Gama bags special mission contracts worth combined £115.5m
The news will come as welcome relief to investors.
Under-pressure Gama Aviation has secured two contracts for special mission aircraft worth up to £115.5 million.
The aviation services group said that the first was an 11-year deal to provide maintenance and spare parts for eight Government special mission aircraft.
This contract is expected to deliver revenues of between £66 million and £88 million.
A second similar agreement will garner sales of about £27.5 million over five years.
Boss Marwan Khalek said: “We are delighted with these contract awards which endorse the company’s strength in the UK special mission market segment.
“This is as a direct result of our strategy to continue to build our depth of capability and breadth of service offerings to derive steady and profitable revenue growth for our European division.
“These medium and long-term support contracts, which we have a strong track record in winning, significantly improve the forward visibility of our revenues and enhance our earnings in the mid to long term.”
The news will come as welcome relief to investors as it follows an October profit warning from Gama.
At the time, the group said that full-year underlying operating profit would come in below its previous estimate of three million US dollars (£2.3 million).
Gama pointed to slower-than-expected growth in the US, adding that its forecasts for ground operations in Europe had proved “too ambitious” following a transition of operations from Farnborough and Oxford airports.
In Asia, the group’s associate China Air Services continued to underperform, Gama said, with the unexpected loss of contracts significantly impacting margins.
Shares were up nearly 2% in morning trade at 118p.