Avation Share Discussion Threads

[roguetraderuk] 24/10/2024 10:32

boeing troubles and supply chain in planes means whatever is still flying has more value. once the boeing sit with the strike calms down this might too.

[albert arthur] 24/10/2024 10:17

Put some info about AVAP in this Tweet. It's flagged on my LSTM AI algo... purely technical. All signal suggests it going up much further.. with that and the NAV being over 260. Looks positive.. we shall see. https://x.com/albert__arthur/status/1849385936187953156?s=46

[wsm812] 24/10/2024 09:36

I hope you are correct bdbd11, some further buying pressure today!

[bdbd11] 21/10/2024 12:35

I still think there is more to this rise than the normal course of buying an under valued asset. Let's not forget that pre covid the company/assets were 'up for sale' with 3rd parties interested. That took the share price over £3. If buyers are sniffing again, we should get nicely above £2 this time quite quickly.

[wsm812] 21/10/2024 11:40

Still soaring, This stock seams to leap-up in big bounds on any good news. I'm sure the NAV gap will close even more before long.

[sophia1982] 16/10/2024 22:23

NAV per share is still £2.79, probably even more after recent newsflow. Trades at 40% discount.

[bdbd11] 16/10/2024 16:01

although today's announcement was welcome, it really was little other than expected and in the normal course of business. Indeed, though avap is due a re-rating and still remains under valued, you would normally expect a gentle rise in price over time. The sudden spike smacks of something else. Something us little people can only speculate on.

[geniechem] 11/10/2024 15:33

Why the surge in price, what have I missed?

[wsm812] 27/9/2024 09:27

This should give further stimulus to the current upward trend channel we are in.

[argylerich] 27/9/2024 09:22

From the ADVFN newsletter:
"Analysts at Canaccord Genuity lowered their target price on commercial passenger aircraft leasing business Avation from 280.0p to 255.0p on Thursday, a more than 50% net asset value discount despite upward pressure on fleet and order book values.

Canaccord Genuity said that Avation had exited FY24 with a fleet of 34 aircraft and revenues of $92.4m, while net debt was reduced to $651.5m and NAV per share came in at $3.62.

The Canadian bank thinks FY25 sees further scope for improvement before moving to fleet growth in FY26 and increased focus long-term on a lower-CO2 ATR, A220 and A320NEO fleet and noted that FY24 demonstrated strong control in administrative costs, an improved balance sheet from reduced and reducing net debt, and improving risk/reward for equity.

"We think Avation continues to benefit from exposure to structural aviation growth and lessors gaining an increasing share of airline fleets," said Canaccord, which reiterated its 'buy' rating on the stock.

"We see >7% EBITDA 2024-30E CAGR, expanding NAV (which lags fleet growth), and equity expansion in the EV. Approaching 2026, we see potential catalysts including: eight leases due for renewal in FY26 could offer scope for rental rate improvement; and, new capital is due as the October 2026 bond matures. As USD interest rates potentially reduce and leasing risk reduces, we believe this could potentially deliver further risk/reward improvement for the shares.""

[bdbd11] 26/9/2024 12:55

If you missed it, it's worth playing back the results presentation on investormeetcompany.com (its free). The main concern for shareholders seems to be the bond which matures in 2 years or so. I felt this was very adequately dealt with. As well as continuing to buy back the bonds (at below par historically) they appear very confident in being able to replace this debt and likely at a much keener rate.

[cb7] 26/9/2024 09:05

There was a huge 46.9m gain in the value of ATR purchase rights. Strip that out and the underlying business of leasing aircraft makes little to no profit! So if they do purchase these aircraft and lease them out, making little profit, what returns will shareholders receive? If the company is to be valued on its supposed nav, like a property company, then they need to trade those assets. The sale of two a/c for october and early 2025 delivery is a positive step, generating 10m profit, but surely the way forward is to sell more of those future orders.
I said supposed nav, because whenever they have sold an a/c in recent years, it has been below book value, (2.9m loss this year and 1m in 23). This gives me little confidence that their depreciation is sufficient and therefore questions their aircraft valuation.

[fishbournetrader] 26/9/2024 08:51

At the moment it is a case of buy one (small fraction of an) aeroplane, get one (small fraction) free.
And planes seem a very good asset at the moment with strong demand reported globally.
I would not be surprised if there was another take over bid here.

[wsm812] 26/9/2024 08:15

I agree, the results are very reassuring and present a growing NAV, EBITDA and more fleet in the coming year. Not sure what teh market wants, but for me I and happy to continue holding and await the rerate when sentiment catches up with teh position reported.

[bdbd11] 26/9/2024 07:48

Great results. NAV up. profits up, debt reduced. Yet the share price languishes at a 50% discount to nav.

[carcosa] 30/8/2024 09:03

Lemon Fool website is down so I'll post here instead.

Bonds trading 85% higher than at start of year. However got to remember there is practically no trading going on because its an exceptionally thin market so pricing is a bit of a misnomer. There are huge price swings when a trade is made. Best indicator is when Avation buys them back ~85% face value.

There are few Avation aircraft of finance leases but clearly when an aircraft is on a finance lease the expectation is that those aircraft are going to be sold at some point in the future. Hence very much part of normal aircraft leasing business.

In this case the aircraft are sold at book value as opposed to market value. Therefore the proceeds may seem small but because its on a finance lease the interest received is much higher over the term of the lease. As per my own calcs:

-$19,680,500 Aquisition Cost
$15,317,989 Book Value
$14,878,458 Rental Income*
-$6,022,233 Loan Interest
$4,493,714 Profit to Avation

*Rental income based on being a finance lease arrangement as opposed to an operating lease.

The two aircraft are OY-RUN (MSN1519) and OY-RUV (MSN1527) with a NBV of around $15m each but generated net cash proceeds, after repayment of associated bank loans, of about $5m each.

What is interesting is that for the airline point of view the they are getting a $17m current value aircraft for $15m with a reduced cash outflow of $2.4m/annum. Keep it for another 5 years then that's roughly $10m saved and aircraft potential sale price of $11m. In other words its a good deal for DAT and they have an asset upon which they can use as loan collateral.

Will update as usual on The LemonFool when/if that site gets back online.

Also, ATR Celebrates Milestone 1700th delivery

[harrogate] 30/8/2024 07:21

But part of the value story here is that the fleet is in the books at below market value as aircraft values have bounced back sharply. Out of interest do you know what those bonds are trading at at the moment ? Thanks

[catsick] 30/8/2024 07:05

Well if they sell the entire fleet off at book value then they will have 250p per share plus left in cash .... Also using this cash to buy back their loan notes at 12.5% ytm is a great use of funds

[harrogate] 30/8/2024 06:51

I know this is trumpeted as in line with strategy but hard to see how reducing the fleet and making no gain on a sale is a step forward. We need some sort of deal announcement that shows how they are going to utilise those ATR purchase rights. Without that we will be stuck here I think for some time. Thought we would have kicked on by now so disappointed

[wsm812] 07/8/2024 14:35

Hopefully it's the start of the next leg up!

[bdbd11] 07/8/2024 14:13

Something happening here?

[faz147] 25/7/2024 11:20

Really positive news, after the sale of 2 aircraft recently.

AVAP is massively undervalued now, with the company itself saying Profitability for the year will be "significantly ahead of expectations"!

I hold a lot of AVAP now in my ISA and my SIPP, despite taking some profit at 147p recently, and I've also just opened a long today on SpreadEx, to ensure maximum exposure to the expected upside.

Spread has been opened by dropping the bid after the positive open, so it looks like stop-losses are being targeted before the next leg up.

I wouldn't be surprised if they announced a special dividend and paid off some more of their more expensive debt in the coming weeks/months, so keep this on your watch list as a minimum!

[muckshifter] 25/7/2024 10:27

Pleasing news today. A new start up customer in a new country, where presumably they will need a few more aircraft as their launch approaches.

[cf456] 03/6/2024 12:38

You're welcome WsM812.

[wsm812] 03/6/2024 12:25

Nice link, thanks @cf456