Airwork sees annual profit growth of 48%, expects first half to beat prospectus

Airwork Holdings [NZX: AWK], the aviation service firm which listed on the stock exchange last December, expects to lift annual profit 48 percent in the current year, with first-half earnings tipped to beat its offer document forecast as its helicopter engineering unit is poised for more growth.

Net profit is expected to increase to $14.5 million in the 12 months ending June 30, 2015, from $9.8 million in 2014, chairman Mike Daniel told shareholders in Auckland. The company is also on target to post first-half profit of $7.3 million, beating its prospectus forecast for $5.9 million. The directors expect to keep the total dividend payment for 2015 at 15 cents per share.

"Work will continue with helicopter and equipment manufacturers to add value to their products and offerings, and we expect to further expand the company's helicopter fleet, particularly in emerging markets," Daniel said. "The momentum we have generated in the last financial year has carried through into this year."

Auckland-based Airwork beat prospectus forecast for the 2014 year, largely on the strength of its helicopter unit, which received certification from regulatory authorities in North America and Europe.

Daniel said the company plans an "imminent expansion" of its helicopter engineering facility in Ardmore, which will boost capacity and allow for further growth.

The fixed wing unit is expected to report a reduction in unscheduled and charter flying hours, though that will be offset by an expansion of the dry lease fleet and customer base, Daniel said.

Chief executive Chris Hart said the company has agreed to buy six 737-400 passenger aircraft to take advantage of increasing opportunities for global freight aircraft.

He said the price paid was confidential, but not material, and would let Airwork convert the aircraft into freighters for dry lease customers.

"Our fall-back position, as per our standard operating plan, is to use the engines and parts on the existing fleet at a most attractive cost option," Hart said. "We are actively engaged with a number of potential lessees."

If the company is successful in the fixed wing initiatives, Hart said the benefits will largely be reaped in the 2016 financial year.

Airwork shares rose 1.1 percent to $2.90, and have gained 4 percent this year.

(BusinessDesk)