Amedeo Air Four Plus Share Discussion Threads

[gary1966] 03/3/2023 17:07

Planes are leased by the airlines and so the rental is set at the outset including any indexation. Finance is linked to the lease so that the debt amortises over the life of the lease. There is then hopefully a period after that the planes may be able to be leased, with no associated debt, or the planes are sold or broken up for parts which creates the residual value that can be distributed to shareholders. Hence why plane shortages and increased resale value are good for plane leasing companies and their shareholders.

[mrscruff] 03/3/2023 14:15

@SKYSHIP. Can you sense check and help with a question, please... Net income (after factoring in all expenses, debts and plane maintenance costs) is about £120m a year and the market cap of just £138.58M (shockingly low P/E of over 1). Actual revenue is more than £200m and so the gross margin is over 55% - this is healthy (as 50 to 70% would be considered healthy). The dividend payout ratio also sensible at 23%. What would the corporate TAX rate on this as I can't find it? Do we also know when the debt needs refinancing as the rates currently are rather low? Do you know know the duration? Still a massively healthy margin for dividends.

But you can probably see my initial concern into looking at this as a Non-finance guy, as I don't want older investors self-liquidating shares in their portfolio while I add these to mine :-)

@Others : Question for the others like Gary who are looking at the planes and operations. What scope is there for increasing revenue going forward as they are not interested in buying more planes? Do we still have planes not in operation? Can we increase rents in line with inflation?

[gary1966] 03/3/2023 08:34

Nice report from Avation today. Plane shortages, increased resale value, increased NAV etc.

[skyship] 03/3/2023 07:28

Correct re Zeros. NBPS actually my largest holding. Provides a YTM of 5.47%pa to redemptiom in 20months time. Looked at another way, it provides a cast iron capital gain of 9.26% in those 20months. A great banker for a corner of my SIPP.

[mrscruff] 02/3/2023 22:43

AA4 is a debt business by aiming to maximising return to shareholders through the optimisation of debt and equity balances. Yes I can confirm planes are involved. Not sure about the other stuff. I have completed my DD, rates very good, debt is very high but so is rental income! and I am satisfied with my investment here.

rimau1 I am not sure why you would call someone a clown for not asking tradable debt, I invest in zeros if they are available. For example if you invest in NBPE you can buy the debt (ZDP) sometimes called zeros using the ticker NBPS.

[casholaa] 02/3/2023 20:59

You mean like bonds or possibly even toggle notes or like what caused the financial crash over a decade ago??

[my retirement fund] 02/3/2023 19:22

Yes but not just planes, also chisels, saws, hammers and drills.

[nicholasblake] 02/3/2023 17:39

Something to do with planes?

[rimau1] 02/3/2023 17:13

Thanks Gary, i was being prudent on my NAV expectations for 2023 - the A380 is no longer an attractive “asset” post pandemic relative to the narrow body A350 and Boeings and so i expect the NAV to adjust down accordingly. Emirates still have 2 of our A380’s grounded until Q1/Q2.

[mrscruff] 02/3/2023 17:12

According to my system (trading view) debt reduced from 1.56 billion in 2018 and did fall away a bit until in H1 of 2022 where debt increase slightly to 1.12 billion (net 965m). I am sure it is well covered. But with a market cap of a fraction of debt it is absolutely important to understand the terms in this environment as I don't know how much it is costing. This is typical of anything like this and common in REITs investments too as well as some private equity. This is why it is a complex investment.

I think whoever is asking if there are zero preference shares to buy as a PI is right to do so. I can not see any zeros to buy. If there had been I may have bought or at least be able to see the terms. I have heavy weekend of looking I suspect.

[gary1966] 02/3/2023 16:54

NAV around 115-117p, per last accounts and broker estimates, prior to compulsory purchase which would increase it a little further.

[rimau1] 02/3/2023 16:50

Tumbleweed…230;.so MRF i guess that would be a no!! Its actually a pretty straightforward aircraft leasing business so no, the debt is not traded whoever asked that. This is a deep value special situation play on 2 airlines (Emirates and Thai) recovering post pandemic and china reopening. NAV is probably now something like 90p+ and as it stands our lease income and rental income remains a decent amount higher than our finance costs and together with a large chunk of net cash enables a chunky forward dividend yield as there is zero appetite as far as i can tell in buying more planes. So milk the asset and gradually run the portfolio down IMO. Been held tightly in my SIPP since the dark days of last summer when Thai was largely grounded and bankrupt.

[my retirement fund] 02/3/2023 16:15

Do you guys actually have any idea what this company is and what it's issued equity represents?

[nicholasblake] 02/3/2023 15:58

Is the debt traded?

[my retirement fund] 02/3/2023 14:02

I think the debt is extremely undervalued, I think it's simply a case of a loan book disconnect. Baring another pandemic I can't really see a reason to worry.

[mrscruff] 02/3/2023 11:52

I too have just bought back the shares I gave up (7,371 shares). I have not had a chance to do my full DD as I do want to focus on the debt and spend time looking into it. But seeing everyone buy back the shares has given me FOMO and what with everyone adding ahead of 14th you lot (and institutions) could drive the share price up!

Any member here have a view on debt? (Edit: Perhaps this request is a bit cheeky - I had a really busy week at work and a really nice day outside. I will look into this myself over the weekend)

[my retirement fund] 02/3/2023 11:51

Well I've added too.

[2wild] 02/3/2023 09:10

Gary1966 that's a great price. I've added this morning at 45.9p yielding 15.2% after costs. Suspect these will be about 50p by XD day next month.

[casholaa] 01/3/2023 19:50

Had a bit of success with ipf today, so I am pleased too.

[gary1966] 01/3/2023 19:43

My order filled at the end of the day and slightly cheaper than my limit, at 45.60p, and so I am a happy chappy. Just under 8500 shares to go to restore my position but need some money first.🤣€512;😂

[casholaa] 01/3/2023 19:06

Sorry for any confusion guys. I had to go to work today, just got in. I meant that ii put a corporate action notice/document in my account to tell me that the compulsory purchase, from memory, would be about 12.5% etc

[gary1966] 01/3/2023 15:33

Bought back the compulsory purchase ones in my children's ISA's as well as increasing their holdings. Have an order in to buy just over 2/3rds of the ones I lost as a result of the purchase but the market doesn't want to sell them to me.:-(

[skyship] 01/3/2023 15:05

On offer at 46p - a 15.2% yield.