Avation Share Discussion Threads

[dontsweatit] 09/5/2015 20:00

still holding but if chart not go positive then i will be selling my large holding it seem most compnaies who attended mello in derby not perform as they say

[davydoo] 05/5/2015 16:34

Am I just being a pendant to be annoyed that the pic chosen is a flybe jet aircraft and not any of Avation's own fleet?

I guess it beats a previous Telegraph Quester tip that got completely the wrong SkyWest.

[harrogate] 05/5/2015 15:32

Not much new there really. Is it just me or does the Company talk about new planes in larger numbers than actually arrive? Been a slow down in new leases I think and the ARAN deal looks quite a bit behind the original schedule. That is why they are missing the original EPS number for 2015.

[davydoo] 29/4/2015 09:21

When I was really into this 4 or 5 years ago I remember the two largest aircraft leasing co's; Gecas part of GE, and ILFC part of AIG, were able to trade and more importantly borrow off their parent's AAA rating.

BBB is a start, and I think you're right Harrogate, it is an initiation, and without a parent co in the wings, what else can you reasonably initiate at other than BBB?

[davydoo] 29/4/2015 07:38

Junk bonds and rusting Fokkers, so glad I reinvested ;)

[harrogate] 29/4/2015 07:35

I don't remember a previous rating so I think this is an initiation of coverage by the ratings agency. I don't know much about this stuff but a quick look on google suggest that BBB- is the lowest level of investment grade and so is good news in terms of cost of funding and I would think also willingness of funders to lend. Positive watch is also a good thing with the agency expecting the rating to improve. Wouldn't expect it will have an impact on the price.

[macarre] 29/4/2015 07:09

Avation PLC (LSE: AVAP) ("Avation" or the "Company"), the commercial passenger aircraft leasing company, announces that, US rating agency Egan-Jones Ratings Co, subject to various qualifications, has assigned a rating of "BBB-" to the Company with a positive watch.

Does anybody know what AVAP's previous rating was (if any)?

[davydoo] 28/4/2015 13:29

I haven't held any for 12 months but bought back in yesterday and today.

I didn't see any of the recent investor presentations, the decision is based on my existing understanding. Not sure if the lack of a PI boost (as we have seen on previous presentations) is a good or bad thing though.

I am most impressed by the recent 20% reduction in average debt funding, to me that's the equivalent of adding 18m fleet growth but with less risk.

[wilk1] 28/4/2015 11:55

Pe of 5 for next year.....dirt cheap, maintain my target of 220p

[daveb12] 28/4/2015 11:26

Good article after recent interview with FD at proactive investors on how the numbers work and potential for future -


It is interesting that even after the sharp rise in the share price in the past two years, the stock is valued at just 6-7 times earnings, where its rivals are valued at 12-15 times.
Avation also trades at a discount to net asset value,where its American quoted peers are usually valued at closer to 1.5 times NAV.
So, whichever way you cut it, there is potential for growth either organically, as Avation adds to its portfolio, or via a stock re-rating.
The broker WH Ireland is predicting revenues of US$58mln this year, rising to US$70.5mln next year and then to US$88.7mln in 2017, giving pre-tax profits of US$17.1mln, US$23.6mln and US$31.2mln respectively.
Domiciled in Singapore, its results will benefit for the next five years from the 10% tax rate paid by certain foreign businesses that locate in the city state.
The broker reckons the stock, currently changing hands for 140p each, is worth 206p.
Wolanski said: “That’s what’s exciting about the company; we have locked in so much future growth and almost eliminated all of the execution risk associated with that growth.”

[russman] 27/4/2015 21:13

Not sure how the current AVAP business model includes CLA (92%) anymore. Is it a tax break? How far can you gear up a £20m CLA. Would you issue equity @ a discount. Tricky.

[davydoo] 27/4/2015 13:21

for the record, I made a lot of gains buying AVAP when CLA was priced high, but 'lost' (by missing out on further Avation gains) a lot by buying CLA when it seemed cheap compared to AVAP.

[davydoo] 27/4/2015 13:17

In my opinion...

CLA never worked as planned, because it was priced too high, great initially for AVAP, they banked huge amount of cash for shares in CLA, but CLA never got used as intended, and then when bigger deals came along e.g. Virgin, Avation understandably did the deal in 100% owned AVAP not 51% owned CLA. Over time CLA price fell well below issue price, but as it was receiving regular revenues, so it made sense for AVAP to buy back and boost its own EPS. What else are minority holders to do? than sell out to AVAP a business that isn't growing.

Would appreciate thoughts of other long term holders

[extrader] 27/4/2015 11:53

Hi Davydoo,

Thanks for that bit of background. Makes you (well, me, of course !)wonder why they're dealing with CLA as they are ?

ATB

[davydoo] 27/4/2015 11:27

They've been talking about wanting to do this for ages, not sure why the RNS.

Extrader setting up separate ring fenced operations was always the original business plan, Capital Lease Aviation being the first one to have other investors.

[puku] 27/4/2015 11:04

Harrogate - I chatted to them at the recent seminar. They have leased 4 planes to Flybe and 2 to Cooks, so a strong move into the European market, along with new leases to Fiji and UNI Airlines.. Until Apr 2014 they were reliant almost totally on Virgin Australia. AVAP has 29 planes now, 12 more for delivery by end of 2016, and options for 22 more beyond that. Perhaps the new proposal will stabilise their funding requirements. WH Ireland have published a note on 10 April 2015, worth a look = forecasts P/E's of 7.4, 5.3, and 4.0 for 2015-17. I have an average of 80 p and intend to buy more once the share price has stabilised.

[extrader] 27/4/2015 09:56

Hi all,

Looks as though they're planning to leverage their expertise and market connections and set up ring-fenced lease finance operations, like DNA1,2 or 3 or DPA (hat-tip to Valhamos).

ATB

[harrogate] 27/4/2015 07:31

Not sure quite what it means - they seem to be signalling a change from the equity/debt funding model they have had since inception to one that us all debt - some it now to be loan notes that we can apply for. There is no suggestion here what the terms are and this will be decided at the time of the offer of any tranche of this. Not sure what the P&L impact will be - since more interest cost offset by less dilution through new shares. Maybe more flexible and faster and as said above maybe signals things are going to happen but that is just a guess. The key issue for me is the seeming slowdown in new planes for YE June 15 and need to gain a better understanding of the expectations for the next 12 months until the TC jets come in and really change the numbers.

[jamesjoel] 27/4/2015 07:13

Cheers QS99

[qs99] 27/4/2015 07:11

IMO looks like they want to finance at latest interest rates, and given size I presume (without looking at current debt) they have lots of opportunities they want to fund>???? Pretty chunky IMO

[jamesjoel] 27/4/2015 07:05

Can someone please explain this mornings RNS please ?

[russman] 17/4/2015 17:45

Did they sell the 'can for a profit?