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7/27/2019 Company Report Final V1.3
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Air Choice One - Annual Report 2
Message
From
CEO
Key
Figures
03
04 07
08
09 10
Financial
Report
Operations
Review
2012
Highlights
Marketing
& HR
Review
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Air Choice One - Annual Report 3
Key Figures
FY 2012
................................
2012 has been a year of transformation for AirChoice One - from revamping our aging fleet ofaircraft to diversifying into the cargo and carrental market.
We have led a determined growth strategy in2012, aiming to consolidate our existing routes,whilst expanding into new routes and beyond,serving a multitude of businesses,manufacturing companies and public bodies inthe process. We have also seized upon a
number of opportunities presented to us,expanding into the car rental and cargoindustry which both produced profits in thefinal quarter of 2012. We see these ventures ascomplementary to our core offering, and we areconfident they will continue to develop as asource of value for our shareholders, andultimately our customers.
Our aggressive expansion plans have seenrevenues increase by 163% to $13 million. In
quarter three we began to see a strong returnon our investments, delivering an incrediblyhealthy net profit of over $200,000.
However, the unexpected winter weathertowards the end of the year which affected theairline industry as a whole, along with ourdecision to replace our aging fleet of aircraft, ledus to report an underlying yearly net loss of$166,926. Our long term strategy has requiredAir Choice One to re-invest its profits into the
business, meaning dividends havent beenfeasible in 2012. Whilst so, the increase in ourshare price reflects the understanding that AirChoice One is well positioned for the future.
Our positive cash flow and strong asset base,along with our network of loyal and valuedcustomers, also stands us in good stead to
deliver excellent profits and shareholder valuein the coming years.
Without our dedicated and reliable employees,the growth plan devised at the start of the yearwouldnt have been possible. In the face of
continued internal growth, our growingworkforce has not faltered on quality, helpingour business achieve a record 98.4% reliabilityrating. They have consistently exceeded thehigh expectations customers come to expect
from Air Choice One, and for this reason, ourpeople are our greatest asset.
Leading onto my personal highlight of the year;we were awarded the prestigious Commuter
Airline of the Region award 2012. Recognitionof this kind is something we can all take pride in for it demonstrates our unparalleledcommitment to our customers. It is a testamentas to how much Air Choice One has grown in ayear, and I look forward to the future.
Net Revenue: $13M 163%
Net Profit: -$166,000 -288%
Stock Price: $24.72 24%
Shaun Sims
CEO
2012,
a year oftransformation
Message from the CEO
Shaun Sims
CEO
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Air Choice One - Annual Report 4
Financial Statements
Income Report:
2012 2011 % Change
Net Revenue $13,018,902 $4,943,368 163%
Expenditure $13,178,905 $4,795,144 175%
Profit/loss before tax -$166,926 $148,224 -213%
Tax paid $0 $59,288 -100%
Net profit/loss -$166,926 $88,936 -288%
Dividends paid $0 $8,000 -100%
Profits retained -$166,926 $80,936 -306%
Asset Report:
2012 2011 % Change
Total value of assets $7,286,000 $2,482,089 194%
Total value of liabilities $6,669,604 $794,070 740%
Amount of common
stock
198,571 150,000 32%
Value of common stock $2,600,000 $1,500,000 73%
Retained earnings $21,093 $188,019 -89%
Total equity $2,621,093 $1,688,019 55%
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Air Choice One - Annual Report 5
Financial Review
OverallReview
Air Choice One in the 2012 financial year has delivered a positive
financial performance, despite continuing macroeconomic
challenges, growing competition and a consistent increase the
price of oil. Our strategy for growth began to have positive financial
impact in quarter three, with net profits of over $200,000. However, our
long term decision to replace our inefficient, aging fleet of aircraft, along
with disruptive winter weather, led us to report a net loss of $166,926
for the year. We have however established a solid foundation for
profitability in the future as well as for further expansion. Moreover,
having diversified into the car rental and cargo market which produced
promising profits of $15,544 in the final quarter of 2012, we expect
these undertaking to become a source of important revenue and profit.
TurnoverandProfit
In 2012 revenues grew considerably in line with our expansion strategy which included
diversification into the cargo and car rental market. Despite a profitable quarter two and
three, our decision to replace our Beechcraft aircraft along with higher operating costs
led us to report a total net loss of $166,926 for 2012.
Dividends
Our expansion in 2012 has been fuelled by a combination of stock sales, loans and
retained profit. Consequently, the payment of dividends hasnt been feasible in 2012.
With an expected return to profitability in 2013, we plan to reward shareholders for
their investment in the coming year.
2011 2012
Q4 Q1 Q2 Q3 Q4
Net
Profit
$22,234 -$234,185 $26,295 $207,747 -$166,783
Michele Granata
Finance Director
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Air Choice One - Annual Report 6
$7,286,000
$2,004,697
Fixed Assets
Current Assets
Assets
The total value of assets
increased consistently during
this year passing from 2,5 to 7,3
million dollars, for a total
increase of 4,8 million. This rise
was driven both by current
assets as well as fixed assets.
The change in current assets is
due to the account receivables,
which has grown following the
positive trend of the revenue.
However, the main driver of the
asset increase is the fixed assets value which is essentially composed by the plane we
own. At the moment, we directly own one Embraer Brasilia and two British Aereo 31,
which have a higher quality and value respect from the three Beechcraft we had at the
beginning of the year.
Debt and Liabilities
Given our growth strategy, the value of our liabilities has increased over the course of
2012. A 5.4 million dollar long term loan was utilised to fund our growth and fleet
renewal. Our close and effective financial management of Air Choice One is reflected in
our current ratio being higher than the industry average of 1.69, meaning we are well
versed to meet our current liabilities.
Retained Earnings and Equity
The retained earnings are slightly lower than the previous year. This is a consequence of
the entrance into new markets and routes, as well as in the cargo market and in the auto
rental business that has taken a couple of quarters before becoming profitable. The total
number of stocks has also risen since we issued 1.1 million dollars of shares in three
tranches in quarters one, two and four. At the end of 2012, we had 198,571 shares
outstanding for a total value of, at the time of issue, 2.6 million dollars. The share price is
24.72 dollars, respect from 20 at the end of 2011, and we are confident that the
following year will show another consistent improvement.
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Air Choice One - Annual Report 7
Operational Review
2012 has been a year of aggressive market expansion, meaning anoverhaul of previous operations to bring the company in line with
its new strategic direction. The changes initiated were to support
long term financial success. From an operational perspective, our
new strategy has seen positive results in the 2012 financial year :
Aircraft reliability has increased from 92% to 98.4% Our network of routes has tripled in size Our fleet has grown by 133%
Routes
Achieving a balance of simultaneous growth and retention of
our existing routes has been a priority of the department in
2012. We have secured services in our longstanding routes,
however through a process of continual assessment of our
existing and potential routes pulled back on those less
lucrative. We have taken advantage of the lack of major
airlines servicing commuter routes by establishing a presence in the new fast growing
market for foreign business these routes open new challenges for the company along
with the opportunity to develop and expand our core competencies. We will continue to
strategically assess opportunities for expansion in 2013 with a view to servicing over 23
routes by the end of 2013.
Fleet
Expansion has both given theopportunity and required an extensivere-examination of our aircrafts. In orderto meet our targets for reliability andperceived quality this year has brought atotal overhaul and investment intobetter quality aircrafts. We have introduced the British Aero 31 to replace our older andless competitive Beechcraft fleet as well as investing into larger and more efficient longhaul carriers.
Aircraft QuantityOwned
QuantityLeased
British Aero 31 2 3
Bmbraer Brasilia 1 1
Brenda Palmgren
Operations Director
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Air Choice One - Annual Report 8
Key FiguresYear 2012
Turnovermillion pounds15
Flights per quarter
Reliability Team Members
Passengers Aircrafts in operations
1192 7
99%
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Air Choice One - Annual Report 9
2012 has seen Air Choice One invest significant amounts in
advertising and promotional schemes aimed at retaining our
existing customers in an ever growing competitive environment,
whilst also supporting our expansion into new routes, the cargo
industry and the car rental market.A number of exciting
advertising initiatives were launched,
employing a wide range of media - from
billboards to newspapers. Our We
Want You advertising initiative
deployed in regional newspapers has
been particularly successful in
developing a profitable customerbase.
2013 will see sustained investment in
our marketing activities as we look to solidify our existing
customer base, whilst ensuring expansion into new areas is
properly supported.
2012 was a year of continuous investment in the standards of
training we offer. Our employees are recognised as our best and
fundamental resource and head office works very closely with
representatives from different areas and regions We work
proactively in many ways to ensure that our people practices are
congruent with Air Choice One mission, vision, and culture.We acknowledge our responsibilities and dedicate as much time,energy and financial resources as possible to ensure that our
company is a healthy workplace. We remain absolutely committed
being an exciting and attractive place to work for our 192
employees. In such a competitive environment as the airline
industry, our company rely more than ever on its men and women,
they are our strength toward success. Thus, I would really like to thank all members of
the Air Choice One team for the great job we did together last year and I hope it will
continue on the same virtuous path.
Raphalle Le
Tanneur
Jessica ZhangMarketing Director
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Air Choice One - Annual Report 10
January
Cargo
In reaction to the current externalenvironment we have taken advantage
of the diversification prospects within
the cargo industry. Whilst this has taken
longer than expected to deliver the
forecast profits, we believe that it will
grow to be an important secondary
revenue stream. We will continue to
monitor the profitability of this venture,
as with all our ventures making harddecisions where necessary.
MarchCorporate Social Responsibility
2012 has seen continued investment
in our Educate the Nation campaign,
aimed at providing internships and
educational courses for the youth in the
communities we operate. At Air Choice
One our long term growth strategy
recognises the need for investment insuch facilities, and we remain committed
to this cause.
May
Commuter Airline of the Region
In May 2012, Air Choice One won thecoveted and prestigious Commuter
Airline of The Region Award recognition of our excellence, customerservice and expansion into commutertowns and cities across regional America.All of our staff can be proud of thisachievement, and we are confident thisaward is the first of of many more tocome.
2012
Highlights
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Air Choice One - Annual Report 11
Closing remark from the CEO
Our shareholders can look forward to the future with optimism and confidence asthe strategic investments undertaken by Air Choice One return to deliver positivefinancial profits once again.
We will continue to place the customer at the heart of Air Choice One, as webelieve such a strategy will ensure continued, sustainable growth andprofitability.
In the year ahead, we will be further improving our flights and services withadditional exciting initiatives, while continuing to invest in our people, who areour greatest asset.
There will be only one choice in 2013 Air Choice One.
Shaun Sims
CEO
July
Car Rental Business
In addition to our core strategy of
commuter flights, we made a $200,000
investment, spread over eight quarters,
into the lucrative car rental market.
This opportunity has offered our
customers a more integrated travelling
solution delivering value to customers
and shareholders alike.
We continue to grow our fleet of carsand rental locations, and our strategy in
2013 will focus on solidifying and
growing this venture.
September
Customer Review
James:
Check-in was flawless as was boarding.The flight attendants were attentive,
friendly and very knowledgeable. The
Captain's announcements were also
informative, confirming the time of
arrival on the plane. The on-board
drinks service was speedy and efficient.
Overall, it was an excellent experience.
I would totally recommend Air Choice
One on this route and in fact I havealready booked my next flight with this
company.
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Air Choice One - Annual Report 12
An electronic copy of this report is available at:
www.airchoiceone.com/annualreport2012
Printed on 100% recycled paper
Air Choice One
38507 Long Street
Newark, California 94260
USA
T (800) 866-2436F (501) 608-5889www airchoiceone com
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http://www.airchoiceone.com/annualreport2012http://www.airchoiceone.com/annualreport2012