Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environment
• Community
• Employee well-being
• Ethical business conduct

Environmental Achievements

• Awarded the internationally recognised Carbon Footprint Standard for demonstrating low carbon credentials
• Implemented waste recycling schemes throughout the Group’s operations to limit environmental impact
• Employees volunteered time to support local environmental projects

Social Achievements

• Investments made in employee training and education
• Established an intranet facility called Horizon for employee access to online training and other materials
• Employees volunteered at Bells Piece Day Service, Urban Root and Green Spaces at Basingstoke and Deane Borough Council
• Investments in schemes that support local communities
• Provided internship and apprenticeship opportunities

Governance Achievements

• Adopted the Quoted Companies Alliance (QCA) Corporate Governance Code
• Made key INED appointments, leading to changes in the compositions of the Audit Committee, Remuneration Committee and the Nomination Committee
• Appointed PriceWaterhouseCoopers as new auditors
• Appointed Daniel Ruback as the new Chief Financial Officer
• Strengthened resources within the finance team and developed accountability and Board assurance frameworks

Climate Goals & Targets

Environmental Challenges

• Challenging and highly competitive market environment
• Disappointing conversion of revenue growth into Adjusted EBIT
• Limited growth opportunities through acquisitions
• Sub-optimal cost base
• Absence of a Group CFO for eight months
• Churn in the senior finance team
• Relocation of HQ in the USA
• Slow identification and implementation of cost reductions
• Brexit-related concerns
• Reduced revenues from airline customers who ceased operations
• Reduced flight activity impacted by political challenges in the Middle East
• Start-up losses and poor gross margin performance at the Florida Paint Shop
• Loss allowance for doubtful debt with a fleet operator no longer trading
• Growth in operational management costs
• Revenue shortfalls associated with the separation and divestment of the US Air business
• Increased overheads in the Middle East and Asia
• COVID-19 pandemic impacting activity levels in certain parts of the Group and causing significant losses in Hong Kong associate

Mitigation Strategies

• Focus on core business and providing relevant services to customers
• Efforts to strengthen and improve the effectiveness of the finance function and control environment
• Appointment of Daniel Ruback as CFO, new Group Financial Controller and other senior finance staff
• Implementation of an enhanced governance and reporting framework to better manage customer collections
• System enhancements to increase automation and reduce manual intervention
• Strategic review to identify opportunities with greatest potential for value creation
• Sustained emphasis on controlling and leveraging costs and investments globally
• Cost containment and cash preservation measures
• Use of available government sponsored assistance measures
• Preserving cash by eliminating discretionary spend and focusing on close management of accounts receivable balances
• Securing a new $50m revolving credit facility and a £20m loan

Supply Chain Management

Responsible Procurement

• Focus on long-term relationships with key suppliers

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: QCA Corporate Governance Code

Certifications: ISO14001:2015

Third-party Assurance: PricewaterhouseCoopers LLP

Awards & Recognition

• Carbon Footprint Standard

Environmental Metrics

ESG Focus Areas

• Environmental (Carbon Footprint, SECR compliance)
• Social (Employee well-being)
• Governance (Corporate Governance Code, Board composition)

Environmental Achievements

• Second year of SECR reporting (Scope 1 & 2, and Scope 3 indirect emissions under ISO 14064-1:2018 methodology).
• Initiated Project Element Six to further reduce direct and indirect CO2 emissions.

Social Achievements

• Launched initiatives to support employee mental well-being (Town Halls, Lunch and Learn sessions, well-being channels, EAP).

Governance Achievements

• Adopted the Quoted Companies Alliance (QCA) Corporate Governance Code.
• Strengthened finance and control functions.
• Appointed a dedicated Corporate Compliance Officer.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic severely impacted aviation sector, resulting in reduced revenues and profitability.
• Significant losses in China Aircraft Services Limited (CASL) associate.
• Impairment of investments due to pandemic-related delays and uncertainties.

Mitigation Strategies

• Decisive cost reduction measures and preservation of cash.
• Utilization of COVID-19 related government support ($5.8m).
• Strategic review and restructuring of the business into three market-facing SBUs.
• Acquisition of Jet East to accelerate growth in the US market.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: SECR, ISO 14064-1:2018

Third-party Assurance: Carbon Footprint Ltd

Environmental Metrics

ESG Focus Areas

• Equality, diversity and sustainability
• Carbon Reduction

Environmental Achievements

• Second consecutive reduction since 2019 in the Group’s scope 1, 2 and 3 (excluding downstream) Greenhouse Gas emissions.

Social Achievements

• Introduced hybrid working and supporting our people with mental health training as well as a range of advice via our WeCare support programme.
• Increased diversity within our cadre of 2021 apprentices as well as using the apprenticeship levy to upskill employees in key areas of the business

Governance Achievements

• Implementation of a refreshed bi-annual risk register process, with the outputs presented to the Board.
• Establishment of a framework agreement with KPMG to provide internal audit services to the Group.

Climate Goals & Targets

Environmental Challenges

• Supply chain pressures and energy price inflation aggravated by the prolonged effects of the pandemic and the war in Ukraine.
• Inferior financial performance resulting from gross profit margin erosion and/or an increasing overhead cost base within the business.
• Cost and availability of sufficient financing to support the future growth of the business.
• Increasing concentration creating a reliance on a small number of key customers and possible lack of focus on emerging opportunities and/or renewal of major contracts.
• Slippage in securing contracts and generating revenue from internally developed SaaS software platform within Technology & Outsourcing.
• Potential impact resulting from pandemics such as COVID-19, environmental catastrophes stemming from climate change and from significant adverse changes to the political or economic landscape.
• Cyber threats and associated challenges to the Company’s information security environment.
• Reliance on, and challenges in retaining, key individuals who are important to the evolution and measured development of the organisation.
• Health and safety failures or an air accident which damage the Group’s reputation.
• Increasing regulatory burden and potential breach in a highly compliance-driven environment.
• Failure of business processes and/or business and financial reporting systems to provide timely, complete and accurate information to enable effective management of SBU and Group functions

Mitigation Strategies

• The 2021 restructuring of the organisation into Strategic Business Unit segments has enabled the Directors and senior management to more easily identify opportunities to grow gross margin within the major trading components of the Group.
• Delivery of gross margin improvement is a key element of the Group’s Fix & Optimise initiative.
• Directors are also closely monitoring the fixed cost base of the organisation, which is partially impacted by the increasing costs of aviation and corporate compliance related expenditure.
• Active discussions to renew both facilities, with refinancing expected ahead of these dates.
• Additional financing is likely to be required to support larger capital-intensive related opportunities whilst also considering any potential increases in the cost of debt financing resulting from evolving macroeconomic factors.
• Measures to explore business development opportunities with other customers and in complementary areas with the aim of leveraging the Group’s expertise across a wider customer base, diversifying its exposure wherever possible and wherever it makes sound financial sense to do so.
• Proactive investment in its SaaS sales function, seeking to take advantage of an anticipated rebound in deferred customer investment relating to new operating systems.
• Implementation of a number of measures over the past two years to support colleagues at this challenging time.
• Ongoing financial and commercial review of the short and long-term impact of the pandemic on different segments of the Group’s service offerings has been made more effective due to the 2021 re-organisation within the Group and the move to focus on Strategic Business Units.
• Monitoring and reviewing possible implications of climate change, a changing political and economic landscape, including the impact of the conflict in Ukraine, liaising with relevant internal and external stakeholders where possible and appropriate.
• Investment in preparing for anticipated IASME accreditation, anticipated in H1 2022, which will build on the Group’s existing Cyber Essentials Plus accreditation.
• Enhanced a number of controls, improving proactive monitoring of key areas of the IT infrastructure and has led to refreshed IT policies together with the rollout of computer-based training modules to colleagues.
• Awarding options to a range of senior managers and key individuals within the organisation to support the incentivisation of the workforce as well as to provide a tool to encourage the retainment of individuals over the medium term.
• Introduction and formalisation of a talent and succession planning framework.
• Highly proficient and fully resourced Safety Department, utilising industry leading tools and techniques proactively, to identify and eliminate or mitigate safety risks before they lead to damage or harm.
• Establishment of Compliance & Assurance functional service line, established in 2021 following the Group’s strategic review which aimed to enhance focus on our regulatory compliance thereby improving the service to customers and drive service excellence.
• Recruitment of a Corporate Compliance Officer who, working closely with the Group Legal function, is tasked with leading the evolution and development of the corporate compliance landscape across the Group.

Supply Chain Management

Responsible Procurement

• New Procurement Charter which seeks to encourage good Social Value behaviours through our supply chain, particularly with regard to employment and labour practices

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UK Government’s Streamlined Energy and Carbon Reporting (SECR), ISO 14064-1:2018

Certifications: ISO 45001, ISO 14001

Third-party Assurance: Carbon Footprint Ltd

Environmental Metrics

ESG Focus Areas

• Safety
• Employee Wellbeing
• Diversity & Inclusion
• Environmental Responsibility (Carbon Emissions)
• Ethical Business Practices
• Community Engagement

Environmental Achievements

• Commissioned independent GHG emissions assessment by Carbon Footprint Ltd since 2018, reporting Scope 1, 2, and 3 emissions.
• Implemented waste recycling schemes to limit environmental impact.
• Set a direction of travel to achieve Net Zero by 2050.

Social Achievements

• Implemented a cost-of-living salary package to support lower earners.
• Continued investment in the ‘We care’ employee wellbeing program.
• Made progress with Social Value commitments in Women in Aviation, Armed Forces Covenant, and Scottish Business Pledge.
• Revamped employee experience from application to onboarding.
• Maximised apprentice levy to upskill managers and add resources.

Governance Achievements

• Updated Anti-Bribery Corruption (ABC) compliance plan.
• Revised and improved mandatory ABC training for all staff.
• Enhanced ‘Know Your Customer’ questionnaire and updated policy with training.
• Implemented a gifts, hospitality, and entertainment policy with a formal Group gift register.
• Increased awareness of the whistleblowing online service.

Climate Goals & Targets

Environmental Challenges

• Inadequate funding and liquidity constraints.
• Inferior financial performance.
• Cost and availability of sufficient financing.
• Increasing customer concentration.
• Slippage in securing SaaS contracts.
• Potential impact from pandemics, climate change, and political/economic changes.
• Cyber threats.
• Reliance on key individuals.
• Increasing regulatory burden.

Mitigation Strategies

• Successful debt restructuring and refinancing.
• Sale and leaseback of assets to improve capital structure and liquidity.
• Focus on organic growth opportunities and optimization initiatives.
• Monitoring fixed cost base.
• Investment in SaaS sales function.
• Active measures to offset challenges from COVID-19 and climate change.
• Investment in information security and IASME accreditation.
• Formal talent and succession planning framework.
• Dedicated Compliance & Assurance team and Corporate Compliance Officer.

Supply Chain Management

Responsible Procurement

• Procurement Charter promoting good Social Value behaviours, including modern slavery and cyber protection standards.

Climate-Related Risks & Opportunities

Physical Risks

• Environmental catastrophes stemming from climate change

Transition Risks

• Regulatory changes, market shifts

Opportunities

• Development of energy-efficient products and low-carbon technologies

Reporting Standards

Frameworks Used: UK-adopted International Accounting Standards, FRS 101 Reduced Disclosure Framework, TCFD (partially)

Certifications: ISO 45001 (safety), ISO 14001 (environment)

Third-party Assurance: Crowe U.K. LLP

Sustainable Products & Innovation

• myairops® aviation software solutions

Environmental Metrics

ESG Focus Areas

• Employee wellbeing
• Ethical business practices
• Good governance
• Environmental footprint reduction
• Community support
• Climate change mitigation

Environmental Achievements

• Maintained ISO 14001:2019 accreditation
• Implemented waste and paper recycling schemes
• Reduced Scope 1, 2, and 3 GHG emissions (excluding client emissions) to 4,719 tonnes of CO2e in 2023 from 5,538 tonnes in 2022

Social Achievements

• Maintained a safe, caring, and balanced, high-performance culture
• Provided regionally appropriate employee benefits
• Supported local communities through apprenticeships, work experience, and charitable activities
• Promoted 5 employees through mentoring and development programs

Governance Achievements

• Completed the sale of its US MRO business for $131m
• Strengthened governance processes
• Returned £23.9m to shareholders through a tender offer and delisting from AIM

Climate Goals & Targets

Environmental Challenges

• Inadequate funding and liquidity constraints
• Integration of new contracts
• Inferior financial performance
• Impact of pandemics, climate change, and political/economic changes
• Cyber threats
• Reliance on key individuals
• Staff recruitment and retention
• Increasing regulatory burden
• Failure of business processes and reporting systems

Mitigation Strategies

• Sale of US MRO business to strengthen balance sheet
• Focus on margin improvement and cost reduction
• Active measures to offset pandemic challenges
• Bolstering cybersecurity defenses and aligning with ISO27001 standards
• Formal talent and succession planning framework
• Dedicated staff for regulatory compliance
• Use of standard accounting and reporting packages

Supply Chain Management

Responsible Procurement

• Procurement Charter encouraging good Social Value behaviours, particularly regarding employment and labour practices, environmental and greenhouse gas reduction practices

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events impacting ground infrastructure, logistics, and supply chain

Transition Risks

• Legislative changes increasing taxation on business aviation
• Delays in SAF fuel technology development

Reporting Standards

Frameworks Used: TCFD, SECR, ESOS

Certifications: ISO 14001:2019, ISO 45001

Third-party Assurance: Carbon Footprint Ltd

Sustainable Products & Innovation

• Suite of business aviation software solutions