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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Avation Plc | LSE:AVAP | London | Ordinary Share | GB00B196F554 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -4.00 | -3.64% | 106.00 | 105.00 | 107.00 | 108.00 | 106.00 | 108.00 | 51,053 | 11:51:35 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Equip Rental & Leasing, Nec | 91.86M | 12.19M | 0.1720 | 6.16 | 75.11M |
From Apr 2019 to Apr 2024
TIDMAVAP
RNS Number : 0791Q
Avation PLC
07 September 2017
AVATION PLC
("Avation" or "the Company")
PRELIMINARY UNAUDITED Financial Results for the YEar ended 30 june 2017
and Interim Management Statement
Avation PLC (LSE: AVAP), the commercial passenger aircraft leasing company, announces preliminary unaudited financial results for the year ending 30 June 2017.
Overview
Hot Features
Premium
-- Lease revenue increased by 32% to $94.2 million;
-- Earnings before interest and tax ("EBIT" or "Operating Profit") grew 32% to $60.2 million;
-- Profit before taxation increased by 18% to $21.4 million;
-- Total profit after tax increased 16% to $21.3 million;
-- Operating cash flows increased 20% to $63.0 million;
-- Dividend per share increased by 85% to 6.00 US cents; and
-- Earnings per share ("EPS") increased by 6% to 36.3 US cents.
Executive Chairman, Jeff Chatfield, said:
"Avation is pleased to report record revenue, profit and operating cashflow in the year to 30 June 2017. Avation continues to diversify its aircraft fleet while adding balance sheet scale. Fleet metrics have improved with lease yield rising to 12.8% (2016: 12.3%) while the average age of the fleet has reduced and the average remaining lease term for the aircraft portfolio has increased.
The Company has ended the year with a substantial cash balance, lower leverage and has an improved credit rating, which are features that support the funding of further fleet expansion. Avation aims to grow the aircraft portfolio materially during the coming financial year and is currently assessing a number of aircraft for acquisition."
Aircraft Fleet
Aircraft Type 30 June
2017
----------------- --------
ATR 72-600 13
----------------- --------
ATR 72-500 6
----------------- --------
Airbus A321-200 8
----------------- --------
Airbus A320-200 3
----------------- --------
Fokker 100 5
----------------- --------
Total 35
----------------- --------
As at 30 June 2017 Avation's fleet comprised 35 aircraft, including seven aircraft on finance leases. Fleet metrics have continued to improve, the weighted average age of the operating fleet (excluding finance leases) is 3.3 years (2016: 4.2 years) and the weighted average remaining lease term is 7.5 years (2016: 6.8 years). Avation has signed a letter of intent to lease three ATR 72 turboprop aircraft for delivery to Mandarin Airlines, one of which is included in the above fleet numbers with two additional aircraft on order for delivery in the latter part of 2017.
Financial Highlights
30 June 30 June Change
2017 2016
US$ 000's US$ 000's
------------------------------ ----------- ----------- -------
Lease revenue 94,173 71,190 32%
------------------------------ ----------- ----------- -------
Lease yield 12.8% 12.3% 0.5%
------------------------------ ----------- ----------- -------
Operating profit
(EBIT) 60,199 45,573 32%
------------------------------ ----------- ----------- -------
Operating profit
margin 63.9% 64.0 % (0.1)%
------------------------------ ----------- ----------- -------
Administrative expense 8,046 7,550 7%
------------------------------ ----------- ----------- -------
Administrative expense/lease
revenue 8.5% 10.6% (2.1%)
------------------------------ ----------- ----------- -------
Pre tax profit 21,363 18,069 18%
------------------------------ ----------- ----------- -------
Total profit after
tax 21,257 18,280 16%
------------------------------ ----------- ----------- -------
EPS 36.3 cents 34.4 cents 6%
------------------------------ ----------- ----------- -------
Dividend 6.00 cents 3.25 cents 85%
------------------------------ ----------- ----------- -------
Operating cash flows 63,020 52,547 20%
------------------------------ ----------- ----------- -------
Fleet assets 744,731 724,982 3%
------------------------------ ----------- ----------- -------
Total assets 901,135 831,785 8%
------------------------------ ----------- ----------- -------
Cash and cash equivalents 87,692 48,267 82%
------------------------------ ----------- ----------- -------
Book value per share
US$ $3.21 $3.11 3%
------------------------------ ----------- ----------- -------
Fleet Summary
Aircraft assets increased 3% to $744.7 million (2016: $725.0 million) during the period. Fleet changes included the addition of four Airbus A321 jets on lease to VietJet. Two midlife Airbus A321 jets, one VietJet Airbus A321 and six ATR 72 turboprops were sold during the period.
By value, over 89% of Avation's fleet is represented by Airbus A321 jet and ATR 72 turboprop aircraft. Sales of these asset types during the period provides support for the valuation of the fleet and demonstrates the liquidity of these assets.
In addition to aircraft on operating leases, Finance lease receivables totalled $45.4 million (2016: $36.7 million).
Avation has one Airbus A320 aircraft on lease to Air Berlin, which announced insolvency on 15 August 2017 and therefore subsequently defaulted under its lease. Avation holds security deposits and substantial maintenance reserves as security for Air Berlin's lease obligations. Avation is liaising with Air Berlin and various third parties that have expressed interest in acquiring parts of the Air Berlin business and/or leasing this aircraft. The Airbus A320 aircraft is one of the most popular commercial aircraft and Avation expects the prompt transition of this aircraft to another airline.
Debt summary
30 June 30 June 2016
2017 US$000's
US$000's
------------------------- ---------- -------------
Loans and borrowings 648,813 615,724
------------------------- ---------- -------------
Cash & cash equivalents 87,692 48,267
------------------------- ---------- -------------
Net indebtedness 561,121 567,457
------------------------- ---------- -------------
Total loan to value
ratio (LTV) 72.0% 74.0%
------------------------- ---------- -------------
Weighted average cost
of secured debt 4.5% 4.3%
------------------------- ---------- -------------
The weighted average cost of secured debt facilities increased to 4.5% as at 30 June 2017 (2016: 4.3%) principally due to junior secured debt issued to fund the acquisition of aircraft leased to VietJet.
At the end of the financial period, Avation's overall loan to value ratio was 72.0% (2016: 74.0%) and 95.1% of total debt was at fixed or hedged interest rates (2016: 91.6%). At the end of the financial period, there was no related party debt other than pursuant to participation in senior unsecured notes issued under the Company's Global Medium Term Note Programme.
Upgrade to Credit Rating
In December 2016, Standard & Poor's Global Ratings advised that Avation's corporate credit rating has been upgraded to 'B+', Outlook Stable from 'B'; the Senior Unsecured Notes rating was raised to 'B' from 'B-'.
Fitch Ratings corporate credit rating for Avation is 'B+', Outlook Stable; the Senior Unsecured Notes rating is 'B+'.
During the period Japan Credit Rating Agency, Ltd assigned a Foreign Currency Long-term Issuer Rating for Avation of 'BB', Outlook Stable.
Dividend Payment
The Company paid a 6.00 US cents per share (2016: US 3.25 cents per share) dividend for the year ended 30 June 2017 on 10 August 2017.
Shareholders should note that dividends are paid by default in US Dollars. Shareholders who prefer to receive dividends in British Pounds (GBP) can elect to receive GBP by completing and returning a form to the Company's share registrar. Further details and a download of the form can be found at www.avation.net/dividends.html
Appointment to Board of Directors
Avation announced the appointment of Mr. Derek Sharples as independent non-executive Director to the Board in November 2016. Mr. Sharples has recently retired from the position of Chief Executive Officer of Airbus Helicopters Southeast Asia and was formerly Corporate Secretary and Head of the Legal Services at Airbus in Toulouse. Mr. Sharples is a resident of Singapore.
Market Positioning and Risk
Avation focuses on commercial passenger aircraft on long term leases. Avation's strategy focuses on new and relatively new aircraft. The Company's business model has a history of delivering consistent profitability while seeking to mitigate some of the risks associated with the aircraft leasing sector.
Avation aims to operate a fleet of aircraft with a low average age and long average remaining lease term to a diversified group of airlines. Avation will typically sell mid-life and older aircraft to redeploy capital to newer assets. This approach is intended to mitigate technology change risk, operational and financial risk, support sustained growth and deliver long term shareholder value.
The Company believes that it can attract airline customers, acquire leased aircraft and obtain the required funding for growth. Funding is traditionally sourced from capital markets, asset backed bank lending, the proceeds from disposal of aircraft and operating cashflow. As with all capital-intensive businesses access to acceptably priced funding is a risk. The aircraft leasing industry is subject to specific risks which include, but are not limited to, the creditworthiness of client airlines, over-production of new aircraft and market saturation, technology change in engines and aircraft, residual value risks, competition from other lessors and the risk of impairment of aircraft values.
Outlook and Interim Management Statement
Avation continues to grow its fleet and lease revenue year on year. Avation has demonstrated the liquidity of key aircraft types at a premium to book value and reduced the concentration of assets with individual airlines. New aircraft have been acquired since the commencement of the 2017 financial year while older aircraft have been sold or converted to finance leases. This has resulted in improved fleet age and average remaining lease term metrics.
Avation is an active trader of aircraft and from time to time will also consider the sale of individual or smaller portfolios of aircraft based on prevailing market opportunities and considerations of risk and airline concentrations.
Avation's strategy continues to target growth and diversification of aircraft assets, maintenance of strong average lease age and term metrics and adding new airline customers. Avation will consider acquiring twin aisle aircraft, in addition to single aisle jets and turboprops as part of a strategy to build a diversified portfolio of aircraft. This expanded portfolio allows for the potential to accelerate fleet growth in the future. Twin aisle aircraft may have a risk profile which is more exposed to technology change factors. The Company will seek to mitigate this risk.
Following the completion of the sale of six ATR 72 aircraft during the financial period, Avation has cash reserves and improved leverage to support the acquisition of additional aircraft, including the three ATR 72 aircraft to be delivered to Mandarin Airlines in the latter part of 2017.
Avation's Board of Directors is pleased to deliver another record set of financial results from its aircraft leasing business while executing its strategy of fleet growth and risk mitigation. Avation is in a strong position to deliver diversification during the current financial year and to rebuild its fleet after the disposal of six ATR 72 aircraft.
Results Conference Call
Avation's senior management team will host a conference call on 7 September 2017, at 1pm BST (UK) / 8am EST (US) / 8pm SGT (Singapore), to discuss the Company's financial results. Participants should dial: United Kingdom 020 3059 8125; United States +1 724 928 9460; Singapore 800 101 2697; other locations +44 20 3059 8125 and quote 'Avation' when prompted. The conference call will also be webcast live through the following link:
http://avation.emincote.com/results/2017finalresults
To view the webcast investors will be invited to register their name and email address, participants can do this in advance or on the day.
Annual General Meeting
The Annual General Meeting of the Company is expected to be held at the Company's headquarters in Singapore on 13 November 2017 at 10am GMT (UK) / 6pm SGT (Singapore). Notice of the Annual General Meeting will be issued in due course.
Forward Looking Statements
This release contains certain "forward looking statements". Forward looking statements may be identified by words such as "expects," "intends," "anticipates," "plans," "believes," "seeks," "estimates," "will," or words of similar meaning and include, but are not limited to, statements regarding the outlook for Avation's future business and financial performance. Forward looking statements are based on management's current expectations and assumptions, which are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Actual outcomes and results may differ materially due to global political, economic, business, competitive, market, regulatory and other factors and risks. Further information on the factors and risks that may affect Avation's business is included in Avation's regulatory announcements from time to time, including its Annual Report, Full Year Financial Results and Half Year Results announcements. Avation expressly disclaims any obligation to update or revise any of these forward looking statements, whether because of future events, new information, a change in its views or expectations, or otherwise.
Accounting policies
Financial information contained in this preliminary unaudited results announcement has been prepared using accounting policies that are consistent with the Company's Annual Report for the year ended 30 June 2016.
-S-
More information on Avation PLC can be found at: www.avation.net
Enquiries:
Avation PLC T: +65 6252 2077 Jeff Chatfield, Executive Chairman
AVATION PLC
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE FINANCIAL YEARED 30 JUNE 2017
2017 2016
US$'000s US$'000s
Continuing operations
Revenue 94,173 71,190
Other income 1,086 3,045
95,259 74,235
Depreciation (32,300) (23,201)
Gain on disposal of aircraft 5,357 3,660
Impairment loss on aircraft - (902)
Administrative expenses (8,046) (7,550)
Other expenses (71) (669)
Operating profit 60,199 45,573
Finance income 1,790 1,202
Finance expenses (40,626) (28,706)
Profit before taxation 21,363 18,069
Taxation (106) 202
Profit from continuing operations 21,257 18,271
Discontinued operations
Profit from discontinued operations - 9
--------- ---------
Total profit 21,257 18,280
--------- ---------
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss:
Currency translation differences arising on consolidation - (6)
Fair value gain/(loss) on derivative financial instruments 2,804 (2,158)
2,804 (2,164)
Items that may not be reclassified subsequently to profit or loss:
Revaluation (loss)/gain on property, plant and equipment, net of tax (5,568) 30,987
--------- ---------
Other comprehensive income, net of tax (2,764) 28,823
Total comprehensive income for the year 18,493 47,103
--------- ---------
Profit attributable to:
Equity holders of the Company 21,262 18,279
Non-controlling interests (5) 1
21,257 18,280
--------- ---------
Total comprehensive income attributable to:
Equity holders of the Company 18,509 47,098
Non-controlling interests (16) 5
18,493 47,103
--------- ---------
AVATION PLC
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE FINANCIAL YEARED 30 JUNE 2017
2017 2016
US$'000s US$'000s
Earnings per share for profit from continuing and discontinued
operations attributable to equity holders of the Company
Basic earnings per share:
36.27 34.33
From continuing operations cents cents
36.27 34.35
From total operations cents cents
Diluted earnings per share:
35.68 34.13
From continuing operations cents cents
35.68 34.15
From total operations cents cents
--------- ---------
AVATION PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FOR THE FINANCIAL YEARED 30 JUNE 2017
2017 2016
US$'000s US$'000s
ASSETS:
Current assets:
Cash and cash equivalents 87,692 48,267
Trade and other receivables 6,109 5,631
Finance lease receivables 36,641 3,032
Options held for trading 3,640 3,040
Total current assets 134,082 59,970
Non-current assets:
Trade and other receivables 9,320 11,304
Finance lease receivables 8,728 33,627
Property, plant and equipment 744,731 724,982
Goodwill 1,902 1,902
Derivative financial instruments 2,372 -
--------- ---------
Total non-current assets 767,053 771,815
Total assets 901,135 831,785
--------- ---------
LIABILITIES AND EQUITY:
Current liabilities:
Trade and other payables 14,920 10,065
Provision for taxation 3,515 1,029
Loans and borrowings 94,122 72,423
Maintenance reserves 451 7,440
--------- ---------
Total current liabilities 113,008 90,957
Non-current liabilities:
Trade and other payables 11,480 13,471
Loans and borrowings 554,691 543,301
Derivative financial instruments 1,901 2,387
Deferred tax liabilities 3,318 4,738
Maintenance reserves 20,813 3,323
Total non-current liabilities 592,203 567,220
Equity attributable to shareholders:
Share capital 1,058 993
Treasury shares - (1)
Share premium 48,365 38,925
Merger reserve 6,715 6,715
Asset revaluation reserve 24,492 41,142
Capital reserve 8,876 8,876
Other reserves 801 (1,814)
Retained earnings 105,556 78,679
--------- ---------
195,863 173,515
Non-controlling interest 61 93
--------- ---------
Total equity 195,924 173,608
Total liabilities and equity 901,135 831,785
--------- ---------
AVATION PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEARED 30 JUNE 2017
Attributable to shareholders of the parent
Share Treasury Share Merger Asset Capital Other Retained Total Non-controlling Total
capital shares premium reserve revaluation reserve reserves earnings interest equity
reserve
US$'000s US$'000s US$'000s US$'000s US$'000s US$'000s US$'000s US$'000s US$'000s US$'000s US$'000s
Balance at
1 July 2016 993 (1) 38,925 6,715 41,142 8,876 (1,814) 78,679 173,515 93 173,608
Profit for
the year - - - - - - - 21,262 21,262 (5) 21,257
Other
comprehensive
income - - - - (5,557) - 2,804 - (2,753) (11) (2,764)
--------- --------- --------- --------- ------------ --------- --------- --------- --------- ---------------- ---------
Total
comprehensive
income - - - - (5,557) - 2,804 21,262 18,509 (16) 18,493
--------- --------- --------- --------- ------------ --------- --------- --------- --------- ---------------- ---------
Dividend paid
during the
year - - - - - - - (1,820) (1,820) - (1,820)
Dividend payable (3,664) (3,664) - (3,664)
Re-issue of
treasury shares - 1 - - - - - - 1 - 1
Issue of new
shares 65 - 9,725 - - - (403) - 9,387 - 9,387
Share issue
expenses - - (285) - - - - - (285) - (285)
Transfer of
asset
revaluation
surplus upon
sale of aircraft - - - - (11,093) - - 11,093 - - -
Dividend paid
to
non-controlling
interest of
a subsidiary - - - - - - - - - (16) (16)
Warrant expired - - - - - - (6) 6 - - -
Warrants expense - - - - - - 220 - 220 - 220
--------- --------- --------- --------- ------------ --------- --------- --------- --------- ---------------- ---------
Total
transactions
with owners
recognised
directly in
equity 65 1 9,440 - (11,093) - (189) 5,615 3,839 (16) 3,823
--------- --------- --------- --------- ------------ --------- --------- --------- --------- ---------------- ---------
Balance at
30 June 2017 1,058 - 48,365 6,715 24,492 8,876 801 105,556 195,863 61 195,924
--------- --------- --------- --------- ------------ --------- --------- --------- --------- ---------------- ---------
AVATION PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEARED 30 JUNE 2016
Attributable to shareholders of the parent
Share Treasury Share Merger Asset Capital Other Retained Total Non-controlling Total
capital shares premium reserve revaluation reserve reserves earnings interest equity
reserve
US$'000s US$'000s US$'000s US$'000s US$'000s US$'000s US$'000s US$'000s US$'000s US$'000s US$'000s
Balance at
1 July 2015 991 (682) 38,692 6,715 10,159 8,459 50 62,363 126,747 1,457 128,204
Profit for
the year - - - - - - - 18,279 18,279 1 18,280
Other
comprehensive
income - - - - 30,983 - (2,164) - 28,819 4 28,823
--------- --------- --------- --------- ------------ --------- --------- ---------- --------- ---------------- ----------
Total
comprehensive
income - - - - 30,983 - (2,164) 18,279 47,098 5 47,103
--------- --------- --------- --------- ------------ --------- --------- ---------- --------- ---------------- ----------
Dividend paid - - - - - - - (1,656) (1,656) - (1,656)
Purchase of
treasury
shares - (7,936) - - - - - - (7,936) - (7,936)
Re-issue of
treasury
shares - 8,617 - - - - - (307) 8,310 - 8,310
Treasury shares
of a
subsidiary - - - - - 882 - - 882 2 884
Issue of new
shares 2 - 233 - - (39) - 196 - 196
Warrants
expense - - - - - - 339 - 339 - 339
Change in
ownership
interest in
a subsidiary - - - - - (465) - - (465) (1,371) (1,836)
Total
transactions
with owners
recognised
directly in
equity 2 681 233 - - 417 300 (1,963) (330) (1,369) (1,699)
--------- --------- --------- --------- ------------ --------- --------- ---------- --------- ---------------- ----------
Balance at
30 June 2016 993 (1) 38,925 6,715 41,142 8,876 (1,814) 78,679 173,515 93 173,608
--------- --------- --------- --------- ------------ --------- --------- ---------- --------- ---------------- ----------
AVATION PLC
CONSOLIDATED STATEMENT OF CASHFLOWS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017
2017 2016
US$'000s US$'000s
Cash flows from operating activities:
Profit before taxation from continuing operations 21,363 18,069
Profit before taxation from discontinued operations - 9
---------- ----------
Profit before income tax 21,363 18,078
Adjustments for:
Depreciation expense 32,300 23,201
Warrants expense 220 339
Impairment loss on aircraft - 902
Impairment loss on trade receivables 41 7
Impairment loss on goodwill - 482
Amortisation of loan insurance premium 1,078 1,078
Amortisation of interest expense on non-current deposits 924 376
Non-trade receivables written off 30 -
Gain on disposal of aircraft (5,357) (3,660)
Gain on disposal of assets held for sale - (25)
Fair value gain on options held for trading (600) (2,940)
Fair value gain on derivatives (54) -
Finance income from discounting non-current deposits to fair value (929) (393)
Interest income (861) (809)
Interest expense 37,396 26,811
---------- ----------
Operating cash flows before working capital changes 85,551 63,447
Movement in working capital:
Trade and other receivables and finance lease receivables 5,034 3,798
Trade and other payables (1,269) 1,226
Maintenance reserves 10,501 9,938
---------- ----------
Cash from operations 99,817 78,409
Interest received 846 809
Interest paid (36,922) (26,034)
Income tax paid (721) (637)
---------- ----------
Net cash from operating activities 63,020 52,547
---------- ----------
Cash flows from investing activities:
Purchase of property, plant and equipment (275,665) (323,222)
Purchase of options held for trading - (100)
Proceeds from disposal of aircraft 211,714 24,755
Proceeds from disposal of assets held for sale - 55
Purchase of additional shares in a subsidiary from non-controlling interest - (22)
Repurchase of a subsidiary's treasury shares - (884)
---------- ----------
Net cash used in investing activities (63,951) (299,418)
---------- ----------
Cash flows from financing activities:
Net proceeds from issuance of ordinary shares 9,102 196
Dividends paid to shareholders (1,820) (1,656)
Repurchase of treasury shares - (7,936)
Proceeds from sale of treasury shares 1 8,310
Dividend paid to non-controlling interest of a subsidiary (16) (46)
Proceeds from loans and borrowings, net of transactions costs 236,243 233,869
Repayment of loans and borrowings (203,154) (46,240)
---------- ----------
Net cash from financing activities 40,356 186,497
---------- ----------
Effects of exchange rates on cash and cash equivalents - (6)
---------- ----------
Net increase/(decrease) in cash and cash equivalents 39,425 (60,380)
Cash and cash equivalents at beginning of financial year 48,267 108,647
---------- ----------
Cash and cash equivalents at end of financial year 87,692 48,267
---------- ----------
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EASNXELKXEEF
(END) Dow Jones Newswires
September 07, 2017 02:05 ET (06:05 GMT)
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