Gama falls on third quarter profit warning

Shares in Gama Aviation collapsed on Monday after the firm warned over profits following a lacklustre third quarter.

The aviation services group said that full-year underlying operating profit will come in below its previous estimate of 3 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 tumbled more than 30% to 105p in morning trade.

Chief executive Marwan Khalek said: “The reduction in our expectations for this year is disappointing with the growth that we had anticipated not coming through as strongly as expected.

“Nonetheless, we are still expecting healthy growth for the year whilst continuing to make good progress in building capability and capacity and securing encouraging new business in all of our key markets. The fundamentals of our business remain strong.”