and under the historical
cost convention, except as disclosed in the accounting policies below.
The financial statements are presented in United States Dollars (USD), rounded to the nearest thousand
(USD’000) unless otherwise stated.
Climate Change
In preparing the Consolidated Financial Statements the Group has informally considered the impact of climate
change, particularly in the context of the disclosures included in our Corporate Social Responsibility report. These
considerations did not have a material impact on the financial reporting judgements and estimates, consistent
with the assessment that climate change is not expected to have a significant impact on the Group’s going concern
assessment.
Going concern
To support their assessment of going concern, the Directors have reviewed detailed cash flow projections for the
Group for the period from the date of approval of these financial statements to 31 December 2025. The Directors
have also considered the outlook for the business beyond 31 December 2025 based upon its five-year strategic
plan.
The analysis takes account of the following, amongst other, relevant considerations:
Projected revenue, profit performance, working capital levels and the conversion of profits into cash flows,
The $11.2m loan from Close Brothers that completed on 3 March 2023, and which is secured on owned
aircraft,
Net current assets of $72.4m as at 31 December 2023,
Net assets of $100.9m as at 31 December 2023,
Cash of $92.1m as at 31 December 2023,
The tender offer involving the return up to 95p a share to certain shareholders, and
Availability of financing and other income sources.
The Directors have also considered a severe but plausible downside scenario in which EBITDA is lower and
working capital outflows, funding costs and corporation tax rates are higher than base case projections.
48
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
In both the base case scenario and the severe but plausible downside scenario, the Directors are satisfied that
the Group has sufficient headroom to ensure that the Group will remain solvent and be able to pay its debts as
they fall due during a period of at least 12 months from the date of approval of these financial statements.
Accordingly, after making appropriate enquiries, the Directors have, at the time of approving these financial
statements, a reasonable expectation that the Group has adequate resources to continue in operational existence
for the foreseeable future and, consequently, consider that it is appropriate to adopt the going concern basis in
preparing these financial statements.
Changes in accounting policies and practices
In the preparation of these Consolidated Financial Statements, the Group followed the same accounting policies
and methods of computation as compared to those applied in the previous period, except for the adoption of new
standards and interpretations and revision of the existing standards noted below.
New and amended standards adopted by the Group in 2023 or not yet adopted
There were no amendments to existing standards and interpretations that were effective in the year ended 31
December applicable nor had material impact on the Group. The Directors do not expect the adoption of new
accounting standards and interpretations to have a material impact on the Consolidated financial statements.
Material accounting policies
The material accounting policies adopted in the preparation of these Consolidated Financial Statements are set
out below.
Basis of consolidation
The Consolidated Financial Statements incorporate the financial statements of the Company and the subsidiaries
controlled by the Company for the years ended 31 December 2023 and 31 December 2022. The Group controls
an investee if, and only if, the Group has all of the following:
Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of
the investee)
Exposure, or rights, to variable returns from its involvement with the investee, and
The ability to use its power over the investee to affect its returns.
Generally, there is a presumption that a majority of voting rights result in control. To support this presumption and
when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all
relevant facts and circumstances in assessing whether it has power over an investee, including:
The contractual arrangement with the other vote holders of the investee
Rights arising from other contractual arrangements
The Group’s voting rights and potential voting rights
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group
obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities,
income and expenses of a subsidiary acquired or disposed of during the period are included in the Consolidated
Financial Statements from the date the Group gains control until the date the Group ceases to control the
subsidiary.
49
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Subsidiaries
Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included in the
Consolidated Financial Statements from the date on which control commences until the date on which control
ceases.
The subsidiary financial statements are prepared for the same reporting period as the Parent Company and are
based on consistent accounting policies. All intra-group balances and transactions, including unrealised profit
arising from them are eliminated in full.
Business combinations
Business combinations are accounted for using the acquisition method. The cost of any acquisition is measured
as the aggregate of the consideration transferred, measured at acquisition date fair value, and the amount of any
non-controlling interest in the acquiree. For each business combination, the acquirer measures the non-controlling
interest in the acquiree either at fair value or at the proportionate share of the acquirer’s identifiable net assets.
Acquisition costs incurred are expensed and included within adjusting items.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic circumstances, and pertinent
conditions as at the acquisition date.
Goodwill is initially recognised at cost, being the excess of the aggregate of the consideration transferred and the
amount recognised for non-controlling interest, over the net identifiable assets acquired and liabilities assumed.
If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is
recognised in profit or loss.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For impairment
testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s
cash-generating units (“CGUs”) that are expected to benefit from the combination, irrespective of whether assets
or liabilities of the acquisition are assigned to those units.
Where goodwill forms part of a CGU, and part of the operation within that unit is disposed of, the goodwill
associated with the operation disposed of is included in the carrying amount of the operation when determining
the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the
relative values of the operation disposed of and the portion of the CGU retained.
Joint ventures
A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have
rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an
arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the
parties sharing control.
The considerations made in determining joint control is similar to those necessary to determine control over
subsidiaries.
The Group’s investments in its joint ventures are initially recognised in the Consolidated Balance Sheet at cost.
Subsequently, joint ventures are accounted for using the equity method, where the Group’s share of post-
acquisition profits and losses and other comprehensive income is recognised in the Consolidated Income
Statement and Consolidated Statement of Comprehensive Income (except for losses in excess of the Group’s
investment in the joint venture, unless there is an obligation to make good those losses).
Revenue from contracts with customers
The Group recognises revenue from the following major sources:
Business Aviation:
o Managed aircraft contracts and specific air services
o Charter services
o Maintenance of aircraft
50
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
o Fixed base operations
Special Mission:
o Mission solutions and expertise with aviation assets
Technology & Outsourcing (T&O):
o Airworthiness services
o Software solutions
Branding fees
Revenue is measured based on the fair value of the consideration received or receivable, taking into account
contractually-defined terms of payment in relation to when the performance obligation is met, and excludes
amounts collected on behalf of third parties.
The transaction price represents the price to which the Group expects to be entitled, consistent with contractually
defined terms, in return for delivering goods and/or services to its customers. Revenue from contracts with
customers is recognised when the Group transfers control of a product or service to a customer or when it meets
the performance obligations specified or implied in the contract.
Managed aircraft contracts and specific air services
Services provided by the Group under managed aircraft contracts include flight training, cost management, flight
planning and scheduling, crew management, maintenance oversight and regulatory compliance. Services under
managed aircraft contracts fall into one or more of the following contract components:
Pre-delivery services and services prior to aircraft’s entry into service
Management services
Variable fees based on flying hours and related rechargeable costs
These services are distinct services as the customer can benefit from each service on its own and the Group’s
promise to provide the service is separately identifiable from other promises in the contract. The three contract
components are therefore deemed to be separate performance obligations.
Revenue for the provision of pre-delivery services and services prior to aircraft’s entry into service are recognised
at a point in time when control of the services has transferred to the customer, being at the point the services
have been performed. Payment for the provision of pre-delivery services and services prior to aircraft’s entry into
service are not due from the customer until the activities are complete.
Revenue relating to management services are recognised over time on a straight-line basis over the term of the
contract, as the customer simultaneously receives and consumes the benefits provided by the Group.
Payment for management services is mostly in the form of quarterly or monthly advance payments from
customers. A contract liability is recognised for revenue relating to management services at the time of receipt of
the funds from the customer. The contract liability represents the Group’s obligation for services still to be
performed.
Revenue relating to variable flying hours revenue is recognised monthly at a point in time based upon actual flight
information and other relevant information held on the internal billing system. Payment for revenue related to
variable flying hours is not due from the customer until the activities are complete.
Rechargeable costs are recognised gross, as revenue and related cost of sales, at a point in time based upon
either actual rechargeable costs or estimated costs to be recharged. Payment for revenue arising from
rechargeable costs is not due from the customer until the activities are complete.
The Group has considered whether it is acting as agent or principal in the context of its managed aircraft contracts
and has concluded that it is the principal in relation to the entirety of these contracts. Rechargeable costs are
recognised gross because the Group controls the services before they are transferred to customers and they are
linked to wider management services.
51
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Charter services
The Group provides both managed fleet and sub-contracted charter services. Revenue relating to charter services
is recognised over time based on the stage of completion of the service. The stage of completion is determined
as the proportion of the total duration of the charter that has elapsed at the end of the reporting period. Payment
for charter services is not due from the customer until the charter services are complete. Consequently, a contract
asset is recognised over the period in which the charter services are performed, representing the Group’s right to
consideration for the services performed to date.
The Group has considered whether it is acting as agent or principal in the context of its sub-contracted charter
services and has concluded that it is the principal.
Maintenance of aircraft
The Group provides both base and line maintenance services. Base maintenance relates to the planned
maintenance that is required by the aircraft manufacturer or component supplier. This work is complex, highly
regulated and location specific. Line maintenance covers irregular maintenance activities, component failure or
simple wear and tear. Both types of services are provided on a fee or contract basis.
Revenue relating to maintenance services is recognised over time based on the stage of completion of the
contract. The stage of completion is determined as the proportion of the total labour hours expected to perform
the service that have been expended at the end of the reporting period. Payment for higher value base
maintenance services is mostly in the form of stage payments from customers. To the extent that the value of the
stage payment exceeds the revenue recognised at the end of the reporting period based on the stage of
completion, a contract liability is recognised. The contract liability represents the Group’s obligation for services
still to be performed.
As part of the maintenance activities, the Group sells parts to customers. Revenue from the sale of parts is
recognised at a point in time when control of the goods has transferred to the customer, being at the point the
goods are delivered to the customer.
Fixed base operation
The Group provides fixed base operation activities in the Jersey, the UK, and the Middle East. These activities
include hangar parking, apron parking, provision of fuel, and handling activities.
Revenue for the provision of fuel is recognised at a point in time when control of the goods has transferred to the
customer, being at the point the goods are delivered to the customer. Revenue for all other fixed base operation
activities is recognised over time as the service is provided.
Mission solutions and expertise with aviation assets
Revenue includes fixed contract fees and variable fees such as revenue earned with reference to flying hours or
other support services. In addition, the Group undertakes certain equipment design and modification activities for
some customers.
Revenue relating to fixed contract fees are recognised over time on a straight-line basis over the term of the
contract. Payment for fixed contract fees is mostly in the form of annual or quarterly advance payments from
customers. A contract liability is recognised for revenue relating to fixed contract fees at the time of receipt of the
funds from the customer. The contract liability represents the Group’s obligation for services still to be performed.
Revenue relating to variable fees is recognised over time based on the stage of completion of the contract. The
stage of completion is determined as the proportion of the total hours expected to perform the service that have
been expended at the end of the reporting period. Payment for variable fees is not due from the customer until
the activities are complete. Consequently, a contract asset is recognised over the period in which the activities
are performed, representing the Group’s right to consideration for the services performed to date.
Revenue relating to equipment design and modification activities is recognised over time based on the stage of
completion of the related design and modification work. The stage of completion is determined as the proportion
of the total labour hours expected to perform the service that have been expended at the end of the reporting
period. Payment for equipment design and modification activities are not due from the customer until the activities
are complete. Consequently, a contract asset is recognised over the period in which the activities are performed,
representing the Group’s right to consideration for the services performed to date.
52
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Payment for some higher value equipment design and modification activities is in the form of stage payments
from customers. To the extent that the value of the stage payment exceeds the revenue recognised at the end of
the reporting period based on the stage of completion, a contract liability is recognised. The contract liability
represents the Group’s obligation for services still to be performed.
Airworthiness services
The Group provides continuing airworthiness management and airworthiness review certification services for
business aviation, military, and commercial airline operators. Revenue from these activities includes fixed contract
fees and variable fees, such as revenue earned with reference to ad-hoc services.
Revenue relating to fixed contract fees are recognised over time on a straight-line basis over the term of the
contract. Payment for fixed contract fees is mostly in the form of monthly advance payments from customers. A
contract liability is recognised for revenue relating to fixed contract fees at the time of receipt of the funds from the
customer. The contract liability represents the Group’s obligation for services still to be performed.
Revenue relating to variable fees is recognised over time based on the stage of completion of the contract. The
stage of completion is determined as the proportion of the total hours expected to perform the service that have
been expended at the end of the reporting period. Payment for variable fees is not due from the customer until
the activities are complete. Consequently, a contract asset is recognised over the period in which the activities
are performed, representing the Group’s right to consideration for the services performed to date.
Software solutions
The Group has developed a suite of business aviation products deployed as “Software as a Service” and mobile
application solutions for flight and aircraft management, maintenance tracking, ground operations and crew
scheduling and operations.
Revenue relating to the use of these software products are recognised over time on a straight-line basis over the
term of the contract. Payment for use of the software products is mostly in the form of annual or monthly advance
payments from customers. A contract liability is recognised for revenue relating to the use of the software products
at the time of receipt of the funds from the customer. The contract liability represents the Group’s obligation for
services still to be performed.
Branding fees
The Group received a branding fee from Gama Aviation LLC for the continued use of the Gama Aviation Signature
brand. Revenue relating to the branding fee is recognised over time (as the customer simultaneously receives
and consumes the benefits provided by the Group) on a straight-line basis over the remaining term of the contract.
Foreign currencies
The individual financial statements of each Group company are presented in the currency of the primary economic
environment in which it operates (its functional currency). For the purpose of the Consolidated Financial
Statements, the results and financial position of each Group company are reported in US Dollars, which is the
presentation currency for the Consolidated Financial Statements.
In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s
functional currency (foreign currencies) are recorded at the rates of exchange prevailing at the dates of the
transactions. At each balance sheet date, monetary assets and liabilities that are denominated in foreign
currencies are retranslated at the rates prevailing at that date.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the
exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign
currency are translated using the exchange rates at the date when the fair value was determined. All resulting
differences are taken to the Consolidated Income Statement. Foreign currency fluctuations on monetary items
that are financing in nature, being foreign currency borrowings, are presented in finance income or expenses. All
other foreign currency fluctuations on monetary items are presented within earnings before interest and taxation.
For the purpose of presenting Consolidated Financial Statements, the assets and liabilities of the Group’s foreign
operations are expressed in US Dollars using the exchange rates prevailing at the end of the reporting period.
53
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Income and expense items are translated at the average exchange rates for the period. Exchange differences
arising, if any, are classified as other comprehensive income and transferred to the Group’s translation reserve.
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and
liabilities of the foreign operation and translated at the closing rate.
Retirement benefit costs
Payments to defined contribution retirement benefit plans are recognised as an expense when employees have
rendered the service entitling them to the contributions. Payments made to state-managed retirement benefit
plans are accounted for as payments to defined contribution plans where the Group’s obligations under the plans
are equivalent to those arising in a defined contribution retirement benefit plan.
Short-term and other long-term employee benefits
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and
sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be
paid in exchange for that service.
Liabilities recognised in respect of short-term employee benefits are measured at the undiscounted amount of the
benefits expected to be paid in exchange for the related service.
Liabilities recognised in respect of other long-term employee benefits are measured at the present value of the
estimated future cash outflows expected to be made by the Group in respect of services provided by employees
up to the reporting date.
Leases
The Group as lessee
The Group assesses whether a contract is, or contains, a lease at inception of the contract. The Group recognises
a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the
lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low
value assets (determined to be those with an initial discounted total obligation of less than $5,000). For these
leases, the Group recognises the lease payments as an operating expense on a straight-line basis over the term
of the lease unless another systematic basis is more representative of the time pattern in which economic benefits
from the leased assets are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the rate implicit in the lease. If that rate cannot be readily determined, the
Group uses its incremental borrowing rate.
The incremental borrowing rate depends on the term, currency and start date of the lease and is determined
based on a series of inputs including: the risk-free rate based on government bond rates; a country-specific risk
adjustment; a credit risk adjustment based on bond yields; and an entity-specific adjustment when the risk profile
of the entity that enters into the lease is different to that of the Group and the lease does not benefit from a
guarantee from the Group.
Lease payments included in the measurement of the lease liability comprise:
Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable,
The amount expected to be payable by the lessee under residual value guarantees,
The exercise price of purchase options, if the lessee is reasonably certain to exercise the options,
Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to
terminate the lease
The lease liability is presented as a separate line in the consolidated statement of financial position.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease
liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments
made.
54
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset)
whenever:
The lease term has changed or there is a significant event or change in circumstances resulting in a
change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured
by discounting the revised lease payments using a revised discount rate,
The lease payments change due to changes in an index or rate or a change in expected payment under
a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised
lease payments using an unchanged discount rate (unless the lease payments change is due to a change
in a floating interest rate, in which case a revised discount rate is used),
A lease contract is modified and the lease modification is not accounted for as a separate lease, in which
case the lease liability is remeasured based on the lease term of the modified lease by discounting the
revised lease payments using a revised discount rate at the effective date of the modification.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments
made at or before the commencement day, less any lease incentives received and any initial direct costs. They
are subsequently measured at cost less accumulated depreciation and impairment losses.
Whenever the Group incurs an obligation for costs to dismantle and remove a leased asset, restore the site on
which it is located or restore the underlying asset to the condition required by the terms and conditions of the
lease, a provision is recognised and measured under IAS 37. To the extent that the costs relate to a right-of-use
asset, the costs are included in the related right-of-use asset, unless those costs are incurred to produce
inventories.
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the right-of-use asset.
If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group
expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the
underlying asset. The depreciation starts at the commencement date of the lease.
The right-of-use assets are presented as a separate line in the Consolidated Balance Sheet.
The Group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified
impairment loss as described in the “Impairment of property, plant and equipment and intangible assets excluding
goodwill” policy.
As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account
for any lease and associated non-lease components as a single arrangement. The Group has not used this
practical expedient. For contracts that contain a lease component and one or more additional lease or non-lease
components, the Group allocates the consideration in the contract to each lease component on the basis of the
relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease
components.
Rent free concessions granted during the COVID-19 pandemic have been credited to the income statement in
the year they were granted, with a resulting reduction in the lease obligation.
The Group as lessor
The Group enters into lease agreements as a lessor for some of its property included within its right-of-use assets.
Leases for which the Group is a lessor are classified as finance or operating leases. Whenever the terms of the
lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a
finance lease. All other leases are classified as operating leases.
When the Group is an intermediate lessor, it accounts for the head lease and the sub-lease as two separate
contracts. The sub-lease is classified as a finance or operating lease by reference to the right-of-use asset arising
from the head lease.
Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease.
Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of
the leased asset and recognised on a straight-line basis over the lease term.
55
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Amounts due from lessees under finance leases are recognised as receivables at the amount of the Group’s net
investment in the leases. Finance lease income is allocated to accounting periods to reflect a constant periodic
rate of return on the Group’s net investment outstanding in respect of the leases.
Subsequent to initial recognition, the Group regularly reviews the estimated unguaranteed residual value and
applies the impairment requirements of IFRS 9, recognising an allowance for expected credit losses on the lease
receivables.
Finance lease income is calculated with reference to the gross carrying amount of the lease receivables, except
for credit-impaired financial assets for which interest income is calculated with reference to their amortised cost
(i.e. after a deduction of the loss allowance).
When a contract includes both lease and non-lease components, the Group applies IFRS 15 to allocate the
consideration under the contract to each component.
Finance income
Finance income is recognised as interest accrues using the effective interest method. The effective rate is the
rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument to
its net carrying amount.
Finance income also includes foreign currency exchange gains on the retranslation of loans.
Taxation
The income tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profits or losses for the year. Taxable profit or loss differs from net
profit or loss as reported in the Consolidated Income Statement because it excludes items of income or expense
that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
Group’s liability for current tax is calculated using tax rates and laws that have been enacted or substantively
enacted by the end of the reporting period.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of
assets and liabilities in the financial statements and the corresponding tax bases used in the computation of
taxable profit and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally
recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible temporary differences can be utilised. Such
assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than
in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor
the accounting profit. In addition, a deferred tax liability is not recognised if the temporary difference arises from
the initial recognition of goodwill. However, the initial recognition exemption does not apply to transactions in
which both deductible and taxable temporary differences arise on initial recognition that result in the recognition
of equal deferred tax assets and liabilities.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and
associates, and interests in joint ventures, except where the Group can control the reversal of the temporary
difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax
assets arising from deductible temporary differences associated with such investments and interests are only
recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the
benefits of the temporary differences and they are expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is
no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled, or
the asset is realised based on tax laws and rates that have been enacted or substantively enacted at the reporting
date.
56
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the
manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of
its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets
against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the
Group intends to settle its current tax assets and liabilities on a net basis.
Current tax and deferred tax for the year
Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in
other comprehensive income or directly in equity, in which case the current and deferred tax are also recognised
in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from
the initial accounting for a business combination, the tax effect is included in the accounting for the business
combination.
Use of alternative performance measures (APMs)
The performance of the Group is assessed and discussed on an “adjusted” basis, using a variety of APMs,
including Adjusted Gross Profit, Adjusted Earnings Before Interest, Taxation, Depreciation and Amortisation
(EBITDA), Adjusted Earnings Before Interest and Tax (EBIT), Organic Revenue Growth and Net debt.
The term “Adjusted” refers to the relevant measure being reported for continuing operations before “Adjusting
items”.
“Adjusting items” are the income statement items that are excluded from the Statutory results. Adjusting items
include exceptional items, amortisation of acquired intangibles, equity-settled share-based payment charges,
other long-term employee benefits, and tax related to Adjusting items. These items are defined and explained in
more detail as follows:
Exceptional items
Exceptional items are items of income or expenditure that are not considered to reflect in-year operational
performance of the continuing business. These are recorded in accordance with the policy set out below:
Transaction costs – arising on acquisitions, disposals, and debt refinancing,
Integration and business re-organisation – legal and professional fees and non-recurring operating costs
arising from significant acquisition integration or business re-organisation activities. Non-recurring
operating costs means those costs that are related to a specific integration or re-organisation event that
will not be repeated because they are unique to the event and which are not expected to follow a
consistent level of expense from one accounting period to the next,
Litigation – legal costs (which may be incurred in more than one accounting period) are treated as
exceptional if they relate to specific commercial legal events that are not in the normal course of trading
activity in respect of one-off or related series of cases and are not expected to follow a consistent level of
expense from one accounting period to the next,
Impairment – arising from significant losses identified from impairment reviews,
Other items – other non-recurring items that are non-trading in nature.
Amortisation of acquired intangible assets
Exclusion of amortisation of acquired intangibles accounted for under IFRS 3 from the Group’s results assists with
the comparability of the Group’s profitability with peer companies. In addition, charges for amortisation of acquired
intangibles arise from the purchase consideration of separate acquisitions. These acquisitions are portfolio
investment decisions that took place at different times over several years, and so the associated amortisation
does not reflect current operational performance.
57
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Equity-settled share-based payments
The Group treats share-based payments as an Adjusting item because share-based payments are a significant
non-cash charge driven by a valuation model that references Gama’s share price and each new share award is
subject to volatility when it is measured at the grant date.
Other long-term employee benefits
Other long-term employee benefits agreed as part of the Jet East acquisition and contractually linked to ongoing
employment as well as business performance are accrued over the period in which the related services are
received and are recorded as an Adjusting item.
Tax related to Adjusting items
The elements of the overall Group tax charge relating to the above Adjusting items are also treated as Adjusting.
These elements of the tax charge are calculated with reference to the specific tax treatment of each individual
Adjusting item, taking into account its tax deductibility, the tax jurisdiction concerned, and any previously
recognised tax assets or liabilities.
The Directors believe that adjusted profit and earnings per share measures provide additional and more consistent
measures of underlying performance to shareholders by removing certain trading and non-trading items that are
not closely related to the Group’s operating cash flows or non-recurring in nature. These and other APMs are
used by the Directors for internal performance analysis and incentive compensation arrangements for employees.
The term “Adjusted” is not defined under IFRS and may therefore not be comparable with similarly titled measures
reported by other companies. They are not intended to be a substitute for, or superior to, GAAP measures. Where
applicable, segmental measures are calculated in accordance with Group measures.
The Group’s Consolidated Income Statement identifies trading results before Adjusting items. The Directors
believe that presentation of the Group’s results in this way is relevant to an understanding of the Group’s financial
performance, as Adjusting items are identified by virtue of their size, nature or incidence. This presentation is
consistent with the way that financial performance is measured by management and reported to the Board and
assists in providing a meaningful analysis of the trading results of the Group. In determining whether an event or
transaction is treated as an Adjusting item, management consider quantitative as well as qualitative factors such
as the frequency or predictability of occurrence.
Goodwill
Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated
impairment losses. Goodwill is reviewed for impairment at least annually or more frequently if there is an indication
of impairment. Any impairment is recognised immediately in the income statement and is not subsequently
reversed.
For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units (“CGUs”)
expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the
Group are assigned to those units.
Impairment of goodwill is determined by assessing the recoverable amount of the CGU to which the goodwill
relates. If the recoverable amount of the CGU is less than the carrying value of the CGU to which the goodwill
has been allocated, an impairment loss is recognised. The impairment loss is allocated first to reduce the carrying
value of any goodwill allocated to the CGU and then to the other assets of the CGU pro-rata on the basis of the
carrying value of each asset in the CGU.
On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or
loss on disposal.
Other intangible assets
Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated
amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over their
estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting
period, with the effect of any changes in estimate being accounted for on a prospective basis.
58
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Intangible assets acquired in a business combination and recognised separately from goodwill are recognised
initially at their fair value at the acquisition date (which is regarded as their cost).
Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less
accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are
acquired separately.
Expenditure on research activities is recognised as an expense in the period in which it is incurred. Internally
generated intangible assets arising from development (or from the development phase of an internal project) is
recognised if, and only if, all of the following conditions have been demonstrated:
The technical feasibility of completing the intangible asset so that it will be available for use or sale,
The intention to complete the intangible asset and use or sell it,
The ability to use or sell the intangible asset,
How the intangible asset will generate probable future economic benefits,
The availability of adequate technical, financial and other resources to complete the development and to
use or sell the intangible asset,
The ability to measure reliably the expenditure attributable to the intangible asset during its development.
The amount initially recognised for internally generated intangible assets is the sum of the expenditure incurred
from the date when the intangible asset first meets the recognition criteria listed above. Where no internally
generated intangible asset can be recognised, development expenditure is recognised in profit or loss in the
period in which it is incurred.
Subsequent to initial recognition, internally generated intangible assets are reported at cost less accumulated
amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired
separately.
Costs associated with the configuration and customisation of Software as a Service arrangements are capitalised
as intangible assets only where control of the software exists.
The Group has no indefinite life intangible assets.
A summary of the amortisation policies applied to the Group’s other intangible assets is as follows:
Licences
Brands
10% per annum, straight line method
20% per annum, straight line method
Customer relations
10% per annum, straight line method
Computer software
20%-33% per annum, or life of licence if shorter, straight-line method
The life of each internally generated intangible asset is assessed individually.
The useful life of intangible assets is reviewed at each reporting date and, if expectations differ from previous
estimates, the change is accounted for as a change in an accounting estimate.
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or
disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between
the net disposal proceeds and the carrying amount of the asset, are recognised in profit or loss when the asset is
derecognised.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment
loss.
Assets under construction for production, supply, or administrative purposes, or for purposes not yet determined,
are carried at cost, less any recognised impairment loss. Cost includes professional fees and, for qualifying assets,
borrowing costs capitalised in accordance with the Group’s accounting policy. Depreciation of these assets
commences when the assets are ready for their intended use.
59
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Depreciation is recognised to write-off the cost of assets less their residual values over their useful lives, using
the straight-line method, on the following bases:
Helicopters
5% per annum and 25% residual value (on the original cost)
Leasehold improvements
Life of lease and no residual value
Aircraft and refurbishments
The higher of 20 years less the age of aircraft at purchase, and
5 years (20% per annum). A 25% residual value (on the original
cost) is in place where engines are on an engine maintenance
programme as this is considered to support a residual value
Furniture, fixtures and equipment
20% to 33% per annum and no residual value
Motor vehicles
20% per annum and no residual value
The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting
period, with the effect of any changes in estimate accounted for on a prospective basis.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are
expected to arise from the continued use of the asset. The gain or loss arising on the disposal or retirement of an
asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is
recognised in the Consolidated Income Statement.
Impairment of property, plant and equipment and intangible assets excluding goodwill
At each reporting date, the Group reviews the carrying amounts of its property, plant and equipment and intangible
assets to determine whether there is any indication that those assets have suffered an impairment loss. If any
such indication exists, the recoverable amount of the asset is estimated to determine the extent of the impairment
loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group
estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable
and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-
generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a
reasonable and consistent allocation basis can be identified.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use,
the estimated future post tax cash flows are discounted to their present value using a post-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset for which the
estimates of future cash flows have not been adjusted. As most rates which are observable in the market, including
inputs into the weighted average cost of capital formula, are on a post-tax basis, a post-tax discount rate is used
to discount estimated future cash flows.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount,
the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment
loss is recognised immediately in profit or loss.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is
increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying
amount does not exceed the carrying amount that would have been determined had no impairment loss been
recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised
immediately in profit or loss to the extent that it eliminates part or all of the impairment loss which has been
recognised for the asset in prior years.
Contract assets
A contract asset is recognised when costs which relate directly to a contract; those the costs generate or enhance
resources of the entity that will be used in satisfying performance obligations in the future; and the costs are
expected to be recovered.
60
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where
applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their
present location and condition. Cost for each class of inventory is determined as follows:
Raw materials and consumables: purchase cost calculated using the first-in-first-out basis
Work in progress: cost of direct materials and labour
Net realisable value represents the estimated selling price in the ordinary course of business, less all estimated
costs of completion and costs to be incurred in marketing, selling and distribution. In addition, the Company
provides for inventories on a sliding scale over the preceding eight years. As a result, inventory older than eight
years is written off in full.
In line with industry practice, the Group recognises rotable stock as inventory. Rotable stock are inventory items
that can be repeatedly and economically restored to their fully serviced condition, in which already-repaired
equipment is exchanged for defective equipment, which in turn is repaired and kept for future exchange. These
items have extensive life expectancy through repetitive overhaul process. The cost associated with refurbishing
rotable stock is recognised in inventory.
Cash and cash equivalents
The Group’s cash and cash equivalents in the Consolidated Balance Sheet comprise cash on hand, cash at bank,
and short-term, highly liquid investments with original maturity of three months or less that are readily convertible
to a known amount of cash and which are subject to an insignificant risk of changes in value.
Provisions and contingent liabilities
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past
event, it is probable that the Group will be required to settle that obligation and a reliable estimate can be made
of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. Where
a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the
present value of those cash flows when the effect of the time value of money is material.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third
party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received, and the
amount of the receivable can be measured reliably.
A contingent liability is disclosed where the existence of the obligation will only be confirmed by future events, or
where the amount of the obligation cannot be measured reliably.
From time to time the Group receives claims and threats of claims against it. Appropriate disclosures are made
except where the Board concludes that the likelihood of any such claim being successful is remote, immaterial or
where disclosure would be prejudicial. Appropriate provisions are made unless the Board concludes that the
claims are not likely to have a material impact on the Group’s financial position.
Financial instruments
Financial assets and financial liabilities are recognised in the Group’s balance sheet when the Group becomes a
party to the contractual provisions of the instrument.
Financial assets and financial liabilities are initially measured at fair value, except for trade receivables that do not
have a significant financing component which are measured at transaction price. Transaction costs that are
directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets
and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the
financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable
to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised
immediately in profit or loss.
61
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Financial assets
All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis.
Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within
the time frame established by regulation or convention in the marketplace.
All recognised financial assets are measured subsequently in their entirety at either amortised cost or fair value,
depending on the classification of the financial assets.
Trade and other receivables
Trade and other receivables are initially recognised at fair value, which is generally the same as invoiced amount,
and subsequently measured at amortised cost, or their recoverable amount. Trade receivables are predominantly
short-term and so the effects of the time-value of money are not considered material.
Where there are sub-participation arrangements, sub-participation proceeds are offset against the financial asset
provided that the sub-participation meets all pass-through conditions, namely, there is no recourse to the
transferor, and the transferor does not retain any significant risks and rewards of ownership of the financial asset.
Impairment of financial assets
The impairment model applies to the Group’s financial assets that are debt instruments measured at amortised
costs as well as the Group’s lease receivables, contract assets and issued financial guarantee contracts. The
Group applies the simplified approach for measuring expected credit losses for its trade receivables, accrued
income and contracts assets as permitted by IFRS 9.
Expected credit losses are calculated based on the historical credit loss experience and adjusted for forward
looking factors specific to the receivables and economic environment.
The amount of expected credit losses is updated at each reporting date.
Derecognition of financial assets
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire,
or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to
another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and
continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated
liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of
a transferred financial asset, the Group continues to recognise the financial asset and also recognises a
collateralised borrowing for the proceeds received.
On derecognition of a financial asset measured at amortised cost, the difference between the asset’s carrying
amount and the sum of the consideration received and receivable is recognised in profit or loss.
Financial liabilities and equity
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the
substance of the contractual arrangement and the definitions of a financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all
of its liabilities. Equity instruments issued by the Group are recognised at the proceeds received, net of direct
issue costs.
Financial liabilities
All financial liabilities are measured subsequently at amortised cost using the effective interest method or at fair
value through profit or loss.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating
interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated
future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period.
62
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Borrowings and other financial liabilities, including loans, are initially measured at fair value, net of transaction
costs.
Deferred consideration is recognised at amortised cost at acquisition date within the cost of investment, with a
corresponding entry to other financial liabilities. Changes to the value of the financial liability resulting from the
unwinding of discount at each subsequent reporting date are recognised in the Consolidated Income Statement.
Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged,
cancelled, or have expired. The difference between the carrying amount of the financial liability derecognised and
the consideration paid and payable is recognised in profit or loss.
Share-based payments
Equity-settled share-based payments to employees and others providing similar services are measured at the fair
value of the equity instruments at the grant date. The fair value excludes the effect of non-market-based vesting
conditions.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-
line basis over the vesting period, based on the Group’s estimate of the number of equity instruments that will
eventually vest. At each reporting date, the Group revises its estimate of the number of equity instruments
expected to vest as a result of the effect of non-market-based vesting conditions. The impact of the revision of the
original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised
estimate, with a corresponding adjustment to reserves.
Equity-settled share-based payment transactions with parties other than employees are measured at the fair value
of the goods or services received, except where that fair value cannot be estimated reliably, in which case they
are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods
or the counterparty renders the service.
Where the terms of an equity-settled transaction award are modified, the minimum expense recognised is the
expense as if the terms had not been modified if the original terms of the award are met. An additional expense
is recognised for any modification that increases the total fair value of the share-based payment transaction or is
otherwise beneficial to the employee as measured at the date of modification.
Where an equity-settled award is cancelled, it is treated as if it vested on the date of cancellation, and any expense
not yet recognised for the award is recognised immediately. This includes any award where non-vesting conditions
within the control of either the Group or the employee are not met. However, if a new award is substituted for the
cancelled award and designated as a replacement award on the date that it is granted, the cost based on the
original award terms continues to be recognised over the original vesting period and an expense is recognised
over the remainder of the new vesting period for the incremental fair value of any modification.
The financial effect of awards by the Parent Company of options over its equity shares to employees of subsidiary
undertakings is recognised by the Parent Company in its individual financial statements as an increase in its
investment in subsidiaries with a credit to equity equivalent to the IFRS 2 cost in subsidiary undertakings. The
subsidiary, in turn, recognises the IFRS 2 cost in its income statement with a credit to equity to reflect the deemed
capital contribution from the Parent Company.
For cash-settled share-based payments, a liability is recognised for the goods or services acquired, measured
initially at the fair value of the liability. At each reporting date until the liability is settled, and at the date of
settlement, the fair value of the liability is remeasured, with any changes in fair value recognised in profit or loss
for the year.
4. Critical accounting judgements and key sources of estimation uncertainty
In the application of the Group’s accounting policies, which are described in Note 3, the Directors are required to
make judgements (other than those involving estimations) that have a significant impact on the amounts
recognised and to make estimates and assumptions about the carrying amounts of assets and liabilities that are
not readily apparent from other sources. The estimates and associated assumptions are based on historical
experience and other factors, including anticipated future events and market conditions, that are relevant and
63
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
available when the Consolidated Financial Statements were prepared. Uncertainty about these assumptions and
estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities
affected in future periods.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period
of the revision and future periods if the revision affects both current and future periods.
Critical judgements in applying the Group’s accounting policies
The following are the critical judgements, apart from those involving estimations (which are dealt with separately
below), that the Directors have made in the process of applying the Group’s accounting policies and that have the
most significant effect on the amounts recognised in the financial statements:
Sharjah Business Aviation Centre
In June 2017, the Group entered into a non-cancellable Build Operate & Transfer Agreement and a Concession
Agreement with Sharjah Airport Authority under which it is committed to construct a Business Aviation Centre
(“BAC”) at Sharjah Airport. The agreement runs from June 2017 until June 2052 following the exercise of the ten-
year extension option in 2021.
As of 31 December 2022, assets under construction ($6.7m) and right-of-use assets associated with this project
($8.3m) were fully impaired. The impairment initially arose due to uncertainties arising in part from the COVID-19
pandemic, and subsequently due to the uncertainty about securing funding to continue the project.
During the current year, additional expenditure of $0.7m on the project has also been impaired. This is based on
the Directors’ judgement that whilst the Group is actively progressing the project the final funding sources are still
under review and the build phase has not yet been completed and therefore, the Board considers that it would be
inappropriate to reverse impairments relating to the BAC project until the profits associated with this project can
be forecast with greater certainty.
Classification of items of cost or income as exceptional items
Exceptional items are items of income or expenditure that are not considered to reflect in-year operational
performance of the continuing business. Classification of costs and income as exceptional items requires
judgement as the Group’s view of what qualifies as an exceptional item may differ from similar judgements made
by others. Exceptional items are treated as Adjusting items to enable more relevant and reliable financial
information to be presented. Note 16 describes the exceptional items that have been recorded in the Consolidated
Income Statement.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting
period, that may have a significant risk of causing a materially different outcome to the carrying amounts of assets
and liabilities within the next financial year, are discussed below.
Impairment of property, plant and equipment and intangible assets
Where there are indicators of impairment, or on an annual basis, management performs an impairment test.
Recoverable amounts for a CGU is the higher of value-in-use and fair value less cost of disposal.
Value-in-use is calculated using a discounted cash flow model from cash flow projections based on the Group’s
2024 updated Strategic Plan.
In measuring value-in-use, management have:
Based cash flow projections on reasonable and supportable assumptions that represent management’s
best estimate of the range of economic conditions that will exist over the remaining useful life of intangible
assets, property, plant and equipment, and right-of-use assets.
Based cash flow projections on the Group’s 2024 updated Strategic Plan. These forecasts cover a period
of five years.
64
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Estimated cash flow projections beyond the period of five years by extrapolating the projections based on
the forecasts using an estimate of long-term growth rates for subsequent years. This rate reflects the
average of the long‑term growth rate for the countries in which the CGU operates. In estimating cash flow
projections for each CGU, management have used the “single most likely cash flow” approach to estimate
the cash flows associated with a range of economic conditions that may exist over the next five years.
The “single most likely cash flow” approach differs from the “expected cash flow” approach in that it does
not use all expectations about possible cash flows.
In estimating the single most likely cash flow for each CGU, management have used the cash flow forecasts
contained in the Group’s five-year plan as the base case scenario.
Several other reasonably plausible scenarios have been considered but have not been adjusted for. Instead, the
impact of these scenarios has been evaluated through the sensitivity analysis.
Estimated future cash flows reflect assumptions that are consistent with the way the discount rate is determined.
Consequently, estimates of future cash flows include income tax receipts or payments as the discount rate is
determined on a post‑tax basis.
The discount rate for each CGU is estimated from the Group’s weighted average cost of capital using the Capital
Asset Pricing Model, after considering the risk-free rate, beta, equity market risk premium, country risk premium,
small stock premium, pre-tax cost of debt, tax rates, and the debt to capital ratio applicable to the CGU.
The terminal value for each CGU has been estimated by applying the Gordon Growth formula to the forecasted
cash flows using the respective discount rate and long-term growth rate.
The recoverable amount is most sensitive to the discount rate, the expected future cash inflows, and the growth
rate used for extrapolation purposes.
The carrying amount of each CGU is determined on a basis consistent with the way the recoverable amount of
the CGU is determined. Consequently, the carrying amount of each CGU includes goodwill allocated to each CGU
at inception, other intangible assets (including deferred tax related to the uplift to fair value recognised on
acquisition), property, plant and equipment, right-of-use assets, working capital balances, corporate income taxes,
obligations under leases, and corporate assets allocated to each CGU.
The key assumptions and estimates used to determine the recoverable amount for different CGUs, together with
sensitivities, are disclosed in Note 21.
Valuation of inventories
In measuring the net realisable value of inventory, the Group uses reasonable and supportable forward-looking
information, which is based on assumptions regarding the change in customer demand or obsolescence of certain
inventory lines.
Inventory valuation is sensitive to management’s assessment of obsolescence of certain line items. The significant
estimation uncertainty arises from the wide range and nature of inventory held, each with different demand and
opportunity to utilise. Whilst no specific inventory line has material estimation uncertainty in its valuation, there is
risk across all lines in aggregation.
An analysis of the inventories and inventory obsolescence allowance is provided in Note 22.
Assessment of lease terms
The Group has applied judgement to determine the lease term for those lease contracts that include a renewal or
break option. The assessment of whether the Group is reasonably certain to exercise a renewal option or not to
exercise a break option significantly impacts the value of lease liabilities and right-of-use assets recognised on
the balance sheet.
During the year the Group completed the sale and leaseback of two helicopter assets. Under the terms of these
arrangements the Group was obligated to deliver two helicopters in exchange for consideration from the
counterparty. Having reviewed the terms of this agreement, management has concluded that they meet to five
step revenue recognition requirements defined by IFRS15. Accordingly, these transactions have been recognised
as sales in the financial statements for the year ended 31 December 2023.
65
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Following the sale of the helicopters the Company entered into a lease agreement with the same counterparty.
These lease agreements contain initial periods of 87 and 89 months together with a re-purchase option. In
assessing whether the Group is reasonably certain, at the lease commencement date, to exercise the re-purchase
option, the Group has considered the following factors and circumstances:
(a) contractual terms and conditions for the optional periods compared with market rates, including: (i) the amount
of payments for the lease in the optional period; (ii) the amount of any variable payments for the lease or other
contingent payments; (iii) the terms and conditions of the options that are exercisable after the initial optional
periods;
(b) significant leasehold improvements undertaken (or expected to be undertaken) over the term of the contract
that are expected to have significant economic benefit for the Group when the option to extend the lease becomes
exercisable;
(c) costs relating to the termination of the lease, including the costs of identifying another underlying asset suitable
for the Group’s needs and the costs associated with returning the helicopters in a contractually specified condition
or to a contractually specified location;
(d) the importance of the helicopters to the Group’s operations; and
(e) conditionality associated with exercising the option and the likelihood that those conditions will exist.
The term “reasonably certain”is not defined in IFRS, but it is considered a high probability (i.e. almost certain).
Having considered the above factors and circumstances, the Group has concluded that, at the lease
commencement date, it is not reasonably certain that the Group will exercise either the repurchase option for
either helicopter. Consequently, the initial lease term has been assessed as 87 and 89 months for the two
helicopters.
Calculation of expected credit loss allowance
When measuring expected credit loss, the Group uses reasonable and supportable forward-looking information,
which is based on assumptions for the future movement of different economic drivers and how these drivers will
affect each other.
Probability of default constitutes a key input in measuring expected credit loss. Probability of default is an estimate
of the likelihood of default over a given time horizon, the calculation of which includes historical data including
experience of recovering overdue amounts, assumptions and expectations of future conditions.
An analysis of the amounts receivable for the sale of services, together with sensitivities, is provided in Note 23.
Taxation
Recoverability of the Group’s deferred tax assets, including timing, applicable corporate income tax rates and
availability of future taxable profits against which deferred tax assets could be utilised, is the most critical estimate
which may have a material impact on the financial statements.
The estimation uncertainty arises because the Group operates in a complex national and international tax
environment. The areas of uncertainty can include, inter alia, transfer pricing arrangements relating to the Group’s
operating activities and the deductibility of management recharges.
Further uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and
the amount and timing of future taxable income available against which deferred tax assets could be utilised. The
carrying value of tax assets and liabilities could therefore be impacted by changes in tax legislation and availability
of future taxable profits for which the impact can be significant.
66
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
5. Revenue (continuing operations)
An analysis of the Group’s revenue is as follows:
Sale of services
Branding fees
Statutory revenue
Business Aviation
Special Mission
Revenue recognised at a point in time
Business Aviation
Special Mission
T&O
Branding fee
Revenue recognised over time
Statutory revenue
Year ended
2023
$’000
147,217
-
147,217
Year ended
2023
$’000
70,624
2,788
73,412
16,388
52,461
4,956
−
73,805
147,217
Year ended
2022
$’000
166,767
625
167,392
Year ended
2022
$’000
82,855
3,743
86,598
23,197
51,759
5,213
625
80,794
167,392
All revenues, except branding fees, relate to contracts with customers.
Revenue recognised over time relates to the following operating divisions:
Special Mission has contract revenue of $225.4m to be earned over the next five years, with $52.5m
(2022: $51.8m) of revenue having been recognised in the year
Within Technology & Outsourcing, myairops® recognised contract revenue of $1.5m (2022: $1.7m)
during the year in relation to the provision of software services, with $1.6m due over the next four years
Revenue from discontinued operations was $126.9m (2022: $118.3m ) of which $82.8m (2022: $81.4m) was
recognised at a point in time, and $44.1m (2022: $36.8m) was recognised over time.
Revenue totalling $22.6m (2022: $19.9m), which is greater than 10% of Group revenue, has been recognised in
2023 in respect of a single customer and is included within the Special Mission reporting segment. Revenue
received at a point in time was $2.4m and revenue received over time was $20.1m.
The Group has not separately disclosed revenue by destination country because this is not tracked internally and
because management track revenue by SBU.
6. Other operating income (continuing operations)
Foreign currency translation on trading monetary items
Gain on disposal of subsidiary
Post-disposal income from US MRO Business
Indemnities received
Gain on disposal of property, plant and equipment (Note 19)
Total other operating income
Year ended
2023
$’000
Year ended
2022
$’000
(173)
−
202
1,007
238
1,274
3,086
126
−
−
1,741
4,953
67
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
7. Discontinued operations
On 3 November 2023, the Group announced that it had completed the sale of its US MRO Business, to West Star
Aviation Enterprises, LLC for a value of approximately $131m on a cash free/debt free basis with normalised
working capital.
Following repayment of various fees by the buyer and repayment of debt the Company received cash
consideration of $98.9m and anticipates receipt of $1.7m of deferred consideration. The net assets of discontinued
operations at the date of disposal were $14.6m and the Company incurred $2.7m of additional incremental costs
of sale resulting in a profit on disposal of $83.3m.
The results of the discontinued operations, which have been included in the profit for the year, were as follows:
Revenue
Cost of sales
Gross profit
Administrative expenses
Operating profit/(loss)
Profit on sale of subsidiary
Earnings before interest and taxation
Finance income
Finance expense
Profit/(loss) before taxation
Taxation
Loss after tax
Net cash generated by operating activities
Net cash used in investing activities
Net cash from financing activities
Year ended
2023
$’000
Year ended
2022
$’000
126,923
(101,809)
25,114
(26,907)
(1,793)
83,329
81,536
−
(2,186)
79,350
873
80,223
625
(3,232)
4
118,250
(92,517)
25,733
(28,075)
(2,342)
-
(2,342)
17
(835)
(3,160)
826
(2,334)
3,837
(4,090)
7,186
Effect of disposal on the financial position of the Group balance as at 3 November 2023 was as follows:
Other intangible assets
Property, plant and equipment
Right-of-use assets
Deferred tax asset
Inventories
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Corporation tax payable
Obligations under leases
Borrowings
Net assets
At 3 November
2023
$’000
4,132
5,548
13,266
5,800
4,405
24,456
1,651
(16,312)
(488)
(12,282)
(15,573)
14,603
68
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
8. Earnings before interest and taxation (continuing operations)
Earnings before interest and taxation has been arrived at after charging/(crediting):
Amortisation of intangibles in administrative expenses
Depreciation of property, plant and equipment in administrative expenses
Depreciation of property, plant and equipment in cost of sales
Depreciation of right-of-use assets in administrative expenses
Depreciation of right-of-use assets in cost of sales
Net foreign exchange loss/(gain) on trading monetary items
Gain on disposal of property, plant and equipment (Note 6)
Impairment of goodwill (Note 17)
Impairment of other intangible assets (Note 18)
Impairment of property, plant and equipment (Note 19)
Impairment of contract asset
Cost of inventories recognised as an expense
Change in provision for inventory obsolescence
Staff costs (Note 9)
Impairment losses recognised on trade receivables
Recovery of previously impaired trade receivables
Auditors’ remuneration (Note 10)
9. Staff costs (continuing operations)
The average monthly number of employees (including Executive Directors) was:
Operations and administration
Pilots and cabin crew
Aircraft engineering
Year ended
2023
$’000
Year ended
2022
$’000
3,125
1,088
1,961
610
4,002
173
(238)
2,160
3,341
1,167
1,923
10,915
385
54,074
389
(2,072)
1,352
2,658
1,229
2,699
666
2,683
(3,105)
(1,741)
−
−
2,640
−
13,416
(582)
46,022
246
(6)
1,102
Year ended
Year ended
2023
Number
2022
Number
260
207
216
683
265
149
216
630
Average staff numbers employed in discontinuing activities in the period to 3 November 2023 were 767 (2022:
603) comprising 197 (2022: 172) in operations and administration and 570 (2022: 431) in aircraft engineering.
69
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Their aggregate remuneration comprised:
Wages, salaries and benefits
Social security costs
Equity-settled share-based payments (Note 36)
Pension costs
Year ended
2023
£000
Year ended
2022
£000
47,788
4,549
157
1,580
54,074
40,761
3,665
197
1,399
46,022
Total staff remuneration for employees involved in discontinuing activities in the period to 3 November 2023
were $82.3m (2022: $64.1m).
No share option transactions were approved during the year. Details of prior year share awards are included in
note 36.
Retirement benefit schemes
The Group operates defined contribution retirement benefit schemes for all qualifying employees. The assets of
the schemes are held separately from those of the Group in funds under the control of independent trustees. As
at 31 December 2023, contributions of $342,000 (2022: $273,000) due in respect of the current reporting period
had not been paid over to the schemes. Details of the other long-term employee benefits accrual, relating to the
Jet East long-term incentive plan, are contained in note 25.
Directors’ emoluments
As all the directors are remunerated in Pounds Sterling, the disclosure has been presented in that currency.
The remuneration of the Directors was as follows:
Emoluments
Pension costs
Year ended
2023
£000
Year ended
2022
£000
2,786
1,377
144
122
2,930
1,499
Discretionary bonus awards for 2022 were determined after the date of the 2022 financial statements. They
were, therefore, not disclosed in the 2022 financial statements. However, the above figures have been updated
to reflect these payments of $428,000.
Pension costs relate to 3 directors (2022:3) and include contributions to defined contribution schemes and cash
paid in lieu of contributions.
The Group considers the directors of the Company to be the key management personnel.
The above amounts for remuneration include the following in respect of the highest paid director:
70
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Emoluments
Pension costs
Year ended
2023
£000
Year ended
2022
£000
1,185
580
75
73
1,260
653
The highest paid director held 526,526 (2022:526,526) share options as at 31 December 2023. No share options
were issued or exercised during the year (2022:Nil).
10. Auditor’s remuneration
Audit of the Group’s and Company’s financial statements
Audit of the financial statements of subsidiaries
Other non-audit services
Year ended
2023
$’000
Year ended
2022
$’000
955
426
31
1,412
765
337
-
1,102
Auditor’s remuneration above includes the audit of the US MRO business.
11. Leases (continuing operations)
Amounts recognised in income statement
The consolidated income statement shows the following amounts relating to leases:
Depreciation charge of right-of-use assets
Leasehold property
Fixtures, fittings and equipment
Aircraft
Vehicles
Total depreciation charge of right-of-use-assets
Interest expense (included in finance cost)
Expenses relating to short-term leases of twelve months or less
Loss on derecognition of leases
Year ended
2023
$’000
Year ended
2022
$’000
2,725
43
1,785
59
4,612
2,817
736
20
2,845
26
426
52
3,349
1,747
594
37
The Group has certain leases that include extension or termination options. Management exercises judgement
in determining whether lease extensions and termination options are reasonably certain to be exercised.
Set out below are the undiscounted potential future rental payment relating to the period following the exercise
date of extension and termination options that are not included in the lease term:
Within
five years
$’000
More than
five years
$’000
Total
$’000
Extension options expected not to be exercised
6,266
16,289
22,555
Termination options expected to be exercised
−
104
104
71
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
12. Finance income (continuing operations)
Interest income on financial assets
Total finance income
Year ended
2023
$’000
Year ended
2022
$’000
1,331
1,331
91
91
In the current year, interest income on financial assets includes $667,000 (2022: $74,000) of interest received on
the recovery of previously written-off receivables.
13. Finance expense (continuing operations)
Foreign currency translation on intercompany balances
Foreign currency translation on borrowings
Interest on borrowings
Discounting on provisions (Note 30)
Interest on lease liabilities (Note 27)
Amortisation of loan arrangement fees
Other similar charges payable
Total finance costs
14. Taxation (continuing operations)
Year ended
2023
$’000
Year ended
2022
$’000
1,697
1,931
875
13
2,817
25
101
7,459
2,306
3,604
1,283
16
1,747
151
3
9,110
Corporation tax:
Current tax charge:
Current year charge
Adjustment in respect of prior years
Current tax charge/(credit)
Deferred tax charge:
Current year charge/(credit)
Adjustment in respect of prior years
Deferred tax (credit)/charge (Note 15)
Total tax charge/(credit) for the year
Year ended 2023
$’000
Year ended 2022
$’000
Adjusted
result
Adjusting
items
Statutory
result
Adjusted
result
Adjusting
items
Statutory
result
18
11
29
2
67
69
98
−
−
−
−
−
−
−
18
11
29
2
67
69
98
21
(38)
(17)
(49)
7
(42)
(59)
−
−
−
−
−
−
−
21
(38)
(17)
(49)
7
(42)
(59)
The tax charge for the year relating to discontinuing activities was a credit of $873,000 (2022: credit of $826,000)
of which a charge $163,000 (2022: charge of $107,000) related to current tax and a credit of $1,036,000 (2022:
credit of $933,000) related to deferred tax.
72
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The tax charge for the year, based on the tax rate in the United Kingdom, can be reconciled to the profit per the
income statement as follows:
Year ended 2023
$’000
Year ended 2022
$’000
Adjusted
result
Adjusting
items2
Statutory
result
Adjusted
result
Adjusting
items2
Statutory
result
Loss before tax
(9,105)
(11,606)
(20,711)
(1,469)
(4,836)
(6,305)
(2,142)
(2,729)
(4,871)
(279)
(919)
(1,198)
Tax at the corporation tax rate of 23.52% (2022:
19%)
Effects of:
Other expenses not deductible/income not
taxable
Foreign exchange differences on consolidation
Profits exempt from tax in overseas jurisdiction
Group relief with discontinued operations
Non-deductible – share-based payments
Adjustment in respect of prior years
Effect of tax rates in different jurisdictions
Effects of change in tax rate1
Tax losses in the year not recognised in
deferred tax
(1,003)
648
(409)
1,116
(35)
78
460
1
502
–
106
–
–
–
239
–
1,384
1,882
Total tax (credit)/charge for the year
98
–
(501)
648
(303)
1,116
(35)
78
699
1
3,266
98
87
(419)
(373)
–
(55)
(30)
(35)
–
1,045
(59)
234
–
83
–
–
–
545
–
57
–
321
(419)
(290)
–
(55)
(30)
510
–
1,102
(59)
1 The UK Finance Act 2021 enacted a change in the UK corporation tax rate from 19% to 25% from 1 April 2023.
2 The Adjusting items reflects the tax effect of Adjusting items disclosed within the Adjusted Items column of the consolidated income
statement and explained in further detail in Note 16.
15. Deferred tax
The following are the major deferred tax liabilities and assets recognised by the Group and movements thereon
during the current and prior reporting period.
(Liabilities)/assets at 1 January 2022
Credit/(charge) in year (Note 14)
Acquired
intangibles
$’000
(1,590)
384
(Liabilities)/assets at 31 December 2022
(1,206)
Credit/(charge) in year
Disposals
184
1,022
(Liabilities)/assets at 31 December 2023
–
Fixed asset
and other
temporary
differences*
$’000
Deferred
consideration on
US Air Associate
temporary differences
$’000
37
590
627
(909)
(253)
(535)
161
(161)
–
–
–
–
Tax losses
$’000
5,310
163
5,473
225
Total
$’000
3,918
976
4,894
(500)
(5,102)
(4,333)
596
61
* Includes $61k of deferred tax assets and $596k of deferred tax liabilities.
Acquired intangibles represent the value of the deferred tax liability which arises on the fair value of acquired
intangibles. The liability is valued at the tax rate applicable to the jurisdiction where the intangibles are located.
73
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Deferred tax assets and liabilities are offset where the Group has a legally enforceable right to do so. The following
is the analysis of the deferred tax balances for financial reporting purposes:
Deferred tax asset due after more than one year
Deferred tax liability
Net deferred tax asset
Estimation uncertainty
2023
$’000
657
(596)
61
2022
$’000
6,100
(1,206)
4,894
The Group has recognised deferred tax assets on both timing differences and on taxable losses. In recognising
these assets, management have reviewed the future expected profitability of the business in each tax jurisdiction
and the ability to utilise existing taxable losses.
The Group has the following tax losses, which are subject to relevant regulatory review and approval as applicable
to the relevant jurisdiction:
2023
Recognised
$’000
2,384
−
−
−
−
UK
US federal
US state
Poland
HK
2022
Recognised
$’000
2023
Unrecognised
$’000
2022
Unrecognised
$’000
2,124
18,466
17,444
−
−
8,474
−
−
529
6,064
15,067
26,863
16,240
−
262
5,684
49,049
2023
Total
$’000
10,858
−
−
529
6,064
17,451
Tax losses
2,384
38,034
The above losses represent the following value at tax rates applicable at the balance sheet date:
2023
Recognised
$’000
2022
Recognised
$’000
2023
Unrecognised
$’000
2022
Unrecognised
$’000
596
−
−
−
531
4,942
−
−
2,118
–
101
1,001
6,716
3,410
50
938
2023
Total
$’000
2,714
–
101
1,001
UK
US
Poland
HK
Potential tax benefit
of tax losses
2022
Total
$’000
28,987
34,706
17,444
262
5,684
87,083
2022
Total
$’000
7,247
8,352
50
938
596
5,473
3,220
11,114
3,816
16,587
Losses in the UK carried forward indefinitely. Tax losses in Poland can be carried forward for 5 years. Carry
forward of losses in the US are subject to local state level rules.
A deferred tax asset in respect of tax losses has been recognised in the UK to the extent that it offsets deferred
tax liabilities in other UK entities. A deferred tax asset has not been recognised in respect of the remaining UK
tax losses due to uncertainty with regards to timing and amount of future taxable profits against which the tax
losses could be utilised.
In Poland the entity is a start-up and until the business is established, future profits are uncertain hence the asset
has not been recognised. In Hong Kong, management have not recognised deferred tax assets on losses as the
current business is not operating.
74
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
16. Adjusting items (continuing operations)
Adjusting items relating to discontinued activities are disclosed in note 7. The Adjusted result relating to continued
activities has been arrived at after the following Adjusting items:
Year ended
2023
$’000
Year ended
2022
$’000
Exceptional items:
– Transaction income
– Transaction costs
– Integration and business re-organisation costs
– Legal costs
– Onerous contract provision (Note 30)
– Impairment of assets under construction (Note 19)
– Impairment of goodwill (Note 17)
– Impairment of other intangible assets (Note 18)
– Impairment of contract assets
Total exceptional items
Other Adjusting items:
Equity-settled share-based payments expense
Amortisation of acquired intangible assets
Adjusting items in loss before interest and taxation
Exchange differences on forgiveness of loans
Adjusting items in loss before interest and taxation
Tax related to Adjusting items
Adjusting items in loss for the year
Transaction income
−
1,368
428
324
300
1,167
2,160
3,341
1,923
11,011
157
438
11,606
−
11,606
−
11,606
(126)
654
−
206
900
2,516
−
−
−
4,150
175
436
4,761
75
4,836
−
4,836
Transaction income during the prior period was in relation to the gain on disposal of Gama International Saudi
Arabia.
Transaction costs
Transaction costs during the year relate to corporate activity of the Group.
Integration and business re-organisation costs
Integration and business re-organisation costs relate to system and process optimisation activity.
Legal costs
Legal costs in the current and prior year principally relate to professional fees in relation to ongoing litigation in
respect of legacy cases, mainly relating to the Group’s collection of trade receivables and other non-recurring
legal matters.
Onerous contract provision
The provision for onerous contract costs relates to potential penalty payments under certain long-term
arrangements.
75
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Impairment of assets under construction
The impairment loss in the current year relates to the impairment of further development costs incurred during the
period in respect of the Business Aviation Centre at Sharjah International Airport in the UAE of $0.7m (2022:
$2.1m) and impairment of development costs in Jersey of $0.5m (2022: $0.4m).
Impairment of goodwill and other intangible assets
The impairment loss in the current year relates to impairment associated with T&O CGU, see note 21 for further
details.
Impairment of contract assets
The impairment loss in the current year relates to impairment associated with contract under performance in the
Group’s MRO activities.
Equity-settled share-based payments
Equity-settled share-based payment charges relate to share options issued to employees.
Amortisation of acquired intangible assets
Amortisation charges in respect of acquired intangible assets.
Exchange differences on forgiveness of loans
The prior year charge relates to foreign exchange losses arising on forgiveness of intercompany loans and the
impairment of intercompany loans.
Tax related to Adjusting items
The tax on Adjusting items reflects the deferred tax on deductible items before any non-recognition of deferred
tax.
76
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
17. Goodwill
Cost
At 1 January 2022
Exchange differences
At 31 December 2022
Disposals
Exchange differences
At 31 December 2023
Accumulated impairment losses
At 1 January 2022
Impairment loss
Exchange differences
At 31 December 2022
Disposals
Impairment loss
Exchange differences
At 31 December 2023
Carrying amount
At 31 December 2023
At 31 December 2022
$’000
47,514
(4,417)
43,097
(3,108)
2,071
42,060
25,278
787
(2,144)
23,921
(3,108)
2,160
1,004
23,977
18,083
19,176
The impairment loss of $787,000 in the prior year relates to the goodwill associated with the paint and interior
completion operation at Fort Lauderdale Executive Airport that was closed during the year-ended 31 December
2022. The impairment loss of $2,160,000 in the current year relates to the goodwill in Technology & Outsourcing
CGU. The current year disposals are in relation to the disposal of the US MRO Business which was announced
on the 3 November 2023.
The recoverable amount of goodwill is allocated to the following cash-generating units (CGUs):
Carrying amount
Business Aviation
Special Mission
Technology & Outsourcing
Impairment review
2023
$’000
7,591
10,492
–
18,083
Goodwill, together with other non-current assets, is assessed for impairment in Note 21.
2022
$’000
7,191
9,941
2,044
19,176
77
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
18. Other intangible assets
Cost
At 1 January 2022
Additions
Foreign exchange differences
At 31 December 2022
Additions
Disposals
Foreign exchange differences
At 31 December 2023
Amortisation and accumulated impairment losses
At 1 January 2022
Amortisation
Foreign exchange differences
At 31 December 2022
Amortisation
Impairment
Disposals
Foreign exchange differences
At 31 December 2023
Carrying amount
At 31 December 2023
At 31 December 2022
Licences
and brands
$’000
Customer
relations
$’000
Computer
software
$’000
1,181
20,838
–
–
1,181
–
(1,181)
–
–
227
236
–
463
199
–
(662)
–
–
–
718
–
(463)
20,375
–
(5,216)
217
15,376
14,542
938
(288)
15,192
860
–
(1,603)
164
14,613
763
5,183
12,706
1,974
(1,399)
13,281
2,064
–
788
16,133
4,302
2,222
(512)
6,012
2,687
3,341
–
398
12,438
3,695
7,269
Total
$’000
34,725
1,974
(1,862)
34,837
2,064
(6,397)
1,005
31,509
19,071
3,396
(800)
21,667
3,746
3,341
(2,265)
562
27,051
4,458
13,170
The carrying amount of customer relationships relate to:
Business Aviation MRO US: $nil (2022: $4.0m)
Business Aviation excluding MRO US: $0.4m (2022: $0.5m)
Technology & Outsourcing: $0.4m (2022: $0.6m)
Computer software costs comprise purchased software, such as operational and financial systems and the costs
of configuration and customisation of Software as a Service arrangements where control of the software exists.
Impairment review
Other intangible assets do not generate cash inflows from continuing use that are largely independent of those
from other assets or groups of assets. Consequently, recoverable amount for these assets is determined for the
CGU to which they belong.
Other intangible assets, together with other non-current assets, are assessed for impairment in Note 21.
78
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
19. Property, plant and equipment
Helicopters
$’000
Leasehold
improvement
$’000
Aircraft and
refurbishments
$’000
Fixtures,
fittings and
equipment
$’000
Motor
vehicles
$’000
Asset under
construction
$’000
Cost
At 1 January 2022
Additions
Disposals
Exchange differences
At 31 December 2022
Additions
Disposals
Exchange differences
At 31 December 2023
Accumulated depreciation
and impairment
At 1 January 2022
Charge for the year
Disposals
Impairment
Reclassification1
Exchange differences
At 31 December 2022
Charge for the year
Disposals
Impairment
Exchange differences
At 31 December 2023
Carrying amount
At 31 December 2023
At 31 December 2022
28,863
–
(23,025)
(5,838)
–
13,367
(13,367)
–
–
1,932
840
(2,272)
–
–
(500)
–
–
–
–
–
–
–
–
19,611
155
–
(1,718)
18,048
1,850
(4,747)
787
12,518
–
–
(1,328)
11,190
241
(128)
626
15,938
11,929
6,812
1,122
–
124
(29)
(539)
7,490
1,284
(2,910)
–
300
6,164
9,774
10,558
4,538
1,342
–
–
–
(516)
5,364
1,448
(91)
–
342
7,063
4,866
5,826
14,425
2,172
(96)
(677)
15,824
3,633
(9,700)
370
10,127
9,566
2,097
(75)
–
29
(427)
11,190
1,582
(5,922)
–
253
7,103
3,024
4,634
3,220
348
(126)
(29)
3,413
90
(2,960)
20
563
2,300
469
(116)
–
–
(16)
2,637
586
(2,847)
–
15
391
172
776
Total
$’000
83,246
5,191
(23,247)
(9,590)
55,600
20,348
(30,902)
1,803
46,849
29,757
5,870
(2,463)
2,640
–
(1,998)
33,806
4,900
(11,770)
1,167
910
29,013
4,609
2,516
–
–
7,125
1,167
–
–
8,292
4,609
–
–
2,516
–
–
7,125
–
–
1,167
–
8,292
–
–
17,836
21,794
1 Reclassifications relate to corrections in the categorisation of property, plant and equipment.
No borrowing costs were capitalised during the current and prior year.
In the prior year, on 27 September 2022, the Group completed the sale and leaseback of its helicopter assets
resulting in cash proceeds of $27.0m and a gain on disposal of $1.7m. The cash proceeds of $27.0m included
$4.2m of additional financing raised in the transaction.
The Group has entered into the aircraft sale and purchase agreement for two helicopters on 5 April 2023 which
were delivered on 25 August 2023 and 27 October 2023. This resulted in $13.4m helicopter additions, during the
year, which included $12.1m of purchase costs and $1.3m of additional costs capitalised. The Group has also
completed the sale and lease back transaction for these two helicopters as soon as these were delivered, resulting
in cash proceeds of $15.1m and gain on disposal of $0.2m. The cash proceeds of $15.1m included $1.3m of
additional financing raised in the transaction.
The assets under construction relate to the investment in the Sharjah Business Aviation Centre (“BAC”) project
and the Jersey Fixed Based Operations (“FBO”) project.
The Sharjah BAC project was fully impaired in the beginning of the financial year and additional expenditure of
$0.7m, which was incurred on the project during the current year, has also been impaired.
79
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Expenditure of $0.5m incurred during the year on the Jersey FBO project has been impaired due to the uncertainty
about securing the necessary funding for the project.
Total impairment costs of assets under construction of $1.2m (2022: $2.5m) were recognised in the year.
Impairment review
The other classes of property, plant and equipment do not generate cash inflows from continuing use that are
largely independent of those from other assets or groups of assets. Consequently, recoverable amount for these
assets is determined for the CGU to which they belong.
Property, plant and equipment, together with other non-current assets, is assessed for impairment in Note 21.
20. Right-of-use assets
Cost
At 1 January 2022
Additions
Disposals
Exchange differences
At 31 December 2022
Additions
Disposals
Exchange differences
At 31 December 2023
Accumulated depreciation and impairment
At 1 January 2022
Charge for the year – admin expenses
Charge for the year – cost of sales
Disposals
Exchange differences
At 31 December 2022
Charge for the year – admin expenses
Charge for the year – cost of sales
Disposals
Exchange differences
At 31 December 2023
Carrying amount
At 31 December 2023
At 31 December 2022
Leasehold
property
$’000
Fixtures, fittings
and equipment
$’000
63,843
8,056
(9,205)
(3,484)
59,210
4,114
(20,867)
1,740
44,197
27,776
638
4,779
(7,374)
(937)
24,882
620
3,974
(7,806)
617
22,287
21,910
34,328
136
224
(5)
(8)
347
–
(129)
12
230
18
25
27
(5)
(2)
63
55
10
(61)
2
69
161
284
Aircraft
$’000
–
3,341
–
403
3,744
33,023
–
209
36,976
–
–
426
–
(11)
415
–
1,785
–
65
2,265
34,711
3,329
Vehicles
$’000
319
198
(101)
(15)
401
283
(342)
13
355
121
3
103
(73)
(6)
148
3
101
(195)
5
62
293
253
Total
$’000
64,298
11,819
(9,311)
(3,104)
63,702
37,420
(21,338)
1,974
81,758
27,915
666
5,335
(7,452)
(956)
25,508
678
5,870
(8,062)
689
24,683
57,075
38,194
The aircraft additions during the current and prior years relate to the sale-and-leaseback transaction involving the
Group’s helicopters which is further described in Note 19 to the financial statements.
Impairment review
Right-of-use assets do not generate cash inflows from continuing use that are largely independent of those from
other assets or groups of assets. Consequently, recoverable amount for these assets is determined for the CGU
to which they belong.
Right-of-use assets, together with other non-current assets, are assessed for impairment in Note 21.
80
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
21. Impairment of non-current assets
The Group has identified three specific Cash Generating Units (CGU’s) which are as follows:
The Business Aviation CGU which provides services provided to our private and corporate clients to safely
enable their private jet travel requirements.
The Special Mission CGU which provides services to governments, charities and other bodies which rely
on aviation assets to perform a specialised, often time critical, mission.
The Technology & Outsourcing CGU represents advisory, technology, and outsourcing services to
aviation clients who seek to gain a decisive advantage using real and near real time intelligence.
As detailed in note 17 all three CGU’s have goodwill allocated to them and the specific amounts can be found
there. As a result, an impairment review was required for all three CGU’s.
Value-in-use calculations
The carrying value of all three CGU’s was considered in comparison to its value-in-use calculations. These
calculations were derived as follows:
Cash flow projections are based on the most recent financial forecasts, being the Group’s 2024 updated
Strategic Plan. These forecasts cover a period of five years.
The Group also considered the impact of Climate Change in determining operating assumptions
applicable to the forecast cash flows.
The discount rate reflects the current market assessment of the risks specific to each CGU and is
estimated from the weighted average cost of capital using the Capital Asset Pricing Model, after
considering the risk-free rate, equity market risk, beta, country risk, small stock premium, pre-tax cost of
debt, tax rates, and the debt to capital ratio applicable to each CGU.
The terminal value for each CGU is estimated by applying the Gordon Growth formula to the forecast
cash flows using the respective discount rate and long-term growth rate. The long-term growth rate
reflects the average of the long‑term growth rate for the countries in which the CGU operates.
The values assigned to the key assumptions represent management’s assessment of future trends in the industry
and have been based on historical data from both external and internal sources.
Business Aviation
The recoverable amount of the Business Aviation CGU was determined based on its value-in-use using
discounted cash flow projections from the Group’s five-year internal forecasts. The post-tax discount rate applied
to the cash flow projections is 12.6% (2022: 12.0%) and cash flows beyond the four-year period are extrapolated
using a 2.0% (2022: 1.6%) growth rate. The equivalent pre-tax discount rate would be 13.9% (2022: 14.9%).
The results of this impairment review confirmed that no impairment charge is required. In addition, the Group has
considered a number of reasonably possible changes in key assumptions, which could cause the carrying amount
to exceed the recoverable amount for the BA CGU. These include changes in EBITDA, the discount rate and the
long-term growth rate. The Group did not identify any reasonably possible scenarios which would result in an
impairment charge.
Special Mission
The recoverable amount of the Special Mission CGU was determined based on its value-in-use using discounted
cash flow projections from the Group’s five-year internal forecasts. The post-tax discount rate applied to the cash
flow projections is 12.6% (2022: 11.3%) and cash flows beyond the five-year period are extrapolated using a 1.6%
(2022: 0.8%) growth rate. The equivalent pre-tax discount rate would be 15.6% (2022: 14.7%).
The results of this impairment review confirmed that no impairment charge is required. In addition, the Company
has considered a number of reasonably possible changes in key assumptions, which could cause the carrying
amount to exceed the recoverable amount for the Special Mission CGU. These include changes in EBITDA, the
discount rate and the long-term growth rate. The Company did not identify any reasonably possible scenarios
which would result in an impairment charge.
81
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Technology & Outsourcing
The recoverable amount of the Technology and Outsourcing CGU was determined based on its value-in-use
using discounted cash flow projections from the Group’s five-year internal forecasts. In the prior year the
recoverable value was determined based on fair value less cost of disposal. The post-tax discount rate applied to
the cash flow projections is 12.6% and cash flows beyond the five year period are extrapolated using a 1.6%
growth rate. The equivalent pre-tax discount rate would be 15.3%.
The results of this impairment review resulted in an impairment charge of $5.5m (2022: $Nil) being recognised in
the year.
22. Inventories
Raw materials and consumables
Work in progress
Provision for obsolescence
2023
$’000
8,918
–
(4,486)
4,432
2022
$’000
12,667
4
(5,393)
7,278
The Directors consider that the carrying value of inventories is approximately equal to their fair value.
Estimation uncertainty
The key source of estimation uncertainty at the reporting date, that may have a significant risk of causing a
materially different outcome to the carrying amounts of inventories within the next financial year, relates to a
change in the net realisable value due to change in customer demand or obsolescence of certain inventory lines.
The Company provides for inventories on a sliding scale over the preceding eight years. As a result, inventory
older than eight years is written off in full. At 31 December 2023, the Board considers its assessment of net
realisable value to be appropriate based on best information available. If the provision rates applied to inventory
aged between one and seven years increased by 10ppts, the loss for the year would increase by $332,000.
82
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
23. Trade and other receivables
Financial assets
Amounts receivable for the sale of services
Loss allowance for expected credit losses
Accrued income1
Loss allowance for expected credit losses
Financial lease receivable
Total financial assets
Non-financial assets
Prepayments
Other debtors2
Total non-financial assets
Total trade and other receivables
Current
Non-current
Total trade and other receivables
2023
$’000
15,490
(938)
14,552
13,732
(598)
13,134
–
27,686
6,422
6,297
12,719
40,405
35,282
5,123
40,405
2022
$’000
35,987
(4,045)
31,942
21,320
(595)
20,725
916
53,583
4,056
2,045
6,101
59,684
58,271
1,413
59,684
1
2
Includes contract assets which are described in further detail below.
Includes deferred consideration of $1.7m in relation to the US disposal, see note 7.
The Directors consider that the carrying amount of trade and other receivables is approximately equal to their
fair value.
Amounts receivable for the sale of services
Amounts receivable for the sale of services are non-interest bearing and are generally on credit terms usual for
the markets in which the Group operates. Where appropriate, the Group assesses the potential customer’s credit
quality and requests payments on account, as a means of mitigating the risk of financial loss from defaults.
In the Business Aviation SBU, the Group commonly obtains security in the form of contractual lien, parent
company guarantee or a bank guarantee to support the trade receivables arising from aircraft management
agreements. A similar contractual right of lien is contained within the General Terms and Conditions for MRO
services and is also commonly contained within the terms and conditions of individual MRO services proposals
where stage payments for higher value work programmes are the norm. Where considered appropriate, a
requirement for full up-front payment is imposed.
At the year end, trade receivables within the Business Aviation SBU that are secured by contractual liens total
$4.8m (2022: $5.7m).
Amounts receivable for the sale of services include amounts which are past due at the reporting date but against
which the Group has not recognised a specific loss allowance for expected credit losses because there has not
been a significant change in credit quality and the amounts are still considered recoverable.
83
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Ageing of amounts receivable for the sale of services, net of loss allowance for expected credit losses
Not yet due
Less than 30 days
30-60 days
61-90 days
91-120 days
Greater than 120 days
Total
2023
$’000
2,267
2,536
1,305
980
1,506
5,958
2022
$’000
14,228
7,358
2,165
2,269
438
5,484
14,552
31,942
Loss allowance for expected credit losses
As there is no significant financing component to amounts receivable for the sale of services, the Group has
elected to apply the IFRS 9 simplified approach to measuring expected credit losses, using a lifetime expected
credit loss provision for amounts receivable for the sale of services, contract assets and accrued income. In
arriving at the loss allowance for expected credit losses, the gross receivable amount is analysed according to
risk and including a consideration of any credit insurance in place. In determining the recoverability of a trade
receivable, the Group considers any change in the credit quality of the trade receivable from the date credit was
initially granted up to the reporting date. The loss rates applied to each ageing bracket also reference historical
credit loss experience, as well as current and future expected economic conditions. No loss allowance for
expected credit losses is recognised in respect of other debtors.
The Group carries an expected credit loss allowance of $1.5m (2022: $4.6m), which relates to amounts receivable
for the sale of services and accrued income.
Ageing of impairments on amounts receivable for the sale of services
Not yet due
Less than 30 days
30-60 days
61-90 days
91-120 days
Greater than 120 days
Total
2023
$’000
117
48
56
33
309
973
1,536
2022
$’000
107
58
6
31
3
4,435
4,640
84
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Movement in the loss allowance for expected credit losses
At 1 January
Impairment losses recognised in income statement
Impairment reversal recognised in income statement
Recovery of previously written-off receivables
Amounts written off as uncollectible
Foreign exchange translation gains and losses
At 31 December
2023
$’000
4,640
389
(373)
(2,072)
(1,193)
145
1,536
2022
$’000
6,182
278
(53)
(1,015)
(390)
(362)
4,640
The $2.1m (2022: $1.0m) recovery of previously written-off in the current year relates to amounts recovered from
overdue receivables in Business Aviation.
The $1.2m (2022: $0.4m) write-off in the current year relates to the settlement of overdue receivables in Business
Aviation.
Sensitivity analysis on loss allowance for expected credit losses
The estimate of the loss allowance may vary from the actual amounts recovered if an individual becomes unable
to pay or able to pay. If a portion of the impaired receivable balance for the sale of services was recovered there
may be material credit to the income statement. Similarly, if the unimpaired receivable balance over 120 days of
$5,958,000 was unable to be recovered, there may be a material charge to the income statement. However, as
noted above, there are liens over the aircraft relating to certain unimpaired receivables over 120 days. If all
remaining gross receivable balances relating to the sale of services were impaired by an additional 1% of the
gross receivables balance, the loss allowance for expected credit losses would be increased by $161,000.
Accrued income
Accrued income is expected to be billed within the next twelve months, together with contract assets of $3,566,000
(2022: $5,099,000) comprising:
Costs associated with a Fleet Maintenance programme in the UK on a long-term contract, contract
assets of $707,000 (2022: $798,000).
Cost associated with supporting North Sea oil and gas operations in the southern North Sea from
Norwich Airport from 1 January 2024 using its fleet of four AW139 helicopters of $1,580,000 (2022:
$Nil).
Contract assets arising from design and modification projects of $Nil (2022: $1,634,000) in the UK.
Cost associated with commencement of Helicopter Emergency Medical Services (HEMS) on behalf of
the Scottish Ambulance Service on 1 June 2020 using its fleet of three Airbus H145 helicopters of
$173,000 (2022: $588,000).
Costs incurred to start up a maintenance contract at Luton Airport of $Nil (2022: $2,079,000).
Cost associated with commencement of Helicopter Emergency Medical Services (HEMS) on behalf of
the Welsh Air Ambulance Charity Trust on 1 January 2024 using its fleet of five Airbus H145 helicopters
of $1,106,000 (2022: $Nil).
Financial lease receivable
In the prior year the Group sub-leased a proportion of its hangar and office facility at the Trenton-Mercer airport
in New Jersey, USA. The Group designated the sub-lease as a finance lease because the sub-lease is for the
whole of the remaining term of the head lease.
The table below sets out the maturity analysis of the financial lease receivables:
85
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Less than one year
One to two years
Two to three years
Total undiscounted lease payments receivable
Unearned finance income
Net investment in the lease
2023
$’000
–
–
–
–
–
–
2022
$’000
306
636
54
996
(80)
916
No operating profit or loss is made on the sub-lease of this facility.
24. Cash and cash equivalents
For the purposes of the Consolidated Cash Flow Statement, cash and cash equivalents include cash on hand
and in banks, net of outstanding bank overdrafts. Cash and cash equivalents at the end of the financial year as
shown in the Consolidated Cash Flow Statement can be reconciled to the related items in the Consolidated
Balance Sheet as follows:
Cash and bank balances in the Consolidated Balance Sheet
Cash and cash equivalents are denominated in the following currencies:
United States Dollar
Sterling
Euro
United Arab Emirates Dirham
Other currencies
2023
$’000
2022
$’000
92,052
22,406
2023
$’000
17,978
73,150
671
234
19
2022
$’000
19,449
2,622
130
192
13
92,052
22,406
86
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
25. Trade and other payables
Financial liabilities
Trade and other payables
Accruals
Non-financial liabilities
Other long-term employee benefits accrual
Other taxation and social security
Income received in advance
Total trade and other payables
Current
Non-current
Total trade and other payables
Trade payables
2023
$’000
10,921
15,854
26,775
–
3,266
5,891
9,157
35,932
2023
$’000
35,932
–
35,932
2022
$’000
15,118
17,492
32,610
3,642
5,750
8,431
17,823
50,433
2022
$’000
46,770
3,663
50,433
Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs.
Trade and other payables are non-interest bearing and are generally on credit terms usual for the markets in
which the Group operates. The Group has financial risk management policies in place that target settlement within
agreed credit terms.
The Directors consider that the carrying amount of trade payables is approximately equal to their fair value.
Other long-term employee benefits accrual
Other long-term employee benefits accrual in the prior year related to the Jet East long-term incentive plan,
accounted for in accordance with IAS 19, with payments contractually linked to the continuing employment of
executives of Jet East as well as the business performance of the Business Aviation MRO US business. A
remuneration charge of $1.9m had been recognised within discontinuing operations for the current year (2022:
$1.8m). The total value of this liability immediately prior to the sale of the US MRO stood at $5.5m. This obligation
was discharged as part of the disposal of the Group’s US MRO operations and therefore the balance was $Nil as
at 31 December 2023.
Income received in advance
Income received in advance relates to advance payments for operating expenses incurred by the Group on
managed aircraft prior to these expenses being billed to the customer. The outstanding performance obligations
are expected to be fulfilled within the next twelve months. Income received in advance represents a contract
liability.
87
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
26. Current tax payables
Tax prepayments as of 1 January
Current tax liability as of 1 January
Net current tax liability as of 1 January
Tax credit/(charge) relating to prior periods
Current tax expense/(credit)
Payments during the year
Other taxes
Foreign exchange differences
Disposal of US MRO
Net current tax liability as of 31 December
Analysed as:
Current tax liability as of 31 December
27. Obligations under leases
2023
$’000
–
(533)
(533)
(257)
65
246
(31)
(4)
488
(26)
2022
$’000
27
(574)
(547)
63
(154)
66
21
18
–
(533)
(26)
(533)
At 1 January 2022
Additions
Finance expense
Modifications and disposals
Lease payments
Exchange differences and other
At 31 December 2022
Additions
Finance expense
Modifications and disposals
Lease payments
Exchange differences and other
At 31 December 2023
Leasehold
property
$’000
Fixtures, fittings
and equipment
$’000
47,579
4,662
2,400
(810)
(6,874)
(2,441)
44,516
3,943
2,344
(12,102)
(5,855)
1,232
34,078
117
224
12
–
(64)
(3)
286
–
12
(34)
(117)
10
157
Aircraft
$’000
–
7,894
113
–
(1,377)
984
7,614
34,440
1,083
–
(4,691)
884
39,330
Vehicles
$’000
306
198
18
–
(123)
(134)
265
277
16
(157)
(111)
9
299
Total
$’000
48,002
12,978
2,543
(810)
(8,438)
(1,594)
52,681
38,660
3,455
(12,293)
(10,774)
2,135
73,864
The aircraft additions during the current year relate to the sale-and-leaseback transaction involving the Group’s
helicopters which is further described in Note 19 to the financial statements.
Maturity analysis – contractual undiscounted cash flows:
Less than one year
One to five years
More than five years
Total undiscounted lease liabilities at 31 December
Lease liabilities included in the consolidated balance sheet at 31 December:
Current
Non-current
Total lease liabilities at 31 December
2023
$’000
15,291
46,322
47,953
109,566
10,676
63,188
73,864
2022
$’000
10,787
23,368
53,035
87,190
11,053
41,628
52,681
88
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Average incremental borrowing rates applied across the Group were:
Leasehold property
Vehicles
Aircraft
Fixtures, fittings and equipment
2023
%
6.0
6.5
7.5
6.4
2022
%
5.8
4.9
5.5
6.1
Property leases with a remaining lease term of more than ten years have been adjusted to reflect the additional
security afforded by the leased asset on the cost of borrowing. An asset specific adjustment of 0.69% has been
applied to the rates of these leases.
28. Borrowings
Secured borrowing at amortised cost
Bank borrowings
Unsecured borrowing at amortised cost
Other loans
Total borrowings
Bank borrowings
Other loans
Amount due for settlement within 12 months
Bank borrowings
Other loans
Amount due for settlement after 12 months
2023
$'000
2022
$'000
11,155
34,818
–
11,155
914
–
914
10,241
–
10,241
1,290
36,108
30,811
414
31,225
4,007
876
4,883
89
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Changes in borrowings are tabulated below:
Long-term
Short-term
At 1 January 2022
Cash flows:
Repayments
Proceeds
Non-cash:
Foreign currency translation on borrowings in profit or
loss (Note 13)
Exchange differences
Forgiveness of PPP loan
Arrangement fee movement
Reclassification
At 31 December 2022
Cash flows:
Repayments
Proceeds
Non-cash:
Exchange differences
Arrangement fee movement
At 31 December 2023
Analysis of borrowings by currency:
31 December 2023
Bank borrowings
31 December 2022
Bank borrowings
Other loans
$’000
26,979
-
4,313
-
-
-
-
(26,409)
4,883
(5,547)
10,686
323
(104)
10,241
$’000
40,175
(46,525)
14,377
3,604
(5,965)
(1,000)
150
26,409
31,225
(35,839)
5,809
(86)
(195)
914
Sterling
$’000
US Dollars
$’000
Total
$’000
67,154
(46,525)
18,690
3,604
(5,965)
(1,000)
150
-
36,108
(41,386)
16,495
237
(299)
11,155
Total
$’000
11,155
-
11,155
24,110
-
24,110
10,708
1,290
11,998
34,818
1,290
36,108
90
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2023
Interest
Maturity
Facility (’000)
Drawn (Local
currency) (’000)
Drawn
(Presentation
currency) ($’000)
Close Brothers Term Loan
BOEBR + 4.15%
24-Apr-28
GBP 8,847
GBP 8,847
11,263
Bank borrowing before
arrangement fees
Capitalised loan arrangement
fees
Bank borrowings
2022
HSBC RCF
HSBC Term loan
Great Rock RCF
Interest
Maturity
Facility (’000)
Drawn (Local
currency) (’000)
11,263
(108)
11,155
Drawn
(Presentation
currency) ($’000)
See below
14-Nov-22
-
-
-
See below
31-Jan-23
GBP 20,000
GBP 20,000
24,124
SOFR + 6.25%
28-Dec-26
USD 15,000
USD 6,000
6,000
Great Rock Term loan
SOFR + 6.75%
28-Dec-26
USD 5,000
USD 5,000
5,000
Bank borrowing before
arrangement fees
Capitalised loan arrangement
fees
Bank borrowings
Bank borrowings
35,124
(306)
34,818
On 31 December 2021, the Group had facilities agreements for a £20m term loan secured with HSBC and a credit
facility with Great Rock Capital Partners Management LLC ("Great Rock"). This facility totalled $25m and
comprised a term loan of $6.5m and a RCF of $18.5m. $20m of this facility was available immediately, with a
further $5m available contingent on future trading performance. On 28 December 2022, the Group drew down
$5m under the term loan and $6m under the RCF. The HSBC term loan, Great Rock term loan, and Great Rock
RCF were subject to customary banking security arrangements.
The term loan with HSBC was repaid in full on 25 January 2023. The facility with Great Rock was repaid in full on
3 November 2023 as part of the sale of the Group’s US MRO operations.
On 3 March 2023, the Group received $11.6m from Close Brothers by way of a loan secured by a mortgage over
the Group’s owned aircraft.
Bank borrowings of $11.2m as of 31 December 2023 related the outstanding balance on the Close Brothers
facility.
Other loans
Other loans as of 31 December 2022 comprised:
A $1m unsecured loan with the Group’s primary customer in the US that bears no interest and is repayable
in 60 monthly instalments from January 2023 to December 2027.
Other unsecured loans totalling $0.3m repayable during 2023.
These loans were repaid in full in November 2023 as part of the sale of the Group’s US MRO operations.
91
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
29. Other financial liabilities
Deferred consideration recognised on acquisition, adjusted for discounting
Reduction in deferred consideration recognised on acquisition, adjusted for discounting
Unwind of discount on deferred consideration
Due within one year
2023
$’000
–
–
–
–
–
2022
$’000
533
(212)
14
335
335
335
On the acquisition of Jet East Aviation Corporation LLC, the fair value of deferred consideration was estimated at
$533,000. The value decreased to $335,000 as of 31 December 2022 (2021: $546,000) following an adjustment
of $212,000 to the amount recognised on acquisition. This amount was subsequently settled during 2023.
30. Provisions for liabilities
Closure
provision
$’000
Onerous
contract
provisions
$000
Dilapidations
provision
$’000
Employees’
end of
service
provision
$’000
Integration
provision
$’000
-
315
900
-
-
-
900
300
–
–
–
–
–
(33)
16
298
99
–
10
13
738
214
(50)
–
–
58
155
(41)
–
–
142
(128)
–
–
1,200
420
916
902
172
863
3,135
Obligations
associated
with
construction
projects
$’000
-
Total
$’000
1,120
863
2,123
-
-
(91)
(33)
16
(172)
–
–
–
–
222
(837)
–
–
591
(965)
10
13
248
2,784
2023
$’000
2,078
706
2,784
2022
$’000
2,250
885
3,135
9
(9)
–
–
–
–
–
–
–
–
–
At 1 January 2022
(Credit)/charge to the income
statement during the year
Utilised during the year
Foreign exchange
Discounting (Note 13)
At 31 December 2022
(Credit)/charge to the income
statement during the year
Utilised during the year
Foreign exchange
Discounting (Note 13)
At 31 December 2023
Current
Non-current
Total
The closure provision at 1 January 2022 related to the reduction of business activities in Saudi Arabia.
The provision for onerous contracts relates to potential penalty payments under certain long-term arrangements.
92
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The dilapidations provision relates to leases entered into during 2020 and 2023.
Provision for employees’ end of service indemnity relates to operations in the UAE. The provision in relation to
the UAE operations is made in accordance with the UAE labour laws and is based on current remuneration and
cumulative years of service at the reporting date.
The integration provision in the prior year related to severance costs following the acquisition of Jet East and this
business was discontinued in 2023.
The obligations associated with construction projects relates to obligations associated with the construction of the
Sharjah hangar.
31. Deferred revenue
Current
Total
2023
$’000
9,717
9,717
2022
$’000
9,214
9,214
The deferred revenue arises in respect of management fees, maintenance contracts and SaaS contracts invoiced
in advance, all of which are expected to be settled in the next twelve months. Deferred revenue represents a
contract liability. Deferred revenue of $9.7m (2022: $9.2m) is a contract liability as is income received in advance,
disclosed in Note 25, of $5.9m (2022: $8.4m). Total contract liabilities are $15.6m (2022: $17.6m).
32. Issued capital and reserves
Ordinary shares: authorised, issued and fully paid
At 1 January 2022
Shares issued
At 31 December 2022
Shares issued
At 31 December 2023
Number
£’000
$’000
63,686,279
275,000
63,961,279
–
63,961,279
637
3
640
–
640
954
4
958
–
958
The Company has one class of ordinary shares with a nominal value of £0.01 and no right to fixed income.
Share premium
At 1 January 2022
Shares issued
At 31 December 2022
Shares issued
At 31 December 2023
$’000
63,502
210
63,712
–
63,712
Share premium represents the amount subscribed for share capital in excess of its nominal value, net of historic
placement fees of $1,987,000 (2022: $1,987,000).
Other reserves
Merger relief reserve
$’000
Reverse takeover
reserve
$’000
Other reserve
$’000
Share-based
payment reserve
$’000
Total
$’000
93
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
At 1 January 2022
108,595
(95,828)
20,336
1,894
34,997
Share-based payment expense (Note
36)
Transfer for lapsed options
At 31 December 2022
Share-based payment expense (Note
36)
Transfer for lapsed options
At 31 December 2023
–
–
–
–
–
–
108,595
(95,828)
20,336
–
–
–
–
–
–
108,595
(95,828)
20,336
158
(168)
1,884
157
(194)
1,847
158
(168)
34,987
157
(194)
34,950
The merger relief reserve represents differences between the fair value of the consideration transferred and the
nominal value of the shares. The merger relief reserve arose in 2015 due to reverse takeover. The reserve was
increased in 2016 following the acquisition of Aviation Beauport Limited, when shares were included as part of
the consideration.
The reverse takeover reserve represents the balance of the amount attributable to equity after adjusting the
accounting acquirer’s capital to reflect the capital structure of the legal parent in a reverse takeover.
Other reserve is the result of the application of merger accounting to reflect the combination of the results of Gama
Aviation (Holdings) Jersey Limited with those of Gama Holding FZC, following the share for share exchange
transacted on 16 December 2014.
The share-based payment reserve represents the credit to equity to recognise the value of equity-settled share-
based payments. Refer to Note 36 for further details of these plans. Following the lapse of options during the year
under the ASOP, CSOP, and LTIP plans, $194,000 (2022: $168,000) was transferred from other reserves to
accumulated earnings.
There is an employee benefit trust that is affiliated with the Group. However, the Group does not have control of
this trust and, as a result, the trust is not consolidated. Consequently, no own share reserve is recognised. At the
end of the reporting period, the employee benefit trust held 219,310 (2022: 219,310) shares. The fair value of
these shares at 31 December 2023 was $265,000 (2022: $155,000).
33. Distributions made and proposed
The Company did not pay an ordinary dividend during the year (2022: $nil) to shareholders.
The Board does not recommend a dividend for 2023 (2022: $nil).
On 29 April 2024 the Company announced the return of up to £32.6 million to Shareholders by way of a tender
offer at 95p per share. This was approved at an Extraordinary General Meeting held on 15 May 2024. Further
details are contained in note 40.
34. Non-controlling interest
At 1 January 2022
Total comprehensive income attributable to non-controlling interest
At 31 December 2022
Total comprehensive loss attributable to non-controlling interest
At 31 December 2023
$’000
93
279
372
(419)
(47)
The non-controlling interest in the current and prior year relates to a 49% shareholding in Gama Aviation FZC,
which is consolidated as the Company is exposed to variable returns from its involvement and can affect the
returns through its power over this company. In addition, the Group has a call option on the remaining
94
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
shareholding. There is an 80% profit sharing ratio attributable to the Group. As a result, a 20% non-controlling
interest has been recognised in the current and prior year.
Non-controlling interest in the current year also relates to a 50% shareholding in Bond Helicopters Limited. The
Company is deemed to have control over Bond Helicopters Limited as the Company's Directors have a casting
vote on the Board and are able to use this to control business decisions of the JV entity. Therefore, the results of
Bond Helicopters Limited are fully consolidated into the Group's financial statements, and a 50% non-controlling
interest has been recognised in the current year. Bond Helicopters Limited was incorporated in 2022, but did not
trade in 2022, so no non-controlling interest was recognised in the prior year.
Set out below is summarised financial information for Gama Aviation FZC and Bond Helicopters Limited, before
intercompany eliminations:
Gama Aviation FZC
Bond Helicopters Limited
Current assets
Current liabilities
Net current assets/(liabilities)
Non-current assets
Non-current liabilities
Net assets/(liabilities)
Accumulated non-controlling interest
Revenue
Profit/(loss) for the year
Other comprehensive income
Total comprehensive income
35. Related party transactions
2023
$’000
9,640
2022
$’000
9,045
(8,506)
(7,195)
1,134
1,850
9
−
1,143
227
2023
$’000
25
−
1,875
372
2022
$’000
23,778
28,050
2023
$’000
4,500
(8,198)
(3,698)
24,855
(21,718)
(561)
(274)
2023
$’000
−
(728)
1,396
(548)
−
−
−
(728)
1,396
(548)
2022
$’000
−
−
−
−
−
−
−
2022
$’000
−
−
−
−
Balances and transactions between the Company and its subsidiaries, which are related parties, have been
eliminated on consolidation and are not disclosed in this note. Transactions between the Group and its associates
are disclosed below.
The Company and its subsidiaries have a policy requiring full disclosure to, and pre-approval by, the Board of
transactions contemplated with related parties.
List of related parties, including associates
The following list is presented in accordance with the objectives of IAS 24 Related Party Disclosures and all
relationships are disclosed according to their substance rather than their legal form:
Mr M A Khalek – has significant influence over the Company through his position as Chief Executive Officer
and his ownership interest more than 20%.
EBAA – is the European business aviation association in which Mr M A Khalek serves on the Board of
Governors.
Air Arabia/Felix Trading Company LLC – Felix Trading Company LLC (“Felix”) has a significant ownership
interest in Gama Aviation FZE, which is controlled by the Group (see Note 2). The principals of Felix also have
significant ownership interest in Air Arabia, which is a client of the Group.
95
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Mr Canning Fok – is an Executive Director of CK Hutchison Holdings which has an indirect shareholding of
29.6% in the Company.
Associates
GB Aviation Holdings LLC – is a joint venture in which the Group owns a 50% membership interest.
Trading transactions
During the year, Group companies entered into the following transactions with related parties who are not
members of the Group: Material transactions with related parties
Sale of services
Purchase of services
EBAA
Air Arabia/Felix Trading Company LLC
Mr Canning Fok
Mr M Khalek
2023
$’000
−
240
433
−
2022
$’000
−
181
1,585
25
2023
$’000
17
150
−
−
The following amounts were outstanding at the balance sheet date for related parties at that date:
EBAA
Air Arabia/Felix Trading Company LLC
Mr Canning Fok
Mr M Khalek
Amounts owed by
related parties
Amounts owed to
related parties
2023
$’000
−
−
−
−
2022
$’000
−
154
−
−
2023
$’000
−
28
−
−
2022
$’000
11
175
−
−
2022
$’000
−
129
−
−
Material transactions with related parties
During the year, within the Business Aviation SBU, sales of services of $433,000 (2022: $1,585,000) were made
to Mr Canning Fok.
Remuneration of key management personnel
The remuneration of the Executive Directors of the Group, who are also the key management personnel of the
Group, are set out in note 9 to the accounts. As all the key management personnel are remunerated in Pounds
Sterling, the disclosure has been presented in that currency.
Ultimate controlling party
The Company’s ordinary shares were publicly traded on the AIM of the London Stock Exchange, so there is no
single controlling party. The Company shares were formally delisted on 31 May 2024 (see note 40).
36. Share-based compensation
Equity-settled share option schemes
Share options are awarded to employees under three plans:
Gama Aviation Plc Company Share Option Plan 2018 (CSOP)
Gama Aviation Plc Additional Share Option Plan 2018 (ASOP)
96
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Gama Aviation Plc Long-Term Incentive Plan 2021 (LTIP)
The plans are designed to provide long-term incentives for employees to deliver long-term shareholder returns.
Participation in the plan is at the Board’s discretion, and no individual has a contractual right to participate in the
plan or to receive any guaranteed benefits.
Performance conditions may be specified under any of the schemes. No options granted to date under the CSOP
and ASOP have performance conditions. Under the LTIP, the number of options which vest are subject to a
performance condition based on the Company's average share price over the 30 days following release of the
Company's results for the year ending 31 December 2023. However, these conditions may be varied or waived.
Options are granted under the plans for no consideration and carry no dividend or voting rights.
The normal vesting period for all schemes is three years, however, options over 155,000 shares were granted to
Directors on 29 March 2021 and these vested immediately (the “Director ASOP Awards”).
Under the CSOP and ASOP, the exercise price of options is calculated based on the weighted average price at
which the Company’s shares were traded on the Alternative Investment Market of the London Stock Exchange
during the week up to and including the date of the grant. Under the LTIP, the exercise price is 1.0 pence.
When exercised, each option is convertible into one ordinary share at the exercise price.
If options remain unexercised after a period of ten years from the grant date, the options expire. If an employee
leaves employment of the Group due to injury, ill health, disability, retirement, redundancy or where the
employee’s employer ceases to be part of the Group, a proportion (being the proportion of the original shares
granted that relate to the period after leaving and prior to vesting) of options are forfeited 90 days after leaving,
with the remaining options being forfeited six months after leaving. Options are forfeited 90 days after leaving if
the employee leaves the Group before the options vest for any other reason.
Set out below are summaries of options granted under the plans:
2023
2022
Average exercise
price per share
option
(pence)
37.4
–
–
–
49.1
35.9
71.4
Number of
options
‘000
3,081
–
–
–
(136)
2,945
239
Average exercise
price per share
option
(pence)
34.6
–
–
–
25.4
37.4
97.6
Number of
options
‘000
4,017
–
–
–
(936)
3,081
194
At 1 January
Granted during the year
Exercised during the year1
Surrendered during the year
Forfeited during the year
At 31 December
Vested and exercisable at 31 December
1 The weighted average share price at the date of exercise of options exercised during the year was nil pence (2022: nil pence)
No options expired during 2023 (2022: none).
Share options outstanding at the end of the year have the following expiry dates and exercise prices:
97
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Grant date
22 June 2018
22 June 2018
17 June 2019
26 March 2021
29 March 2021
29 March 2021
29 March 2021
TOTAL
Exercise price
Share options 31
December 2023
Share options 31
December 2022
Expiry date
(pence)
21 June 2028
21 June 2028
16 June 2029
25 March 2031
28 March 2031
28 March 2031
28 March 2031
205.5
205.5
91.5
39.0
68.8
1.0
1.0
‘000
23
38
48
636
911
1,159
130
2,945
'000
23
43
58
705
983
1,199
70
3,081
Weighted average remaining contractual life of
options outstanding at end of period
7.16 years
8.15 years
The estimated fair values of the awards under the CSOP and ASOP have been established using a Black Scholes
model. This model uses various inputs, including expected dividends, expected share price volatility and the
expected period to exercise.
The estimated fair values of the awards under the LTIP have been established using a Monte Carlo model. This
model uses various inputs, including expected dividends, expected share price volatility and the expected period
to exercise, and the likelihood of the market-based performance condition being met at the grant date.
The Replacement Awards have been accounted for under modification accounting, whereby the original fair value
expense for the Surrendered Awards has continued to be recognised over the original vesting period and an
additional incremental expense has been recognised over the vesting period of the Replacement Awards.
No options were granted during the year ended 31 December 2023 (2022: None).
Expenses arising from equity-settled share-based payment transactions
The compensation expense recognised in relation to the awards is based on the fair value of the awards at the
grant date.
Total expenses arising from share-based payment transactions recognised during the year as part of employee
benefit expense were as follows:
Options issued under equity-settled share employee option schemes plan1
Shares issued to former employees2
1
2
2022 includes discontinued operations of $3,000.
2022 includes discontinued operations of $172,000.
2023
$’000
157
–
157
2022
$’000
158
214
372
98
Net financial assets/(liabilities)
119,738
(111,794)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
37. Financial instruments and risk management
Financial assets and liabilities as defined by IFRS 9 and their estimated fair values are as follows:
Financial assets
at amortised cost
$’000
Financial liabilities
at amortised cost
$’000
Book value
total
$’000
At 31 December 2023
Financial assets
Cash and cash equivalents (Note 24)
Trade and other receivables (Note 23)
Financial liabilities
Trade and other payables (Note 25)
Borrowing (Note 28)
Lease obligation (Note 27)
At 31 December 2022
Financial assets
Cash and cash equivalents (Note 24)
Trade and other receivables (Note 23)
Financial liabilities
Trade and other payables (Note 25)
Borrowings (Note 28)
Lease obligation (Note 27)
Financial assets
Financial liabilities
at amortised cost
$’000
at amortised cost
$’000
Book value
total
$’000
92,052
27,686
–
–
–
22,406
53,583
–
–
–
–
–
92,052
27,686
(26,775)
(11,155)
(73,864)
(26,775)
(11,155)
(73,864)
7,944
–
–
22,406
53,583
(32,610)
(36,108)
(52,681)
(32,610)
(36,108)
(52,681)
(45,410)
Fair value
total
$’000
92,052
27,686
(26,775)
(11,155)
(73,864)
7,944
Fair value
total
$’000
22,406
53,583
(32,610)
(36,108)
(52,681)
(45,410)
Net financial assets/(liabilities)
75,989
(121,399)
The fair value of cash and cash equivalents, trade and other receivables, and trade and other payables
approximate their carrying amounts due to the short-term maturities of these instruments. The fair value of lease
obligations is calculated using the incremental borrowing rate. The fair value of borrowings is based on cash flows
discounted using the associated borrowing rate.
Financial risk management objectives
The Group is exposed to financial risks in respect of:
Capital risk;
Foreign currency;
Interest rates;
Liquidity risk; and
Credit risk.
A description of each risk, together with the policy for managing risk, is given below.
99
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
37.1 Capital risk management
The Group manages its capital to ensure that the Company and its subsidiaries will be able to continue as going
concerns while maximising the return to stakeholders through the optimisation of the debt and equity balances.
The capital structure of the Group consists of debt, which includes the borrowings disclosed in Note 28 and various
obligations under leases disclosed in Note 27, cash and cash equivalents and equity (comprising issued capital,
reserves and accumulated profit as disclosed in the consolidated statement of changes in equity).
The Board of Directors reviews the capital structure on a regular basis. As part of this review, the Board of
Directors considers the cost of capital and the risks associated with each class of capital, against the purpose for
which the capital is intended.
A combination of leases and borrowing are taken out to fund assets utilised by the Group. Borrowings are also
secured to support the ongoing operations and future growth of the Group.
37.2 Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of
changes in market prices. The Group’s activities expose it primarily to the financial risks of changes in foreign
currency exchange rates and interest rates.
There has been no change to the Group’s exposure to market risks or the way these risks are managed
and measured.
37.2.1 Foreign currency risk management
The Group undertakes transactions denominated in foreign currencies and is consequently exposed to exchange
rate fluctuations, in particular, to Sterling and Euro exchange rate fluctuations. The Group seeks to reduce foreign
exchange exposures arising from transactions in various currencies through a policy of matching, as far as
possible, receipts and payments across the Group in each individual currency.
The table below summarises the foreign exchange exposure on the net monetary position of entities against their
respective functional currency, expressed in each entity’s presentational currency. These currencies have been
considered as they are the most significant denominations of the Group.
100
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
GBP
$’000
USD
$’000
EUR
$’000
AED2
$’000
HKD
$’000
Other
$’000
Total
$’000
At 31 December 2023
Borrowings
Entities with functional currency USD
–
Entities with functional currency GBP
(11,155)
Entities with functional currency PLN3
–
Total borrowings
(11,155)
Obligations under leases
Entities with functional currency USD
–
Entities with functional currency GBP
(63,933)
Entities with functional currency PLN
–
Total obligations under leases
(63,933)
Cash
–
–
–
–
–
–
–
–
Entities with functional currency USD
6
1,004
Entities with functional currency GBP
73,144
16,974
Entities with functional currency PLN
–
–
Total cash
73,150
17,978
Net trade financial assets1
Entities with functional currency USD
Entities with functional currency GBP
Entities with functional currency PLN
Total net trade financial assets
Net exposure
1,171
(708)
–
463
1,836
(67)
–
1,769
Net monetary in USD entities
1,177
–
–
–
–
–
(9,931)
–
–
(9,931)
233
1
–
234
–
–
–
–
–
–
–
–
1
–
–
1
(654)
(32)
–
–
–
–
–
–
–
–
–
–
–
–
–
5
13
18
(64)
(31)
(62)
(654)
(32)
(157)
–
–
–
–
–
–
–
–
–
671
–
671
3
(481)
–
(478)
3
190
–
193
–
(11,155)
–
(11,155)
(9,931)
(63,933)
–
(73,864)
1,244
90,795
13
92,052
2,260
(1,287)
(62)
911
(9,267)
17,072
–
7,805
(10,427)
2,296
(8,131)
Net monetary in GBP entities
Net monetary in PLN entities
Total net exposure
At 31 December 2022
Net monetary in USD entities
Net monetary in GBP entities
–
–
16,907
–
1,177
16,907
(10,352)
(31)
1
–
–
–
(10,351)
(31)
(32)
–
(32)
–
2,803
2,803
89
(10,425)
(493)
(404)
1
(10,424)
4
–
4
(64)
(26)
–
(90)
(63)
(15)
(78)
1 Net trade financial assets per Note 23 of $27,686,000 and financial liabilities per Note 25 of $26,775,000
2 United Arab Emirates Dirham
3 Polish Zloty
Foreign currency sensitivity analysis
The following table details the Group’s sensitivity to a 10% change in the relevant foreign currencies. This
percentage has been determined based on the average market volatility in exchange rates in the previous
24 months. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and
adjusts their translation at the reporting date for a 10% change in foreign currency:
101
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
At 31 December 2023
Total effect on profit/(loss) of depreciation in
foreign currency exchange rates
At 31 December 2022
Total effect on profit/(loss) of depreciation in
foreign currency exchange rates
37.2.2 Interest rate risk management
GBP
$’000
USD
$’000
EUR
$’000
AED
$’000
HKD
$’000
Other
$’000
Total
$’000
(118)
(1,691)
(19)
1,035
3
9
(781)
3
(280)
40
1,043
–-
8
814
The Group is exposed to interest rate risk as its bank borrowings are subject to variable interest rates based on
SOFR and SONIA, as per the HSBC and Great Rock credit facility agreements.
The Group recognises that movements in interest rates might affect the amounts recorded in its profit and loss
for the year. Therefore, the Group has assessed:
Reasonably possible changes in interest rates at the end of the reporting period; and
The effects on profit or loss if such changes in interest rates were to occur.
Interest rate sensitivity analysis
The sensitivity analysis below has been based on the exposure to interest rates for non-derivative instruments
at the reporting date. For floating rate liabilities, the analysis is prepared based on the average liability held by the
Group over the year. A 1% increase or decrease in interest rates represents management’s assessment of the
reasonably possible changes in interest rates at the reporting date.
If interest rates had been 1% higher and all other variables were held constant, the Group’s loss for the year
ended 31 December 2023 would increase by $351,000 (2022: $498,000). The Company’s sensitivity to interest
rates has decreased during the current year due to the decrease in the value of loans held.
The Group’s cash balances are held in current bank accounts and earn interest at market rates.
37.3 Liquidity risk management
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
Ultimate responsibility for liquidity risk management rests with the Board of Directors. The Group manages liquidity
risk by maintaining adequate reserves and banking facilities, by continuously monitoring forecast and actual cash
flows, and by matching the maturity profiles of financial assets and liabilities wherever possible. There has been
no change to the Group’s exposure to liquidity risk or the way these risks are managed and measured during the
year. Further details are provided in the Strategic Report.
The maturity profile of the financial liabilities is summarised below. The table has been drawn up based on the
undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to
pay.
102
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Weighted
average
effective
interest rate
%
n/a
–1
6.0%
n/a
–1
3.0%
Less than
1 year
$’000
After more than
5 years
$’000
2-5 years
$’000
26,775
15,291
1,934
32,131
10,787
31,225
–
46,322
12,882
–
23,368
4,883
–
47,953
–
–
53,035
–
Total
$’000
26,775
109,566
14,816
32,131
87,190
36,108
At 31 December 2023
Trade and other payables (Note 25)
Lease liabilities (Note 27)
Bank borrowings (Note 28)
At 31 December 2022
Trade and other payables (Note 25)
Lease liabilities (Note 27)
Bank borrowings (Note 28)
1 Refer to Note 27, which provides the incremental borrowing rate for each category of lease.
37.4 Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss
to the Group. The Group is exposed to credit risk from its operating activities (primarily from trade receivables)
and from its financing activities, including cash balances with banks (see Note 24), and other financial instruments.
Amounts receivable for sale of services
Customer credit risk is managed by each business unit subject to the Group’s established policy, procedures, and
controls relating to customer credit risk management. The Group endeavours to only deal with creditworthy
counterparties and requests payments on account, where appropriate, as a means of mitigating the risk of
financial loss from defaults. Outstanding customer receivables and the Group’s exposure to credit risk is regularly
monitored.
Assets receivable for sale of services consist of many customers, coming from diverse backgrounds and
geographical areas. Ongoing review of the financial condition of the counterparty and ageing of financial assets
is performed. Further details are in Note 23.
The carrying amount of financial assets recorded in the financial statements at the reporting date represents the
Group’s maximum exposure to credit risk. There has been no change to the way credit risks are managed and
measured during the year.
38. Commitments for capital expenditure
In June 2017, a subsidiary of the Group, Gama Support Services FZE, entered into a Build Operate & Transfer
Agreement and a Concession Agreement with Sharjah Airport Authority under which it is committed to construct
a Business Aviation Centre at Sharjah Airport. As of 31 December 2023, the Group had contracted commitments
of $248,000 (2022: $585,000) in relation to phase 1 of the Business Aviation Centre. These have been accrued
for and subsequently impaired in the 31 December 2023 financial statements.
The Group had no other outstanding contracted commitments as of 31 December 2023 (2022: $nil).
39. Contingent liabilities
In the prior year Annual Report & Accounts the Company reported that it had recently received a letter before
action in respect of a possible legal claim against it for alleged damages. This matter did not result in any outflow
of funds and has now been closed.
In the usual course of business, the Company may receive various claims from customers, suppliers, and
employees. As at the date of this report the Company is not aware of any material claims which would materially
affect these financial statements.
103
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
40. Events after the balance sheet date
The following events occurred after the reporting date:
Acquisition of Specialist Aviation Services
As announced on 1 February 2024, the Group acquired the business of Specialist Aviation Services Limited
(“Specialist”), a helicopter special mission business, as part of a pre-pack acquisition from its appointed
administrators.
The acquisition of Specialist on 31 January 2024 was transacted by the Group’s wholly owned subsidiary Gama
Aviation (UK) Limited for $0.4m in cash. The transaction has been entirely funded from the Group’s existing
resources.
The primary reason for the acquisition includes:
•
•
•
Adds further scale and strength to Gama’s Special Mission strategic business unit (“SBU”) with some
£27m of annual revenue, three significant UK air ambulance charity contracts, six managed Leonardo
AW169 aircraft and two further national security contracts in the Middle East.
The additional capability is complementary to the Special Mission SBU adding a Leonardo Service Centre
in Staverton, Gloucestershire.
Operational synergies through combination of operations are identified.
The financial effects of this transaction have not been recognised at 31 December 2023. The operating results
and assets and liabilities of the acquired company will be consolidated from 1 February 2024.
A provisional calculation of purchase price accounting has been performed. The purchase price accounting will
be finalised once all facts and circumstances at acquisition date are established but within the twelve-month
measurement period permitted under IFRS 3 Business Combinations.
Tender offer
On 29 April 2024 the Company announced the return of up to £32.6 million to Shareholders by way of a tender
offer. This was approved at the Extraordinary General Meeting held on 15 May 2024. On the 24 May 2024 the
Company announced that the Tender Offer had closed at 1.00 p.m. on 23 May 2024 and valid tenders had been
received in respect of 25,168,934 Ordinary Shares, representing approximately 38.82 per cent. of the issued
share capital. As a result, £23.9m was returned to shareholders.
Delisting
Having considered the management time and the legal and regulatory burden associated with maintaining the
listing on the LSE AIM market, the Board concluded that it was in the best interest of the Company to cancel the
listing. This was approved by shareholders on 15 May 2024 and the Company’s shares were formally delisted on
31 May 2024.
104
PARENT COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2023
Non-current assets
Investments
Current assets
Trade and other receivables
Cash at bank and in hand
Total assets
Current liabilities
Trade and other payables
Borrowings
Net current assets/(liabilities)
Total assets less current liabilities
Total liabilities
Net assets
Capital and reserves
Called up share capital
Share premium account
Share-based payment reserve
Accumulated profits/(losses)
Equity shareholder funds
Note
4
6
7
8
9
10
10
10
2023
£’000
3,074
3,074
12,465
70,398
82,863
2022
£’000
51,412
51,412
9,182
3,252
12,434
85,937
63,846
(2,476)
-
(2,476)
80,387
(15,499)
(19,995)
(35,494)
(23,060)
83,461
28,352
(2,476)
(35,494)
83,461
28,352
640
46,458
1,396
34,967
83,461
640
46,458
1,448
(20,194)
28,352
As permitted by Section 408 of the Companies Act 2006, no separate Company profit and loss account has been
included in these standalone financial statements. The Company made a profit of £55.2m for the year (2022:
£5.1m loss) reflecting a profit on disposal of subsidiary undertakings of £44.7m.
The notes on pages 107 to 117 form part of these Parent Company financial statements.
The standalone financial statements of Gama Aviation Plc, registered number 07264678, on pages 105 to 117
were approved by the Board of Directors on 12 June 2024 and signed on its behalf by
Michael Williamson
Director
105
PARENT COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
Called up share
capital
£’000
Share premium
£’000
Share-based
payment reserve
£’000
Accumulated
profits/(losses)
£’000
At 1 January 2022
Shares issued
Loss for the year
Share-based payment expense
Lapsed and exercised options
At 31 December 2022
Profit for the year
Share-based payment expense
Lapsed and exercised options
637
3
–
–
–
46,298
160
–
–
–
640
46,458
–
–
–
–
–
–
At 31 December 2023
640
46,458
1,454
(15,072)
–
–
129
(135)
1,448
–
104
(156)
1,396
–
(5,122)
–
–
(20,194)
55,161
–
–
Total
£’000
33,317
163
(5,122)
129
(135)
28,352
55,161
104
(156)
34,967
83,461
106
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1. General information
As at 31 December 2023, Gama Aviation Plc (the “Company”) was a public limited company (company number
07264678) whose shares were listed on the Alternative Investment Market (AIM) of the London Stock Exchange
under the ticker symbol GMAA. Following approval by shareholders on 15 May 2024 the Company’s shares were
formally delisted on 31 May 2024 as part of a wider process which saw 25,168,934 Ordinary Shares, representing
approximately 38.82 per cent. of the issued share capital, participate in a tender offer to redeem their shares for
an offer price of 95 pence per ordinary share.
The Company is incorporated and domiciled in England in the United Kingdom. The address of the registered
office is 1st Floor, 25 Templer Avenue, Farnborough, Hampshire, England, GU14 6FE.
The Company is a holding company responsible for the management of a portfolio of subsidiaries and other
related undertakings involved in the provision of aviation services, including aviation design, maintenance,
operational management, charter, software and facilities expertise.
2. Accounting policies
Basis of preparation
These separate financial statements of the Company have been prepared in accordance with Financial Reporting
Standard 101 Reduced Disclosure Framework (“FRS 101”), in conformity with the requirements of the Companies
Act 2006.
The financial statements are presented in Sterling (£), rounded to the nearest thousand (£”000) unless otherwise
stated. The financial statements have been prepared under the historical cost convention.
Going concern
The Directors have concluded that the Company’s status as a going concern is dependent on that of the wider
Gama group, which is considered in note 3 of the group accounts and reproduced below.
To support their assessment of going concern, the Directors have reviewed detailed cash flow projections for the
Group for the period from the date of approval of these financial statements to 31 December 2025. The Directors
have also considered the outlook for the business beyond 31 December 2025 based upon its five-year strategic
plan.
The analysis takes account of the following, amongst other, relevant considerations:
Projected revenue, profit performance, working capital levels and the conversion of profits into cash flows,
The $11.2m loan from Close Brothers that completed on 3 March 2023, and which is secured on owned
aircraft,
Net current assets of $72.4m as at 31 December 2023
Net assets of $100.9m as at 31 December 2023,
Cash of $92.1m as at 31 December 2023,
The tender offer involving the return up to 95p a share to certain shareholders, and
Availability of financing and other income sources.
The Directors have also considered a severe but plausible downside scenario in which EBITDA is lower and
working capital outflows, funding costs and corporation tax rates are higher than base case projections.
In both the base case scenario and the severe but plausible downside scenario, the Directors are satisfied that
the Group has sufficient headroom to ensure that the Group will remain solvent and be able to pay its debts as
they fall due during a period of at least 12 months from the date of approval of these financial statements.
107
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Accordingly, after making appropriate enquiries, the Directors have, at the time of approving these financial
statements, a reasonable expectation that the Group has adequate resources to continue in operational existence
for the foreseeable future and, consequently, consider that it is appropriate to adopt the going concern basis in
preparing these interim financial statements.
Exemptions
The Directors have taken advantage of the exemption available under Section 408 of the Companies Act 2006
and not presented an income statement or a statement of comprehensive income for the Company in these
standalone financial statements. The profit for the year has been disclosed in the Statement of Changes in Equity
and on the face of the Statement of Financial Position.
The following disclosure exemptions have been adopted:
Preparation of a cash flow statement
Disclosures in respect of standards in issue not yet effective
The requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into
between two or more members of the Group as they are wholly owned within the Group
Disclosure of key management personnel compensation
The requirements of IFRS 7 Financial Instruments: Disclosures as equivalent disclosures are included in
the consolidated financial statements of the Group in which the Company is consolidated
Capital management disclosures
The requirements of paragraphs 91 to 99 of IFRS 13 as the equivalent disclosures are included in the
consolidated financial statements of the Group in which the Company is consolidated
Changes in accounting policies
In the preparation of these financial statements, the Company followed the same accounting policies and methods
of computation as compared to those applied in the previous period, except for the adoption of new standards
and interpretations and revision of the existing standards noted below.
New and amended standards adopted by the Group in 2023 or not yet adapted
There were no amendments to existing standards and interpretations that were effective in the year ended 31
December applicable nor had material impact on the Group.
The Directors do not expect the adoption of new accounting standards and interpretations to have a material
impact on the Consolidated financial statements.
Material accounting policies
The material accounting policies adopted in the preparation of the financial statements are set out below.
Investments
Investments are stated at cost less any provision for impairment. Profits or losses arising from disposals of fixed
asset investments are treated as part of the result from ordinary activities.
At each balance sheet date, the Company reviews the carrying amount of its investments to determine whether
there is any indication that these assets have suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated to determine the extent of the impairment loss (if any). Recoverable
amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset is
estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable
amount. An impairment loss is recognised immediately in profit or loss.
Intercompany loans
108
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Amounts owed by subsidiary undertakings represent intercompany loans to subsidiaries. These are non-
derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are
included in current assets, except for maturities greater than 12 months after the end of the reporting period, which
are classified as non-current assets.
Loans to subsidiaries are subsequently measured at amortised cost, reduced by appropriate allowances for
estimated irrecoverable amounts, using the effective interest method if the time value of money is significant.
Gains and losses are recognised in income when the loans are derecognised or impaired, as well as through the
amortisation process.
Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash at bank, in hand and in short-term
deposits that can be recalled in three months or less from the date of acquisition.
Borrowings
Borrowings are initially measured at fair value, net of transaction costs. Subsequent measurement is at amortised
cost using the effective interest method, with interest expense recognised on an effective yield basis.
The effective interest rate method is a method of calculating the amortised cost of a financial liability and of
allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts
estimated future cash payments through the expected life of the financial liability or, where appropriate, a shorter
period.
Trade and other payables
Trade and other payables are initially recognised at fair value and subsequently at amortised cost using the
effective interest method.
Income taxes
The Company is part of a tax group and surrenders losses for group relief.
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to
the relevant tax authorities and computed using tax laws and rates enacted or substantively enacted by the
balance sheet date.
Deferred tax is recognised on all temporary differences arising between the tax bases of assets and liabilities and
their carrying amounts in the financial statements with the following exceptions:
Where the temporary difference arises from the initial recognition of goodwill or the initial recognition of
an asset or liability in a transaction which is not a business combination and, at the time of the transaction,
affects neither the accounting profit nor taxable profit or loss
In respect of taxable temporary differences associated with investments in subsidiaries, associates and
interests in joint ventures, where the timing of the reversal of the temporary difference can be controlled
and it is probable that the temporary differences will not reverse in the foreseeable future
However, the initial recognition exemption does not apply to transactions in which both deductible and taxable
temporary differences arise on initial recognition that result in the recognition of equal deferred tax assets and
liabilities.
Deferred income tax assets are recognised only to the extent that it is probable that there will be sufficient taxable
profits against which the deductible temporary differences, carried forward tax credits or tax losses can be utilised.
No deferred tax asset has been recognised in respect of tax losses in the Company’s financial statements due to
uncertainty in respect of timing and amount of future taxable profits against which tax losses could be utilised.
Deferred income tax assets and liabilities are measured on an undiscounted basis at the tax rate that is expected
to apply when the related asset is realised or liability is settled, based on tax rates enacted or substantially enacted
by the balance sheet date.
109
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The carrying amount of deferred income tax assets is reviewed at each balance sheet date. Deferred income tax
assets and liabilities are offset only if a legally enforceable right exists to set off current tax assets against current
tax liabilities, the deferred income taxes relate to the same tax authority and that authority permits the Company
to make a single net payment.
Income tax is charged or credited to other comprehensive income if it relates to items that are charged or credited
to other comprehensive income. Similarly, income tax is charged or credited directly to equity if it relates to items
that are credited or charged directly to equity. Otherwise, income tax is recognised in the income statement.
Equity-settled transactions
The cost of equity-settled transactions is recognised together with a corresponding increase in share-based
payment reserve in equity, over the period in which the performance and/or service conditions are fulfilled. The
cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects
the extent to which the vesting period has expired and the Company’s best estimate of the number of equity
instruments that will ultimately vest. The expense or credit for the period represents the movement in cumulative
expense recognised at the beginning and end of the period.
Where the terms of an equity-settled transaction award are modified, the minimum expense recognised is the
expense as if the terms had not been modified if the original terms of the award are met. An additional expense
is recognised for any modification that increases the total fair value of the share-based payment transaction, or is
otherwise beneficial to the employee as measured at the date of modification.
Where an equity-settled award is cancelled, it is treated as if it vested on the date of cancellation, and any expense
not yet recognised for the award is recognised immediately. This includes any award where non-vesting conditions
within the control of either the entity or the employee are not met. However, if a new award is substituted for the
cancelled award, and designated as a replacement award on the date that it is granted, the cost based on the
original award terms continues to be recognised over the original vesting period and an expense is recognised
over the remainder of the new vesting period for the incremental fair value of any modification.
The financial effect of awards by the Company of options over its equity shares to employees of subsidiary
undertakings is recognised as an increase in the cost of investment in its subsidiaries, with a credit to equity
equivalent to the IFRS 2 cost in subsidiary undertakings.
Cash dividends to equity holders
The Company recognises a liability to make cash distributions to equity holders when the distribution is authorised
and the distribution is no longer at the discretion of the Company. As per the corporate laws in the United Kingdom,
an interim distribution is authorised by the Board of Directors, whilst a final distribution is authorised when it is
approved by the shareholders. A corresponding amount is recognised directly in equity.
Foreign currencies
Foreign currency transactions are recorded at the rates of exchange prevailing at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies are retranslated at the rates prevailing at the
end of the reporting period.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the
exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign
currency are translated using the exchange rates at the date when the fair value was determined. All resulting
differences are taken to the income statement.
110
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
3. Critical accounting judgements and key sources of estimation uncertainty
In the application of the Company’s accounting policies, which are described in Note 2, the Directors are required
to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not
readily apparent from other sources. Uncertainty about these assumptions and estimates could result in outcomes
that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting
period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities
within the next financial year, are discussed below.
The estimates and associated assumptions are based on historical experience and other factors that are
considered relevant. Actual results may differ from these estimates. The estimates and underlying assumptions
are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the
revision affects both current and future periods.
Impairment of investments
Where there are indicators of impairment, management performs an impairment review.
Recoverable amount for each investment is the higher of value in use and fair value less cost of disposal. Value
in use is calculated using a discounted cash flow model from cash flow projections based on internal forecasts.
In measuring value-in-use, management has:
Based cash flow projections on reasonable and supportable assumptions that represent management’s
best estimate of the range of economic conditions that will exist over the remaining useful life of the
investments;
Based cash flow projections on internal forecasts over the next five years; and
Estimated cash flow projections beyond the period of five years by extrapolating the projections based on
the forecasts using an estimate of long-term growth rates for subsequent years.
In estimating cash flow projections for each investment, management has used the “single most likely cash flow”
approach to estimate the cash flows associated with a range of economic conditions that may exist over the next
four years. The “single most likely cash flow” approach differs from the “expected cash flow” approach in that it
does not use all expectations about possible cash flows.
In estimating the single most likely cash flow for each investment, management has used the cash flow forecasts
based on internal forecasts as the base case scenario. Other reasonably plausible scenarios have been
considered but have not been adjusted for. Instead, the impact of these scenarios has been evaluated through
the sensitivity analysis.
The discount rate for each investment is estimated from the weighted average cost of capital using the Capital
Asset Pricing Model, after considering the risk-free rate, equity market risk, beta, country risk, small stock
premium, pre-tax cost of debt, tax rates, and the debt to capital ratio applicable to each investment.
The terminal value for each investment is estimated by applying the Gordon Growth formula to the forecast cash
flows using the respective discount rate and long-term growth rate.
Fair value is determined with the assistance of independent, professional valuers, where appropriate.
Costs of disposal are estimated based on a combination of historical data and management’s expectation of the
costs associate with disposing of the investment.
The recoverable amount is most sensitive to the discount rate used for the discounted cash flow model as well as
the expected future cash inflows and the growth rate used for extrapolation purposes.
111
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
4. Investments
At 1 January 2022
Additions – parent contribution in respect of share-based payments
Reductions – lapsed share options
Provisions for impairment
At 31 December 2022
Additions – parent contribution in respect of share-based payments
Additions – purchase of subsidiaries
Reductions – lapsed share options
Provisions for impairment
Reversal of provision for impairment
Disposal of subsidiary
At 31 December 2023
Total
£’000
51,551
129
(135)
(133)
51,412
104
8
(156)
(10)
1,679
(49,963)
3,074
On 03 November 2023, the Company disposed of its investment in Gama Group Inc, a wholly owned subsidiary.
Refer to Note 7 to the Consolidated Financial Statements for further details.
A reversal of a non-cash provision for impairment of £1,679,000 (2022: non-cash provision for impairment of
£57,000) has been recognised on the investment in subsidiary Gama Group MENA FZE following an impairment
review. The recoverable amount of the investment in Gama Group MENA FZE was determined based on its value
in use using discounted cash flows projections over the next five years.
During the year, the Company acquired Gama Aviation Management Inc and GB Aviation Holdings LLC from
Gama Group Inc, its former wholly owned subsidiary. Non-cash provisions for impairment of £4,000 have been
recognised on each of these investments following an impairment review. The impairment review identified that
the recoverable amounts of Gama Aviation Management Inc and GB Aviation Holdings LLC were less than the
investment values. The recoverable amount of the investments in Gama Aviation Management Inc and GB
Aviation Holdings LLC were determined based on their net asset values.
A non-cash provision for impairment of £352 (2022: £36,000) has been recognised on the investment in subsidiary
Gama Group Asia Limited following an impairment review. The impairment review identified that the recoverable
amount of Gama Group Asia Limited was less than the investment value. The recoverable amount of the
investment in Gama Group Asia Limited was determined based on its net asset value.
A non-cash provision for impairment of £1,000 (2022: £nil) has been recognised on the investment in subsidiary
Flyertech Europe Sp. Z.o.o. following an impairment review. The impairment review identified that the recoverable
amount of Flyertech Europe Sp. Z.o.o. was less than the investment value. The recoverable amount of the
investment in Flyertech Europe Sp. Z.o.o. was determined based on its net asset value.
A non-cash provision for impairment of £nil has been made (2022: £40,000), relating to lapsed share options.
5. Subsidiaries and other related undertakings
Refer to Note 2 to the Consolidated Financial Statements for details of the Company’s subsidiaries and other
related undertakings held directly or indirectly at 31 December 2023.
112
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
6. Trade and other receivables
Amounts falling due within one year
Amounts owed by subsidiary undertakings
Loss allowance
Other taxation and social security
Prepayments
Accrued income
Other debtors1
2023
£’000
2022
£’000
32,821
26,492
(22,160)
(17,400)
10,661
9,092
336
4
88
1,376
12,465
77
13
-
-
9,182
1
Includes deferred consideration of $1.7m in relation to the US disposal, see note 7 of Consolidated Group Accounts.
Amounts owed by subsidiary undertakings represent loans to subsidiary undertakings. The loans are unsecured,
bear interest at varying rates (from 0% per annum to SONIA + 3% per annum) and are repayable on demand.
Movement in the loss allowance
At 1 January
Impairment losses recognised in income statement
At 31 December
7. Cash and cash equivalents
Cash and bank balances
8. Trade and other payables
Amounts due to subsidiary undertakings
Trade creditors
Accruals and deferred income
Other creditors
2023
£’000
17,400
4,760
22,160
2023
£’000
70,398
2023
£’000
1,058
66
1,344
8
2,476
2022
£’000
16,748
652
17,400
2022
£’000
3,252
2022
£’000
14,531
132
836
-
15,499
Amounts due to subsidiary undertakings represent loans from subsidiary undertakings. The loans are unsecured,
bear interest at varying rates (from 0% per annum to SONIA - 1% per annum) and are repayable on demand.
113
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
9. Borrowings
Secured borrowings at amortised cost
Amount due for settlement within 12 months: Bank borrowings
2023
£’000
-
-
2022
£’000
19,995
19,995
The principal features of the Company’s bank borrowings are as follows:
The Company had a facilities agreement for a £20m term loan secured with HSBC
The term loan was repaid on 25 January 2023
The term loan was subject to customary banking security arrangements
Costs of arranging the facilities are deducted from the original measurement of the bank borrowings and
amortised into finance costs throughout the period using the effective interest rate. The balance of the
arrangement fees remaining as of 31 December 2023 is £nil (2022: £5,000)
Interest
Maturity
Drawn
(Local
currency)
’000
Drawn
(Presentation
currency)
£’000
Facility
’000
BOEBR + 4.15%
31 January 2023
GBP 20,000 GBP 20,000
2022
Term loan
Bank borrowing before arrangement fees
Capitalised loan arrangement fees
Bank borrowings
10. Issued share capital and reserves
Issued and fully paid ordinary shares
At the beginning of the period
Issued
At the end of the period
Nominal
value
2023
Number
2023
£’000
2022
Number
1p
1p
1p
63,961,279
640
63,686,279
-
-
275,000
63,961,279
640
63,961,279
The Company has one class of ordinary shares with a nominal value of £0.01 and no right to fixed income.
Share premium
At 1 January 2022
Shares issued
At 31 December 2022
Shares issued
At 31 December 2023
£’000
46,298
160
46,458
-
46,458
Share premium represents the amount subscribed for share capital in excess of its nominal value, net of historical
placement fees of £1,526,000 (2022: £1,526,000).
114
20,000
20,000
(5)
19,995
2022
£’000
637
3
640
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Share-based payment reserve
At 1 January 2022
Share-based payment expense
Lapsed and exercised options
At 31 December 2022
Share-based payment expense
Lapsed and exercised options
At 31 December 2023
£’000
1,454
129
(135)
1,448
104
(156)
1,396
The share-based payment reserve represents the credit to equity to recognise the value of equity-settled share-
based payments. Refer to Note 13 for further details of these plans. Following the lapse and exercise of options
during the year under the ASOP, CSOP and LTIP plans, £156,000 (2022: £135,000) was transferred from the
share-based payment reserves to the investments.
11. Distributions made and proposed
The Company did not pay an ordinary dividend during the year (2022: £nil) to shareholders.
The Board does not recommend a dividend for 2023 (2022: £nil).
Details of the tender offer to shareholders completed in June 2024 are contained in note 40 to the consolidated
financial statements.
12. Related party transactions
The Company has taken advantage of the exemption not to disclose transactions with 100% owned members of
the Group headed by Gama Aviation Plc on the grounds that 100% of the voting rights of these companies are
controlled within the Group, and the companies are included in Note 2 to the consolidated financial statements.
The Company had no other related party transactions.
13. Share-based compensation
Equity-settled share option schemes
Share options are awarded to employees under three plans:
Gama Aviation Plc Company Share Option Plan 2018 (CSOP)
Gama Aviation Plc Additional Share Option Plan 2018 (ASOP)
Gama Aviation Plc Long-Term Incentive Plan 2021 (LTIP)
The plans are designed to provide long-term incentives for employees to deliver long-term shareholder returns.
Participation in the plan is at the Board’s discretion, and no individual has a contractual right to participate in the
plan or to receive any guaranteed benefits.
Performance conditions may be specified under any of the schemes. No options granted to date under the CSOP
and ASOP have performance conditions. Under the LTIP, the number of options which vest are subject to a
performance condition based on the Company's average share price over the 30 days following release of the
Company's results for the year ending 31 December 2023. However, these conditions may be varied or waived.
Options are granted under the plans for no consideration and carry no dividend or voting rights.
The normal vesting period for all schemes is three years; however, options over 155,000 shares were granted to
Directors on 29 March 2021 and these vested immediately (the “Director ASOP Awards”).
115
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Under the CSOP and ASOP, the exercise price of options is calculated based on the weighted average price at
which the Company’s shares are traded on the Alternative Investment Market of the London Stock Exchange
during the week up to and including the date of the grant. Under the LTIP, the exercise price is 1.0 pence.
When exercised, each option is convertible into one ordinary share at the exercise price.
If options remain unexercised after a period of ten years from the grant date, the options expire. If an employee
leaves employment of the Group due to injury, ill health, disability, retirement, redundancy or where the
employee’s employer ceases to be part of the Group, a proportion (being the proportion of the original shares
granted that relate to the period after leaving and prior to vesting) of options are forfeited 90 days after leaving,
with the remaining options being forfeited six months after leaving. Options are forfeited 90 days after leaving if
the employee leaves the Group before the options vest for any other reason.
Set out below are summaries of options granted under the plans:
2023
2022
Average exercise
price per share
option
(pence)
37.4
–
–
–
49.1
35.9
71.4
Number of
options
‘000
3,081
–
–
–
(136)
2,945
239
Average exercise
price per share
option
(pence)
34.6
–
–
–
25.4
37.4
97.6
Number of
options
‘000
4,017
–
–
–
(936)
3,081
194
At 1 January
Granted during the year
Exercised during the year1
Surrendered during the year
Forfeited during the year
At 31 December
Vested and exercisable at 31 December
1 The weighted average share price at the date of exercise of options exercised during the year was nil pence (2022: nil pence).
On 29 March 2021, options over a total of 2,276,000 shares previously granted to Directors and other employees
were agreed to be surrendered by those employees (the “Surrendered Awards”). In their place, the Company
agreed to grant options over a total of 1,138,000 shares, at 68.8 pence, to Directors and other employees (the
“Replacement Awards”).
No options expired during 2023 (2022: none).
Share options outstanding at the end of the year have the following expiry dates and exercise prices:
Exercise price
Share options 31
December 2023
Share options 31
December 2022
Grant date
22 June 2018
22 June 2018
17 June 2019
26 March 2021
29 March 2021
29 March 2021
29 March 2021
TOTAL
Weighted average remaining contractual life of
options outstanding at end of period
Expiry date
(pence)
21 June 2028
21 June 2028
16 June 2029
25 March 2031
28 March 2031
28 March 2031
28 March 2031
205.5
205.5
91.5
39.0
68.8
1.0
1.0
‘000
23
38
48
636
911
1,159
130
2,945
'000
23
43
58
705
983
1,199
70
3,081
7.16 years
8.15 years
116
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The estimated fair values of the awards under the CSOP and ASOP have been established using a Black Scholes
model. This model uses various inputs, including expected dividends, expected share price volatility and the
expected period to exercise.
The estimated fair values of the awards under the LTIP have been established using a Monte Carlo model. This
model uses various inputs, including expected dividends, expected share price volatility and the expected period
to exercise, and the likelihood of the market-based performance condition being met at the grant date.
The Replacement Awards have been accounted for under modification accounting, whereby the original fair value
expense for the Surrendered Awards has continued to be recognised over the original vesting period and an
additional incremental expense has been recognised over the vesting period of the Replacement Awards.
No options were granted during the year ended 31 December 2023 (2022: none).
Expenses arising from equity-settled share-based payment transactions
The compensation expense recognised in relation to the awards is based on the fair value of the awards at the
grant date.
The amount recognised in the Statement of Changes in Equity for employee services in relation to the awards is
£104,000 (2022: £129,000).
The amount recognised as an expense during the year for employee services in relation to the awards is £nil
(2022: £nil).
14. Commitments for capital expenditure
The company had no capital commitments at the current or previous balance sheet date.
15. Contingent liabilities
Refer to note 39 to the Consolidated Financial Statements for details of a contingent liabilities .
16. Events after the balance sheet date
Refer to note 40 to the Consolidated Financial Statements for details on non-adjusting events that occurred after
the reporting date that are relevant to the Company.
117
Gama Aviation Plc
1st Floor
25 Templer Avenue
Farnborough
Hampshire
GU14 6FE
UK
gamaaviation.com
118