AeroBox PLC

Elric Lloyd-Langton 11th September 2003

Aerobox (24.5p) started of as Innobox Plc which formed on 17th December 1999 to build, primarily through selected acquisition. Subsequently, floated on the London AIM market on 22nd January 2001. A later acquisition was One of those opportunities was in a company called Aerospace Composite Structures, located in the USA in Albuquerque, New Mexico January 2001. Soon to follow was Aerospace Composite Structures(ACS) also of New Mexico, which had developed a portfolio of new air cargo container products, which use composite materials instead of aluminium. Innobox made a secured convertible loan of 200,000 to ACS in January 2002, this was based on a valuation of cUS$11m.

On 20th March 2003 the entire share capital of ACS was acquired by AeroBox Plc. Innoboxs investment in ACS was converted into equity immediately prior to the Acquisition. The initial consideration payable under the Acquisition agreement was 8.4 million satisfied by the issue of 42,000,000 ordinary shares of 1p each in the capital of AeroBox Plc at 20p per share.

AeroBox plc floated on the alternative investment market (AIM) in March of this year after Aerospace Composite Structures was acquired by Greatstride plc, affectively a cash shell. Aerobox has patented a revolutionary thermoplastic LD3 air cargo container made of a lighter and stronger composite that offers improved durability and easier storage than traditional aluminium under floor cargo containers, as well as being 12% lighter. This new design has the added benefit of being able to be taken apart for logistic transfer. After extensive testing, its cargo holder ULD-3(Unit Load Devices) received FAA approval in March 2002.

The commercial benefits to airline companies using AeroBoxs containers are compelling. They provide excellent cost savings both from a fuel, repair and logistic perspective. Its ULD-3 is the first of a number of aircraft containers AeroBox is bringing to the market. On a conservative basis the global market for air freight containers is approximately 650,000 units at a price of up to $1500, which equals $975 milion. Yearly replacement and new unit sales values are approximately $200m. World cargo growth is approximately 6% and rising. The AeroBox ULD LD3 containers cost $1200 each and have an estimated life of 6-10 years. The average life of the existing aluminium type containers is 3-4 years. A win, win situation as far as costs accrue. The significance of Aerobox flat pack container should not be under estimated, effectively, the ULD LD3 container can be folded away. Example: You can fold away 12 ULD LD3`s in the same space as the conventional container.


On 21 May 2003 Aerobox announced Watermark Group PLC, a leading supplier of services to the airline industry with over 150 clients, had completed terms of a joint venture with them which has developed a new lightweight, flat pack air freight container, is in commercial trial over 150 containers with 15 airlines for its device. By utilising the Watermark Sales team the Company now has an objective of achieving a 10% market share within 18-24 months. The JV with Watermark could prove a significant one, given Watermarks expertise within the industry.

June of this year Virgin Atlantic agreed to be the first to trial the new ULD LD3 containers. Virgin, will trial the 10 Aerobox containers along side the conventional aluminium containers.

AeroBox ULD Commercial Director:

Our mission is to be the Number One provider to the aviation and logistics industry of innovative solutions in baggage and cargo containers. We are grateful to Virgin Atlantic Cargo having kindly agreed to be the first commercial airline to trial this new product.

While Aerobox has attracted the attention of the retail investor imagination, Aerobox has also attracted attention from some celebrity backers, which include British comics David Baddiel and Angus Deayton.

John Caulcutt, Chief Executive of Watermark, said, 'It is intended that this project will further expand the range of services which Watermark can provide to the airline industry. AeroBox has developed an exciting new technology with significant potential cost reduction benefits for customers, with which we are pleased to be associated.

Bob Bushman, Chief Executive of AeroBox, added: 'This tie up will allow us far quicker access to the global airline community than we had earlier envisaged through a proven international sales force. It will bring forward our business plan and allow us to focus on training, production and development.

Air cargo volumes are expected to double over the next 12-20 years. This is backed up by Airbus, which has stated that it will commission more than 700 freight aircraft over the next two decades. Potential customers for AeroBox containers include major commercial airlines operating wide-body aircraft and companies such as The Post Office FedEx and UPS, in short, the whole logistics market. The benefits of AeroBox products cannot be ignored by the airline industry. The product is light, strong, collapsible, repairable and has a long working life. Although AeroBox will have to work hard to maximise the head start it has over its competitors, we think now that the product has FAA approval and cargo carriers are already testing its ULD-3 offering, it has a very good chance of winning a good proportion of the ULD market over the next 2 years.

Aerobox should be viewed as a speculative investment until such a time as Watermark and Aerobox provide potential investors with firm contracts form the logistic fraternity. However, the more speculative investor would argue that playing the waiting game, you miss out on potentially huge rewards. Which ever you are, you should not lose sight of the fact that Aerobox has no real history to which you can judge up on.

Please note that I hold Aerobox shares.

AEROBOX PlC (ARX)

comment on the trading update
"completing its transformation from a development company
to one with full-scale production capabilities"

June 27 2004

Edward Kalfayan

Before I continue with what I beleive to be an important update on AeroBox, in line with the editors transparent stance, I must confess to buying into the Aerobox story.

Friday, late morning, a very bullish trading statement drove the share price upwards persistently for the rest of the day, ten ticks up and only two ticks down, to finish 13% up, at a high for the day, This augurs well for Monday morning, when it looks as though a breakout may occur.

Three months after we featured this new company last September, the story had caught the imagination of enough small shareholders for the share price to surge by 60% from 25p to 40p. After three months of trials with 25 airlines, on Jan 21, came the news that the first sales had been made within the timescales originally envisaged and the price responded with a rise of 23% on that day. However, in parallel with most other small companies in a pre-commercialised state, and in the absence of any news of marketing success, the share price has halved since mid-Feb. The SP performance on Friday indicates that the market now sees this retracement as a good buying opportunity on todays confident statement by the CEO.

Orders

Aer Lingus had placed an order for 100 units with an option on a further 900 during 2004, whilst Virgin Atlantic had agreed to replace their entire stock of LD3 (lower deck) cargo and baggage containers at their Gatwick base subject to detailed contract terms being concluded. Though not spelt out at the time, these orders for standard LD3 containers were probably worth $1000/each and thus at least $2m in total. LD3s account for approximately 50% of the world ULD (Unit Load Delivery) market. North West Airlines, Cathay Pacific,Singapore Airlines, Varig, and Sri Lankan Airlines, are also known to be considering the AeroBox, after several months of trials, as is UnitPool, a management company which oversees the interests of 15 European and African airlines.

Production ramp-up

Robert Bushman CEO, who holds 4.23% of the shares, has just said that the company has almost completed its transformation from a development company to one with full-scale production capabilities.
Aerospace Composite Structures LLC (ACS), in Albuquerque, New Mexico - a subsidiary of AeroBox plc, has the licence to make the plastic panels from which the containers are assembled, Until February this year production was slow - having to build by hand the first 100 containers offered free for testing by interested airlines . From Feb commercial production began at 40/month thus returning approx $40k/month towards overheads - $250k/month in last years accounts, but now probably lower with the ending of the free, testing program.

Yesterdays news was that the Aer Lingus contract had been completed and that the Virgin contract would absorb all further production to September.

At the end of September, when some 300 Aero boxes will have been delivered, the new automated production line kicks off at the new target rate of 400 containers/month and consequently revenue of say $5m/pa. The figures will be more visible from the H1 a/cs due end-Sept, and should show that Aerobox , smooth production allowing, will be in profit immediately thereafter. Seymour Pierce forecasts sales in Y2005 of $10.25m, PBT of $1.32m and eps of 1.7p, with sales doubling in 2006 to $20.3m, PBT of $4.830m, and eps of 6.2p. On these figures the shares would be very cheap indeed at todays 20.25p, but to reach them production would have to double in 2005 and redouble in 2006. This does not seem out of the way as the 400/month target is for a single shift. There should therefore also be a sharp increase in profitability, if output can be increased without extra capital expenditure just by moving to a two- or three shift system.

It was also announced that a New York office at Kennedy International Airport in New York will be the base for two newly appointed sales agents. Another two other will operate from their own offices in Europe and the Far East.

The company is working with Kelvin Technologies to develop a refrigerated unit, and said today that initial tests were 'very encouraging'. Chairman David Sebire explained that the product is targeted at the shipment of critical substances such as vaccines, which need to be maintained at the right temperature during shipment.

The cost of each unit is expected to be between $15-50k, the gross margins are also expected to be quite handsome. However, as yet, there are no available details from the company in this regard, or the likely percentage break down in respect of AeroBox or Kelvin Technologies share in revenues.

One major airline is already talking to AeroBox about designing a container specifically to fit its aircraft, which he said was very promising.

ACS has also identified opportunities for the technology outside of the initial aviation market. Panels are already in use for truck bodies and are ideal for temporary buildings, such as may be used by the military. Much longer term, Sebire thinks there may even be an opportunity to replace the metal containers used in shipping.

CEO Robert Bushmans full statement

'Since the end of May, we have contacted customers directly and are delighted with their feedback and praise for the AeroBox. The consistent theme is that the AeroBox lives up to all its promises and sells itself because of its robustness, reliability and reduction in safety risks for ground handling staff.

We are concentrating on bringing the new production plant fully on stream within the next three months to meet the demand for the AKE. We will then expand our ULD range in response to customer demand generated by the performance of the AeroBox itself and the excellent new prospects being generated by the four new agents who are all experienced aviation executives with incomparable experience in the air cargo industry.

Our transformation from development to full scale production is almost complete. One year ago we were a promising company with a development prototype but no customers or commercial production capacity. We now have customers, production capacity, a proven product, industry recognition and a strong management team and supplier base. The opportunities for our technology and know how beyond the initial aviation market are also coming sharply into focus. As CEO and one of the largest shareholders, I look forward with increasing confidence as we start to deliver on the promise shown over the last five years.'


Notes on the AeroBox

The AeroBox is constructed of AeroPlaz(TM) panels, a honeycomb sandwich design using thermoplastic composite materials. This evolutionary design makes the AeroBox tougher and easier to repair than traditional metal air cargo containers.

According to Tom Boyle of ACS, "The AeroBox can cut ULD maintenance expenses by up to 50% because repairs can be easily made on site by airline employees, rather than having to take the container out of service for long periods of time. Aluminium containers, On a recent test of 1700 flight legs, damage repair costs per flight leg averaged $2/case . These costs can be almost completely eliminated with the AeroBox.

Ground crews are enthusiastic about the great increase in safety they deliver. AeroBoxes when penetrated by the prongs of a fork lift truck at speed will not destruct. Damaged boxes do not leave sharp edges. GAEROBOX PLC ashes tend to spring back into place allowing continued safe use of the box for the remainder of the journey.

The AeroBox was certified by the U.S. Federal Aviation Administration and the British Civil Aviation Authority in September 2003. It has also been certified by the European Aviation Safety Commission.

New Sales Team

Robert Bushman said, "All our new team members are experienced aviation industry professionals who will enable ACS to rapidly grow its AeroBox market position in the air transportation industry."

They include:

Robert Arendal - Europe, Middle East, Africa
Arendal held senior management positions in the U.S. and Europe for Seaboard World Airlines before becoming Cargolux Airlines' director of sales and marketing. He later became senior vice president of sales, marketing, and cargo services and was appointed deputy CEO in 1996.

Arendal heads RA Associates, an air cargo management and consulting group. He is a member of The International Air Cargo Association Hall of Fame and holds a graduate degree in business administration from Broderna Phaalmans Handelsinstitut in Stockholm, Sweden.

Dr. Ting Ho - Asia
Dr. Ho was the first Chief Economist for Worldwide Operations at FedEx. He
is currently managing partner of Logistics Venture Limited (LVL) that designs
multi-modal logistics networks to support direct sourcing and distribution for
manufacturers in Asia.

Dr. Ho has been an advisor to the Government of Sabah, Malaysia, the Sabah
Foundation and the OCBC Bank. He was Senior Economist at the Central Bank of
Malaysia and at McDonnell Douglas Aircraft.

Dr. Ho holds a BA degree in Economics from the University of Malaya and
received his MS and Ph.D. in Economics from the University of Pennsylvania.

James R Larsen - North America
Larsen began his airline career with Eastern Airlines before joining Seaboard World Airlines to manage air cargo and station operations at New York, Philadelphia and Los Angeles. He later became Director of Systems Traffic Planning at SWA.
Larsen was responsible for Ogden/Allied Aviation Services' cargo handling for marketing and operations.
In 1989, he became Manager of Air Cargo Business Development for the Port Authority of New York and New Jersey that included some of the world's largest air cargo centers: JFK International Airport, Newark Liberty International Airport and LaGuardia Airport.

Arthur F. McMahon - North America
McMahon has been a senior executive with Terminal One Management, Amtrak,
British Airways, and Trans World Airlines. As Senior Vice President - North America at British Airways, he managed reservations sales, city ticket offices and the operation of twenty-three North American airports. As CEO - Intercity Rail Service at Amtrak McMahon was instrumental in the railroad's reemphasis on customer service.

In 1997 he was named Executive Director of Terminal One Management, which built the $434 million world-class passenger facility at Kennedy Airport. McMahon is a graduate of Harvard's Advanced Management Program and earned his BBA and MBA degrees from Pace University

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Re Contract

RNS Number:2503E
AeroBox plc
08 June 2006



8 June 2006

AeroBox plc

Repeat Order from US Carrier


AeroBox plc is pleased to announce that its US trading subsidiary, AeroBox
Composite Structures LLC ("ACS"), has received a repeat order worth US$1.75m
from an American airline for its forkliftable variant of the AeroBox. The units
are scheduled for delivery over the next ten months. For commercial reasons ACS
is unable to disclose further details of this contract.


Ray Gibbs, Group Managing Director said: "We are absolutely delighted to have
received this repeat order from a major US airline as it represents another
powerful endorsement of our product. As of today, we have sold US$5.5m of ULDs
for scheduled delivery in 2006. We have also generated ULD sales orders of
US$5.4m for delivery in 2007 and beyond."


Enquiries:


Ray Gibbs, Group Managing Director,
AeroBox plc +44 20 7929 5599

Trevor Phillips
Holborn +44 20 7929 5599

Jeremy Porter
Seymour Pierce +44 20 7107 8000


Notes to Editors

LONDON (AFX) - AeroBox plc said its US trading subsidiary, AeroBox Composite
Structures LLC ("ACS"), has received a repeat order worth 1.75 mln usd from an
American airline for its forkliftable variant of the AeroBox.
The units are scheduled for delivery over the next ten months.
The company said that for commercial reasons ACS is unable to disclose
further details of this contract.
The group said it has now sold 5.5 mln usd of ULDs (unit load devices) for
scheduled delivery in 2006. It said it has also generated ULD sales orders of
5.4 mln usd for delivery in 2007 and beyond.
newsdesk@afxnews.com

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