(Alliance News) - London-based Signature Aviation PLC on Tuesday said it is withholding its interim dividend following poor flight activity in the first half, but it looks forward to driving medium-term progress through leveraging its real-estate network.
The aviation services company swung to a pretax loss in the first half ended June 30 of USD51.7 million from a profit of USD36.3 million a year prior.
Revenue was down 38% to USD702.7 million from USD1.14 billion a year before. This was mainly do to a reduction in flight activity.
Signature Aviation performed in line with its expectations in the first quarter but then saw significant declines in flight activity in the second, negatively impacting the company.
Signature Aviation however implemented "swift" cost cuts, realigning labour levels to better suit flight activity, which the company said mitigated some of the impact of the virus pandemic. The company added that its largest cost, fuel, naturally flexes with flight activity.
The company did not declare an interim dividend, stating the macroeconomic uncertainty caused by Covid-19 as the reason. Signature Aviation said it will keep future dividends under review and will restart payments when it is appropriate to do so.
Going forward, Chief Executive Mark Johnstone said that the company remains confident in the resilience of its business model, its network, and the strength of its liquidity.
Signature Aviation said it is encouraged by the level of flight operations currently, with August flight activity being down 19% year on year, versus a low point of 77% down in April.
Johnstone said: "We will continue to drive further medium-term progress through our Signature strategic growth initiatives with a focus on further enhancing and leveraging our unique real estate network to grow non-fuel revenues and operational efficiency."
Signature Aviation shares were down 3.1% at 261.20 pence each on Tuesday morning in London.
By Greg Roxburgh; gregroxburgh@alliancenews.com
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