Airwork first half profit up as Rifa takeover offer passes 75% threshold

Airwork is predicting annual profit of $25 million.

Airwork Holdings lifted profit 9.5% in the first half as it awaits the outcome of a partial takeover offer from Chinese group Zhejiang Rifa Holding Group.

Net profit rose to $12.7 million in the six months ended December, from $11.6 million a year earlier, on a 1 .3% lift in revenue to $84.5 million.

Earnings before tax rose 10.5% to $20.4 million with the company expanding its fixed-wing division significantly in the first half.

Airwork is predicting annual profit of $25 million, from $24.6 million in the 2016 financial year.

The company didn't declare a dividend as it's still waiting for the Rifa offer to be concluded.

The $5.40 per share offer for 75% of the company, which came after Rifa entered into a takeover lock-up deed with major shareholders last October, closes on March 5. Rifa had received 87.3% shareholder acceptances at February 24, meaning scaling will occur.

"The takeover process has been protracted and inevitably this has been a distraction for the management team at times,” the company says.  

“Airwork believes the involvement of RIFA can open up exciting new opportunities for the company to leverage its expertise into the Chinese market and the wider Asia region," it says.

"The company expects continued earnings growth from its fixed wing business due to the full year impact of the aircraft deliveries and new contracts.

“Headwinds in the helicopter industry continue, in particular in the resources sector. Airwork's helicopter business will continue to focus on diversifying its customer base and expanding its global footprint," the company says.

Any deal requires the go-ahead from the Overseas Investment Office, the administrative committee of the Shanghai Pilot Free Trade Zone and what Airwork has termed the approval of "various aviation regulators.”

Airwork shares recently traded at $5, and have gained 21% in the past 12 months and 13% since the Rifa offer was made.