Avation Share Discussion Threads

[davidosh] 30/5/2018 11:08

Just to mention that AVAP will have a stand and be presenting at our MelloSouth event in Hever,Kent on 14th June and all shareholders and potential investors are welcome to attend

Richard Wolanski for Avation has presented at our Mello events on a number of occasions before and the company are very popular with Mello investors with the share price having doubled plus dividends for early investors and those who attended Mello2014 where Richard presented. We are very pleased to welcome him back as he unfortunately could not make it to Mello2018 last month in Derby so this is an ideal opportunity to meet the management and hear about their strategy.

Do come and join us at this quality event and there will be at least 25 other companies to meet plus some fabulous keynote speakers and a large number of fund managers presenting and on panel sessions.

[harrogate] 04/5/2018 09:12

Thanks Carcosa - the point on the EBIT is a fair one. I was not really expecting anything pre year end now but you can always hope!

[carcosa] 04/5/2018 08:32

Plus redeeming the notes which are/were trading above par.
So that's a 'saving of $1.5m per annum plus access to marginally cheaper funding.
Other than the ATR's there will be no new aircraft in H1 due to the EBIT interest cover being so high that would damage corporate credit rating. So need to accrue income from the widebodies first IMO

[harrogate] 04/5/2018 08:06

They using the $150m to redeem $150m of our debt - paying 6.5% instead of 7.5% so a saving of $1.5m a year and pushing out the redemption date by a year to 2021 - so no extra funds but looks great business to me and the improved credit rating is kicking in which augurs well for the future costs of funds. They seem to be doing everything they said they would do and I think we need some news re new aircraft to get the price moving again. No reason to sell I can see

[catsick] 04/5/2018 07:59

Seems to be all decent news , lowering the funding cost in a higher rate environment and increasing the size of the bond issue should mean plenty more planes on the books, I am guessing this takes a while to spend and we again have to bear the excess interest cost before the money is fully spent, although much less of an impact now as 2/3 of it is replacing existing debt at lower costs

[thewheeliedealer] 23/3/2018 23:39

Hi all,

I went to Master Investor and had a long Chat with Richard Wolanski - some interesting stuff came out and I wrote it up in a Blog which I wrote back on 18th March 2018 - you should be able to find it very easily here. I hope it is useful,

cheers, WD

[michaelmcandrew] 20/3/2018 20:36

Brilliant - what is the point of a link that is only accessible to ShareSoc members!

[sharesoc] 20/3/2018 18:51

The presentation and stockopedia report for Avation who presented at our London seminar last week can be found here:

[russman] 12/2/2018 15:29

How many faulty Pratt & Whitney engines.

[harrogate] 17/1/2018 09:46

Hi. Thanks for the thoughts as always

[carcosa] 17/1/2018 09:36

Hi harrogate,

I very much doubt that. Mandarin Airlines is a subsidiary of China Airlines and hence a major carrier. Very savvy/drive a hard bargain etc. What has happened is that Avation have had to sweeten the deal.. or 'add value'. If you read between the lines of the RNS, I reckon that ATR have provided the pilot training/aircrew and Avation have paid for it. In the grand scheme of things it is a minor cost over the lease term.

The good news is that Mandarin should have got the aircraft at a much lower than average price compared to most of the ATR fleet. Financially the airline will have a very good credit rating (I expect) which may have allowed the financing cost to be a little lower, more than enough to defray the pilot training costs. Although the revenues (based on the acquisition cost) will be a bit lower, what it also means is that it will give Avation the opportunity to review the market value of these aircraft and end up with a NAV above purchase price which will be supportive to the share price.

[harrogate] 17/1/2018 09:17

Surely they will be charging for the training etc to Mandarin and make a profit?

[carcosa] 17/1/2018 08:50

I wish I could! It was a bit of a throw-away remark. It should have have no effect on revenue. Costs/liability will have increased a tad maybe $0.5-1.0m??

It's just my personal H1 revenue forecast is a tad above what Avation have indicated it will be. But with two wide-bodied aircraft in the fleet a difference of just a few days in revenue collection may explain it; or the Air Berlin re-leased aircraft may be on slightly cheaper rates than previously (I noticed the release of potential maintenance reserves never happened with that aircraft either).

[harrogate] 17/1/2018 07:37

Hi Carcosa - can you explain what you mean on HI revenue? Thanks

[carcosa] 17/1/2018 06:32

cs, Not quite right. These three were already delivered to the airline by the end of last year. This latest RNS is just some PR waffle and has no bearing on lease financials.

Quite interesting that AVAP provided pilot type rating instructors and examiners and certain training credits to Mandarin. That's usually provided by the airframe manufacturer (and probably explains why H1 revenue will be below my personal forecast!)

[catsick] 17/1/2018 01:33

So 3 more atr are going out to Mandarin who are also buying 6 more direct from ATR, guessing the order book and options with atr still has good value to it...

[harrogate] 21/12/2017 07:39

I think there should be 2 further aircraft deliveries before the end of the year as well - 3rd ATR and the second wide body

[harrogate] 21/12/2017 07:30

Given that they spend a lot of time raising cash through various loan note offers and struggled to get one of them away recently and seem to pay 7% + on these I still don't see the point in buybacks = why not use the free cash to fund more aircraft and grow the company and let the share price look after itself?
They have done a brilliant job and I have not sold a share in these for years as I see great potential.

[catsick] 20/12/2017 23:09

I think the thing jeff is alluding to is that now they have reached what was perceived to be the critical mass of 1bn usd of assets they dont have to reinvest everything in building up the size of the book, hence they have scope to increase dive or buyback shares if the discount widens, I think this will floor the shares at 2 pounds as that is the point where the discount is 20 pct, the company generate over 5m usd of free cash a month so can easily absorb pretty much all of the flow of shares in the market, with a chunk of the excess cash held now having gone into recent new purchases profitability must also have ratcheted higher and is pretty much locked in for the 8 year lease life ....

[harrogate] 20/12/2017 15:55

Given they have debt I can't see the logic of messing about buying a few shares to make a point. maybe if it is so cheap the directors could buy. That would be better than a few 000 shares bought up

[sogoesit] 20/12/2017 15:48

Yep, that’s the technique.

[harrogate] 20/12/2017 15:22

share buybacks I would have thought?

[modj2] 20/12/2017 15:20

So what does Jeff mean when he says that "The Board observes that Avation's ordinary shares are presently trading at a discount to the net asset value. The Company will endeavour to narrow this discount by utilising capital management techniques when conditions permit."

[roman2325] 20/12/2017 14:54

Added more today