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    Transport & logistics


    Headquartered in Brussels, Belgium, TCR is Europe’s largest independent asset manager of airport ground support equipment (“GSE”) and operates at 149 airports.

    Since inception, TCR has defined the market for leased GSE, providing high quality assets and a full service leasing, maintenance and fleet management offering to its clients, which are predominantly independent ground handling companies, airlines and airports. This enables GSE operators to concentrate on their core business of ground handling. The GSE that TCR provides is critical infrastructure, without which some of Europe’s busiest airports could not operate.

    Aerolima acquisition

    In 2019, TCR acquired Aerolima, another lessor of GSE in France. The transaction added approximately 2,000 pieces of equipment, 20 airports and 12 workshops to TCR’s existing business.

    Developments in the year

    TCR performed well in the year, growing to lease ground support equipment in 149 airports, predominantly in Europe, where it is the market leader, but also in Malaysia and expanding into Australia, New Zealand, the US and the Middle East under our ownership.

    The company has made good progress in anchoring its activities in the US with new contracts. It also won a repair and maintenance contract with British Airways, completed a sale and lease back agreement of equipment with Swissport in Saudi Arabia and secured a full service rental contract with Etihad in Abu Dhabi, which marked TCR’s entry into the Middle East.

    TCR has been affected by the dramatic fall in air travel since the start of the Covid-19 pandemic. The majority of its revenues are lease rental payments that are fixed and not impacted by reduced air traffic. Some of TCR’s customers, comprising airlines, airports and ground handlers, are facing cash flow shortfalls and that could potentially have consequential effects on TCR. Longer term, air traffic may take several years to return to pre-pandemic levels.

    During these uncertain trading conditions, TCR is managing its liquidity position and working closely with its customers. It will also explore potential new business opportunities arising from the crisis.

    Investment rationale

    TCR fits with the Company’s strategy of investing in companies with good asset backing, strong market positions and barriers to entry, yet with operational levers to achieve attractive returns for shareholders through active asset management:

    • GSE is a scarce resource that is critical to the functioning of an airport; through first mover advantage, TCR has benefited from securing the largest independent GSE fleet in Europe. TCR has access to maintenance workshops in prime locations at airports, many of which are located airside. This means that a high quality maintenance and asset management service can be provided, resulting in high availability of TCR’s fleet.
    • TCR is able to offer full-service rentals on a pan-European basis. This creates competitive advantages against competitors, which tend to offer either dry leases or only repair and maintenance services. TCR’s network means it can offer pan-European solutions at multiple locations, matching the footprints of its customers.
    • Outsourcing ownership of GSE equipment makes economic sense for independent ground handlers, as it allows them to manage the mismatch between short-term handling contracts and the typically 10-15 year useful life of equipment.
    • TCR’s rental contracts are aligned with the ground handlers’ contracts with the airlines and are typically 3-5 years in duration. TCR has experienced a high level of contract renewal.
    • The business has a diversified portfolio and is present at over 100 airports across 12 countries with a diverse contract and customer base meaning the revenues of the business are not materially reliant on a single client or geography. 
    • The investment will provide exposure to the long-term growth in the aviation market, which is fundamentally GDP driven, yet it is expected to be insulated from short-term shocks to demand due to its exposure to aircraft movements rather than passenger numbers.
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