Avation Share Discussion Threads

[harrogate] 19/12/2018 08:00

Agreed. They seem to have worked out the strategy for the next stage of growth here and are juggling the credit rating, customer concentration, and funding needs very well. As you say they have come a long way and it has been a great investment. As happens from time to time I think we are little behind where the price should be given the progress in the last 12 months. Further news in coming months I am sure

[quepassa] 18/12/2018 10:32

It would be interesting to know how exactly much Avation/Air Baltic are paying for the new A220-300 aircraft.

Either way, four modern, desirable and highly fuel-efficient mainstream jet aircraft are being added to the Avation fleet.

This is excellent news and another major step for Avation who have rapidly evolved from their early days of supplying specialist turbo-props to the Australia outback market into leasing brand-new 150-seater jet aircraft to major mainstream European carriers like EasyJet and Air Baltic.

An astonishing growth story.


ALL IMO. DYOR.
QP

[catsick] 18/12/2018 09:48

Thats the list price, the early ones have had massive discounts on them , I am sure baltic signed up for them sub 40 and avap are trying to repeat the nav boosting canny buying ....

[buffetteer] 18/12/2018 07:48

They cost $91.6m each lost price !

[catsick] 18/12/2018 07:30

Looks like another 150m usd ish on these new 220s added to the fleet, 12 year leases on new planes

[quepassa] 18/12/2018 07:22

That's a fine new contract for Avation with repeat business from burgeoning Air Baltic , the highly regarded regional airline based in Riga, Latvia which is 80% owned by the Latvian state.

Four brand-new A220-300's is a very credible contract for Avation whose reputation and market penetration continues to increase steadily and to impress markedly.

ALL IMO. DYOR.
QP

[quepassa] 11/12/2018 07:33

Thank you, Soesgoesit.

Positive article.

[catsick] 11/12/2018 00:28

Yes looking good and the fact all the assets are usd makes it a brexit safe haven too ....

[sogoesit] 10/12/2018 15:18

Here ex Simon Thompson of IC:

“The directors of aircraft leasing company Avation (AVAP:256p) have delivered yet more good news to shareholders at its annual meeting as I had anticipated they would a couple of months ago ('Poised for take-off', 8 Oct 2018).


The board is guiding investors to expect a 39 per cent increase in aircraft lease rental values in the six months to the end of December 2018, an outcome that will deliver a record half-year profit and a run rate in line with Canaccord Genuity’s full-year revenue forecast of $119m (£93m). The update is supportive of expectations that Avation can lift full-year underlying pre-tax profit from $18.9m to $23.8m and deliver EPS of 35¢ (27.5p) for the 12 months to the the end of June 2019. The board has declared a first half-year dividend a share of 2¢, underpinning analysts’ full-year expectations of an 8¢ (6.2p) payout.

The directors have also revealed the extent to which the fleet is undervalued. The conditional disposal of one of Avation’s eight Airbus A321-200 aircraft to an Asian buyer has been agreed at a price that will exceed its book value of $48.7m (£37.5m) by “more than 10 per cent”, a significant sum in relation to the profits expected from the company’s leasing activities. They also flagged up that narrow-body aircraft now comprise “half of the $1bn fleet value”, the clear implication being that Avation’s last reported net asset value (NAV) of $231m (£180m), or 280p a share at current exchange rates, is far too conservative. Please note that I have adjusted the last reported NAV to take into account the exercise of share options post the June 2018 financial year-end.

Furthermore, after accounting for the delivery of two ATR72-600 aircraft by the end of this month, the company still retains options and purchase rights over 25 of these aircraft for delivery up to December 2023, all of which are held in the account at nil cost. To put the value of these aircraft options into perspective, Canaccord has a target price of 335p, representing a 20 per cent premium to Avation’s last reported NAV, which is "justified by the company’s attractive growth prospects and [the premium] largely underwritten by the value of its ATR options".

In other words, the 25 ATR-72 aircraft options could easily be worth $45m (£35m) on the open market, a significant sum in relation to Avation’s market capitalisation of £164m. Add to that a potential $50m (£39m) plus undervaluation of the narrow-bodied fleet and there is potentially $95m of hidden value not embedded in Avation’s reported NAV of $231m. Furthermore, my financial models suggest that Avation could boost its reported NAV to $257m, or 399¢ (312p) a share, by June 2019 after taking into account only the realised $5m-plus profit on the aforementioned Airbus A321-200 aircraft sale and retained profits in the 12-month trading period. However, mark Avation’s fleet of 41 aircraft to their open market value, and factor in a realistic valuation of the 25 ATR-72 options, which have increasing scarcity value – ATR only manufactures 85 planes a year and demand from China, India and Iran is tightening the market – and the company’s break-up value is realistically far closer to 400p a share.

Trading on a forward PE ratio of nine, offering a 2.4 per cent prospective dividend yield, and with substantial hidden value in the accounts, I continue to see value in Avation's shares, which have posted a total return of 72 per cent since I first advised buying at 159p ('Get on board for blue-sky gains', 11 Sep 2014). Strong buy.”

[quepassa] 10/12/2018 14:38

Paywall article.
Would you be kind enough to summarise.

Thanks.

QP

[ayl30] 10/12/2018 13:49

Positive comment from board today results in tick up n price

[quepassa] 15/11/2018 07:39

RECORD HALF YEAR:-

"The Company's business continues to perform satisfactorily and Avation is expected to report a record half-year profit for the six months ended 31 December 2018 that significantly exceeds the result for the comparable half-year period ended 31 December 2017. This is attributable to increased lease revenue from our fleet and a trading gain on the sale of a narrow-body aircraft."

SIGNIFICANTLY EXCEEDS prior comparable quarter.


They have BIG HIDDEN VALUE in their balance-sheet as several aircraft have a lower book value than they are currently worth on the open market.

Lease rental income UP by an astonishing 39%


Strong Trading Update.


ALL IMO. DYOR.
QP

[catsick] 15/11/2018 07:37

So sounds like business is doing well we make a one off 5m usd on this sale and there is another 35+ in unrealized gains waiting to be realized which is about 20pct of market cap, of these numbers we should be up a 300 in no time

[harrogate] 15/11/2018 07:32

No worries. That sounds a positive position for us and certainly underpins current price I would think.

[ayl30] 15/11/2018 07:26

Thanks, punctuation was never my strong point! Theirs neither it seems

[harrogate] 15/11/2018 07:17

You have missed the meaning. Put a comma after operations and you are sorted

[ayl30] 15/11/2018 07:09

AVAP rns today starts with "The purpose of this statement is to provide investors with an update on current operations and concerns the half-year financial period commencing 1 July 2018." It then goes on to be positive with no 'concerns' - what have I missed?

[quepassa] 01/11/2018 14:41

Thanks.

Great interview.

Very bullish.

Mentions a great first half and hints strongly at hidden value in balance sheet.

[gold panda] 01/11/2018 14:11

Interview with Wolanski

[gold panda] 23/10/2018 08:33

Thanks, I've read it already :) Helped me choose in which companies to invest

[carcosa] 21/10/2018 09:31

gp, OTOH Avatin has twice the dividend growth ;-)

Here is a year+ old document detailing numerous aircraft leasing companies:

hxxps://www.aviaam.com/upload/Leasing-Top-50-2017.pdf

For a quick comparison search/find "Avation" to see how they compared to the competition within the various charts.

The lack of comparative investor related research and other aircraft leasing companies listed on the LSE may prevent investors realising just how small Avation is in the industry; Something that has both its pros and cons.

The 'take-away for me is that Avation are obtaining average to good returns without having to take enormous financial risks. However cost of debt is high for Aircastle, Avation, FLY and AWAS. I can readily understand why that is so for Avation given its size but perhaps that unsecured debt burden for Aircastle is worthy of more research if anyone was to consider investing in them.

Overall each company has to be taken on its merits, fleet size, maturity, credit rating, markets, backers (e.g. China!) etc. With few exceptions those listed on various stock exchanges are all worthy of consideration... provided they remember what happened to Guinness Peat Aviation...

[gold panda] 21/10/2018 07:05

Well, one of the reasons is that Aircastle have the largest dividend yield in the industry - 5.49% at the moment

[carcosa] 20/10/2018 07:38

If, on the other hand you value NTAV growth then Avation beats Aircastle (and practically all other aircraft leasing companies) on that metric. Accordingly the argument would be Avation should be trading well above book value.



This difference in market cap is: Avation $215m v AirCastle $1594m