RNS Number : 6628F
Avation PLC
26 September 2024
 

AVATION PLC

("Avation" or "the Company")

 

UNAUDITED Results for YEAR ended 30 JUNE 2024

Avation PLC (LSE: AVAP), the commercial passenger aircraft leasing company, announces unaudited results for the year ended 30 June 2024.   

 

Financial Highlights

 

·    Revenue for the year was $92.4 million (2023: $92.7 million);

·    Net asset value per share increased by 5.2% to $3.62 (2023: $3.44);

·    Fleet assets were $832.8 million (2023: $898.6 million) and total assets were $1,142.3 million (2023: $1,179.6 million);

·    Net indebtedness reduced by 10.9% to $651.5 million (2023: $731.2 million);

·    Total cash and bank balances were $117.9 million (2023: $116.9 million);

·    Operating profit of $83.2 million (2023: $71.5 million);

·    Profit after tax was $19.7 million (2023: $12.9 million); and

·    Earnings per share were 27.9 cents (2023: 18.5 cents);

 

Operational Activity

 

·    The Company placed an order for ten ATR 72-600 aircraft for delivery between the fourth quarter of 2025 and the second quarter of 2028;

·    An ATR 72-500 and an ATR 72-600 aircraft were sold during the year;

·    In December 2023 the Company successfully transitioned an Airbus A320-200 aircraft to a new lessee;

·    A previously off lease ATR 72-600 aircraft started a lease with a new airline customer in Papua New Guinea in April 2024;

·    Two Airbus A320-200 aircraft, two ATR 72-600 aircraft and an ATR 72-500 aircraft were re-financed with fixed rate long-term loans;

·    The Company entered into an agreement to sell two ATR 72-600 aircraft on delivery from the manufacturer scheduled for October 2024 and March 2025; and

·    Subsequent to the year-end a lessee exercised purchase options and acquired two ATR 72-600 aircraft from the Company.

 

 

Comparative amounts for the year ended 30 June 2023 presented in this results announcement have been restated as explained below under "Change in accounting policy for maintenance reserves".

 

 

Executive Chairman, Jeff Chatfield, said:

"During the year ended 30 June 2024 Avation achieved 100% fleet utilisation for the first time since early 2020. Full utilisation was achieved by arranging a new lease for one aircraft and selling the other remaining off-lease aircraft.  Avation's next lease expiry is due in March 2025 and is for an ATR 72-600 aircraft.  There are no further scheduled lease expiries in the 2025 financial year.

Avation has continued to reduced debt and de-lever its balance sheet, achieving a reduction to 57.0% in the ratio of net debt to total assets as at 30 June 2024.  A significant portion of the cashflow generated by the fleet is directed towards repayments of debt.  Scheduled loan repayments for the 2025 financial year, amount to around US$49.7 million, which exceeds expected depreciation of the fleet over the same period.  The Company is hedged against further interest rate changes on 96.4% of its loans and borrowings.

Avation repurchased US$18.0 million Avation Capital S.A. 8.25% October 2026 unsecured notes during the year.  Following these repurchases there are US$331.6 million notes outstanding. The Company may pursue additional repurchases or liability management exercises from time to time with the aim of further reducing the outstanding amount of unsecured debt in issue. 

Avation plans to grow its business in a prudent and strategic manner. To that end the Company has placed an order for ten new ATR 72-600 aircraft to be delivered gradually over the period from Q4 2025 to Q2 2028.  Avation's management believe that the contract price for this order is favourable compared to forward valuations for the aircraft type. The order was placed by exercising ten of the Company's purchase rights for new ATR aircraft. On placement of the order Avation was granted an additional six purchase rights and the expiry date for all purchase rights was extended to 2034.  Avation now holds 24 purchase rights for new ATR 72 aircraft. All of the ordered aircraft will be equipped with the new PW127-XT engine variant, which the manufacturer expects will be approved for use with sustainable aviation fuel in 2025.   ATR is the world's number one regional aircraft manufacturer and offers the lowest-emissions regional aircraft.

In order to partially fund the predelivery payments due for the ten aircraft order, the Company has agreed to sell two ATR 72-600 aircraft which were ordered previously and are scheduled to be delivered by the manufacturer in October 2024 and March 2025.  The sale of these two aircraft is expected to release around US$10 million.

We are confident that the Company will be able to place the new aircraft ordered for delivery between 2025 and 2028."

Financial Summary

Comparative amounts as at and for the year ended 30 June 2023 have been restated for a change in accounting policy for maintenance reserves. 

US$ '000s

Year ended 30 June,

 

2024

2023

Revenue

92,397

92,691

Other income

3,575

7,389


95,972

100,080

Operating profit

83,218

71,463

Profit before tax

30,046

13,830

Profit after tax

19,735

12,944

EPS (basic)

27.85c

18.50c

 

 

 

 

 

 

US$ '000s

30 June,

 

2024

2023

Fleet assets (1)

832,818

898,616

Total assets

1,142,321

1,179,596

Total cash and bank balances (2)

117,940

116,905

Cash and cash equivalents

23,561

24,816




Net asset value per share (US$) (3)

US$3.62

US$3.44

Net asset value per share (GBP) (4)

£2.85

£2.71

 

1.   Fleet assets are defined as property, plant and equipment plus assets held for sale plus finance lease receivables.

2.   Total cash and bank balances as at 30 June 2024 comprise cash and cash equivalents of US$23.6 million (30 June 2023: US$24.8 million), investment in fixed deposits of US$nil (2023: US$1.2 million) and restricted cash balances of US$94.4 million (30 June 2023: US$90.9 million).

3.   Net asset value per share is total equity divided by the total number of shares in issue, excluding treasury shares.

4.   Based on GBP:USD exchange rate as at 30 June 2024 of 1.27 (30 June 2023:1.27).

Aircraft Fleet

Aircraft Type

ATR 72-600

15

16

ATR 72-500

4

5

Airbus A220-300

5

5

Airbus A320-200

2

2

Airbus A321-200

6

6

Airbus A330-300

1

1

Boeing 777-300ER

1

1

Total

34

36

At 30 June 2024, Avation's fleet comprised 34 aircraft, including five aircraft on finance lease. Avation serves 16 customers in 14 countries. The weighted average age of the fleet is 7.3 years (30 June 2023: 6.4 years) and the weighted average remaining lease term is 4.1 years (30 June 2023: 5.0 years).

One ATR 72-500 and one ATR 72-600 aircraft were sold during the period. Turboprop and narrowbody aircraft make up 82% of fleet assets as at 30 June 2024. Fleet assets have decreased 7.3% to US$832.8 million (30 June 2023: US$898.6 million) as a result of aircraft sales and depreciation. As at the date of this report, Avation's fleet is fully utilised.  Subsequent to the year-end two ATR 72-600 aircraft were sold to the lessee pursuant to the exercise of purchase options.

Avation has orders for twelve new ATR 72-600 aircraft and purchase rights for a further 24 aircraft as at 30 June 2024. The first two ordered aircraft which are scheduled for delivery in October 2024 and March 2025 have been sold to a customer in the Caribbean. The order-book and purchase rights provide a pathway to future fleet growth.

 

 

 

 

 

 

 

 

 

 

 

 

Debt summary

 

US$ '000s

30 June,


2024

2023

Current loans and borrowings

49,668

61,401

Non-current loans and borrowings

625,426

694,575

Total loans and borrowings

675,094

755,976

Cash and cash equivalents

23,561

24,816

Net indebtedness (1)

651,533

731,160

Net debt to total assets (2)

57.0%

62.0%

Weighted average cost of secured debt (3)

4.8%

4.5%

Weighted average cost of total debt (4)

6.4%

6.1%

 

1.   Net indebtedness is defined as loans and borrowings less unrestricted cash and bank balances.

2.   Net debt to assets is defined as net indebtedness divided by total assets.

3.   Weighted average cost of secured debt is the weighted average interest rate for secured loans and borrowings at period end.

4.   Weighted average cost of total debt is the weighted average interest rate for total loans and borrowings at period end.

During the period net indebtedness was reduced by 10.9% to US$651.5 million (30 June 2023: US$731.2 million). Five aircraft were re-financed with long-term fixed rate debt in the year.

 

The weighted average cost of total debt has increased to 6.4% as at 30 June 2024 (30 June 2023: 6.1%) due to repayments of lower cost secured loans in the period. The weighted average cost of secured debt also increased to 4.8% at 30 June 2024 (30 June 2023: 4.5%).

At the end of the financial period, Avation's net debt to total assets ratio improved to 57.0% (30 June 2023: 62.0%).  As at 30 June 2024, 96.4% of total debt was at fixed or hedged interest rates (30 June 2023: 95.8%). The ratio of unsecured debt to total debt was 44.8% (30 June 2023: 40.1%).

 

Financial Analysis

Revenue

US$ '000s

Year ended 30 June,

 

2024

2023

Lease rental revenue

87,749

85,936

Less: amortisation of lease incentive assets

(2,721)

(1,368)


85,028

84,568

Interest income from finance leases

2,018

2,230

Maintenance reserves revenue

5,351

5,893

End of lease compensation revenue

-

-

 

92,397

92,691

 

Lease rental revenue increased by 2.1% to US$87.7 million in the year ended 30 June 2024 from US$85.9 million in the year ended 30 June 2023.  The increase was principally due to increased utilisation of the fleet in the year ended 30 June 2024.

Interest income from finance leases decreased by 9.5% from US$2.2 million in the year ended 30 June 2023 to US$2.0 million in the year ended 30 June 2024.  The decrease was principally due to the reduction in finance lease receivables resulting from principal repayments received during the year.

 

Other income

US$ '000s

Year ended 30 June,

 

2024

2023

Foreign currency exchange gain

807

3,154

Claim recovery

443

3,137

Fees for late payment

1,828

966

Deposit released

350

-

Others

147

132

 

3,575

7,389

 

Foreign currency exchange gains in the year ended 30 June 2023 arose principally from the release of deferred hedged foreign currency exchange gains on two Euro loans that were refinanced during the period.

Claim recoveries recognised in other income are the balance of distributions paid to creditors of Virgin Australia in excess of amounts allocated to trade receivables. 

Administrative expenses

US$ '000s

Year ended 30 June,

 

2024

2023

Staff costs

5,487

5,587

Other administrative expenses

3,305

3,173

 

8,792

8,760

 

Staff costs reduced by 1.8% from US$5.6 million in the year ended 30 June 2023 to US$5.5 million in the year ended 30 June 2024 principally due to lower charges for employee share warrants offsetting higher employee performance payments.

Other administrative expenses increased by 4.2% from US$3.2 million in the year ended 30 June 2023 to US$3.3 million in the year ended 30 June 2024 principally due to inflationary increases to audit and accounting costs and general office overheads.

Other operating income and expense items

US$ '000s

Year ended 30 June,

 

2024

2023

Depreciation

(37,251)

(38,566)

Gain on derecognition of a finance lease

-

2,792

Loss on disposal of aircraft and aircraft engine

(2,915)

(1,000)

Unrealised gain on aircraft purchase rights

46,886

20,540

Unrealised (loss)/gain on equity investment

(490)

7,520

Impairment (loss)/reversal of impairment loss on aircraft

(5,573)

3,287

Aircraft transition expenses

(2,607)

(11,389)

Reversal of/(provision for) expected credit losses

239

(659)

Legal and professional fees

(2,251)

(2,382)

 

Depreciation reduced by 3.4% from US$38.6 million to US$37.3 million due to a reduction in the fleet.

A gain of US$2.8 million was recognised in the year ended 30 June 2023 on derecognition of a finance lease for an aircraft repossessed from a defaulting airline in Myanmar.  The gain represents the positive difference between the outstanding value of the finance lease receivable and the broker valuation of the aircraft's market value at the date of termination of the lease.

Avation terminated a lease of an ATR 72-500 aircraft to an Indian airline in the year ended 30 June 2024.  The aircraft was repossessed from the airline and subsequently sold, generating a loss on sale of US$2.9 million.     

The Company's 24 aircraft purchase rights were revalued at 30 June 2024 using a Black-Scholes option pricing model.  The principal factors leading to the recognition of a gain of US$46.9 million (2023: US$ 20.5 million) were increases in the appraised value of the ATR 72-600 aircraft and an agreed extension of the expiry dates for the purchase rights to 2034.

The Company recorded an unrealised loss of US$0.5 million on its holding of shares in Philippine Airlines, Inc. (2023: gain of US$7.5 million).  The Company received these shares as part of the settlement awarded to creditors in the bankruptcy restructuring of the airline in December 2021.  

Aircraft transition expenses of US$2.6 million (2023: US$11.4 million) represent repairs and maintenance expenditure on aircraft repossessed following airline defaults resulting from the COVID-19 pandemic and expenditure incurred in the transition of an A320-200 aircraft during the year.  The Company expects transition expenses to remain low in future periods as all aircraft in the fleet are currently on lease.

The net reversal of expected credit losses of US$0.2 million (2023: US$0.7 million expense) primarily relate to reduced rent arrears and amounts due under a payment plan agreement loan granted to an airline in South-East Asia.  During the year ended 30 June 2024 the airline has reduced its total arrears and loan balance by US$19.0 million.

Legal and professional fees reduced by 5.5% from US$2.4 million in the year ended 30 June 203 to US$2.3 million in the year ended 30 June 2024 due to reduced transaction activity.

Finance income

US$ '000s

Year ended 30 June,

 

2024

2023

Interest income

6,009

3,129

Fair value gain on financial derivatives

-

1

Finance income from discounting non-current deposits to fair value

652

611

Gain on repurchase of unsecured notes

675

508

Gain on early full repayment of borrowings

2,507

1,657

 

9,843

5,906

 

Interest income increased in the year ended 30 June 2024 as excess cash was  transferred into term deposit accounts to take advantage of favourable deposit interest rates.

Interest income includes US$0.7 million (2023: US$1.2 million) interest on payment plan agreement loans granted to a customer.

Avation generated a gain of US$0.7 million (2023: US$0.5 million) on the repurchase of US$18.0 million of Avation Capital S.A. 8.25%/9.0% unsecured notes at a discount during the year.

Gains on early repayment of borrowings of US$2.5 million (2023: US$ 1.7 million) arose on termination of interest rate swaps when five aircraft loans were refinanced and three aircraft loans were repaid in full.  As at the date of this announcement the company has five unencumbered aircraft.

 

 

 

 

 

 

 

Finance expenses

US$ '000s

Year ended 30 June,

 

2024

2023

Interest expense on secured borrowings

20,047

21,170

Interest expense on unsecured notes

29,321

30,976

Interest expense on borrowings from related parties

-

271

Amortisation of loan transaction costs

1,571

1,057

Amortisation of IFRS 9 gain on debt modification

10,709

8,711

Fair value loss on financial derivatives

405

577

Amortisation of interest expense on non-current borrowings

635

571

Others

327

206

 

63,015

63,539

 

Interest expense on secured borrowings reduced by 5.3% to US$20.0 million in the year ended 30 June 2024 from US$21.2 million in the year ended 30 June 2023 as a result of net repayments of secured loans.  Secured borrowings have been paid down by US$79.7 million from US$452.5 million at 30 June 2023 to US$372.8 million at 30 June 2024.

Interest expense on unsecured notes includes US$4.3 million (2023: US$8.6 million) of non-cash interest paid in kind by increasing the face value of Avation Capital S.A. 8.25%/9.0% unsecured notes.

Amortisation of IFRS 9 gain on debt modification of US$10.7 million (2023: US$ 8.7 million) represents the non-cash accretion in the book value of Avation Capital S.A. 8.25%/9.0% unsecured notes resulting from the accounting treatment of the extension and changes to the terms of the notes agreed with noteholders in March 2021.  The extension was accounted for as a substantial modification of a debt instrument in accordance with IFRS 9.  The face value of Avation Capital S.A. 8.25%/9.0% unsecured notes outstanding as of 30 June 2024 is US$331.6 million.

 

Change in accounting policy for maintenance reserves

With effect from 1 July 2023, the Group changed its accounting policy for maintenance reserves.  Under the previous accounting policy, the Group recognised any surplus or shortfall identified in maintenance reserve liabilities for an aircraft as compared to the expected future reimbursement obligations to a lessee in profit or loss at the end of lease or on sale of an aircraft.

Under the new accounting policy, the Group will recognise maintenance reserves as revenue over the term of a lease, to the extent that collected maintenance reserves are not expected to be reimbursed to the lessee. 

The Group will recognise maintenance revenue once the balance the Group projects will be reimbursed to the lessee over the lease term has been collected.  The policy is applied on a component-by-component basis for aircraft where the Group collects cash maintenance reserves. 

The Company projects it will collect a surplus of approximately US$163.4m (unaudited) cash maintenance reserves in excess of maintenance reimbursements during the current lease terms. 

The Group believes that the new accounting policy which provides for a timely release of maintenance reserves to profit or loss over the lease term will ensure that financial statements reflect the Group's financial performance more accurately. This change in accounting policy has been applied retrospectively.

 

 

Summary of quantitative impact

The following tables summarise the material impacts on the consolidated statement of profit or loss, consolidated statement of comprehensive income and consolidated statement of financial position resulting from the change in accounting policy.

US$ '000s

Year ended 30 June 2023

 

Previously reported

Adjustments

Restated





Total income

99,250

830

100,080

Taxation

(808)

(78)

(886)

Profit from continuing operations

12,192

752

12,944





Profit attributable to:




Shareholders of Avation PLC

12,191

752

12,943

Non-controlling interest

1

-

1


12,192

752

12,944





Earnings per share:




Basic earnings per share (US cents)

17.43 cents


18.50 cents

Diluted earnings per share (US cents)

17.38 cents


18.46 cents





Total comprehensive income for the year

11,636


12,388





Total comprehensive income attributable to:




Shareholders of Avation PLC

11,635

752

12,387

Non-controlling interest

1

-

1


11,636

752

12,388





 

US$ '000s

As at 1 July 2022


Previously reported

Adjustments

Restated





Maintenance reserves, non-current

75,131

(1,377)

73,754

Deferred tax liabilities

25,437

176

25,613

Liabilities associated with assets held for sale

15,146

(347)

14,799

Retained earnings

84,519

1,548

86,067





 

US$ '000s

As at 30 June 2023


Previously reported

Adjustments

Restated





Maintenance reserves, non-current

54,587

(2,554)

52,033

Deferred tax liabilities

26,440

254

26,694

Retained earnings

88,995

2,300

91,295





 

Interim Management Statement

The market for air travel has continued to perform strongly with IATA reporting record passenger volumes in their latest air passenger market analysis report.  Industry RPKs grew 8.0% in the year to July 2024 led by international travel with 10.1% growth followed by domestic travel with 4.8% growth.

Growth in passenger volumes was recorded in all regions in the year to July 2024.

Avation has recently focussed on transitioning or disposing of unutilised aircraft, maintaining liquidity, managing costs and reducing leverage. The Company recently sold one of its last two remaining unutilised aircraft and leased the other to a new customer airline. As a result, the Company's fleet is now fully utilised for the first time since early in 2020.

The Company's focus will now shift towards growing the fleet and identifying opportunities to place the ten new ATR aircraft recently ordered by exercising purchase rights.

Avation aims to gradually transition to a more sustainable, lower CO2 emissions aircraft fleet. Aircraft delivered from Avation's orderbook and exercised purchase rights will be fitted with the new Pratt and Whitney Canada PW127XT engine. The PW127XT engine promises 20% lower maintenance costs, extended time on wing, 3% lower fuel consumption and 5% more power compared with the current engine variant. The manufacturer expects that the PW127XT engine will be certified to operate with sustainable aviation fuel ("SAF")* from 2025. Net emissions of CO2 are expected to be reduced when using SAF.

We also anticipate gradually trading out of older aircraft types and focussing on aircraft types such as the Airbus NEO and A220 series in addition to ATR turboprop aircraft. The Company's portfolio already includes a significant proportion of Airbus A220 and ATR 72 aircraft.

*Sustainable aviation fuel or SAF is the main term used by the aviation industry (including IATA and the International Civil Aviation Organization) to describe a non-conventional (non-fossil derived) aviation fuel. SAF is the preferred IATA term for this type of fuel although when other terms such as sustainable alternative fuel, sustainable alternative jet fuel, renewable jet fuel or biojet fuel are used, in general, the same intent is meant. 

Market Positioning

Avation's long-term strategy is to target growth and diversification by adding new airline customers, while maintaining a low average aircraft age and long remaining lease term metrics. Avation focuses on new and relatively new commercial passenger aircraft on long-term leases. In the short term the Company is considering further growth in its narrow body fleet.

Avation supports the transition of the aircraft industry towards aircraft capable of using SAF to produce lower CO2 emissions on a net basis. Reducing CO2 emissions is key to providing a sustainable future for the global aviation industry and in addressing climate-change risks.

The Company's business model involves rigorous investment criteria that seeks to mitigate the risks associated with the aircraft leasing sector. Avation will typically sell mid-life and older aircraft and redeploy capital to newer assets. This approach is intended to mitigate technology change risk, operational and financial risk, support sustained growth and deliver long-term shareholder value.

Avation will consider the acquisition or sale of individual or smaller portfolios of aircraft, based on prevailing market opportunities and consideration of risk and revenue concentrations.

Funding for aircraft acquisitions is traditionally sourced from capital markets, asset-backed lending, operational cash flows and disposals of aircraft. The ability to access acceptably priced funding is a key profit driver in aircraft leasing.

Principal risks factors facing the aircraft leasing industry include, but are not limited to, exposure to the airline industry and the risk of deterioration in the financial condition of airline customers, asset value risk driven by changing patterns of supply and demand and technological change, operational risks including risks resulting from war, acts of extremism and natural disasters, regulatory risks from changes to government regulations and tax laws and climate-change risks. 

The Directors may seek to repurchase ordinary shares in the Company from time to time subject to the terms of a share buy-back mandate which expires at the conclusion of the next Annual General Meeting.

Results Conference Call

Avation's senior management team will host an investor update call on 26 September 2024, at 1:00 pm BST (UK) / 8:00 am EST (US) / 8:00 pm SGT (Singapore), to discuss the Company's financial results. Investors can participate in the call by using the following link:

 

https://www.investormeetcompany.com/avation-plc/register-investor

 

A replay of the broadcast will be made available on the Investor Relations page of the Avation PLC website.

Forward Looking Statements

This release contains certain "forward looking statements". Forward looking statements may be identified by words such as "expects," "intends," "initiate", "anticipates," "plans," "believes," "seeks," "estimates," "will," or words of similar meaning and include, but are not limited to, statements regarding the outlook for Avation's future business and financial performance. Forward looking statements are based on management's current expectations and assumptions, which are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Actual outcomes and results may differ materially due to global political, economic, business, competitive, market, regulatory and other factors and risks. Further information on the factors and risks that may affect Avation's business is included in Avation's regulatory announcements from time to time, including its Annual Report, Full Year Financial Results and Half Year Results announcements. Avation expressly disclaims any obligation to update or revise any of these forward-looking statements, whether because of future events, new information, a change in its views or expectations, or otherwise.

Basis of presentation

This announcement covers the unaudited results of Avation PLC for the year ended 30 June 2024.

Financial information presented in this announcement is being published for the purposes of providing preliminary Group financial results for the year ended 30 June 2024. The financial information in this preliminary announcement is not audited and does not constitute statutory financial statements of Avation PLC within the meaning of section 434 of the Companies Act 2006. The Board of Directors approved this financial information on [25 September 2024]. Avation PLC's most recent statutory financial statements for the purposes of Chapter 7 of Part 15 of the Companies Act 2006 for the year ended 30 June 2023, upon which the auditors have given an unqualified audit, were published on 26 October 2023 and have been annexed to the annual return and delivered to the Registrar of Companies.

All "US$" amounts in this release are US Dollar amounts unless stated otherwise. Certain comparative amounts have been reclassified to conform with the current year presentation.

 

-ENDS-

 

Enquiries:

Avation PLC - Jeff Chatfield, Executive Chairman                                      +65 6252 2077

 

Avation welcomes shareholder questions and comments and advises the email address is: investor@avation.net

 

More information on Avation is available at www.avation.net.



AVATION PLC

 

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

FOR THE YEAR ENDED 30 JUNE 2024

 


 

2024

2023

(Restated)



US$'000s

US$'000s





Continuing operations

 



Revenue


92,397

92,691

Other income


3,575

7,389



95,972

100,080





Depreciation


(37,251)

(38,566)

Gain on derecognition of finance lease


-

2,792

Loss on disposal of aircraft


(2,915)

(1,000)

Unrealised gain on aircraft purchase rights and deposits paid for aircraft


 

46,886

 

20,540

Unrealised (loss)/gain on equity investments


(490)

7,520

Impairment (loss)/reversal of impairment loss on aircraft


(5,573)

3,287

Aircraft transition expenses


(2,607)

(11,389)

Reversal of/(provision for) expected credit losses


239

(659)

Administrative expenses


(8,792)

(8,760)

Legal and professional fees


(2,251)

(2,382)





Operating profit


83,218

71,463





 Finance income


9,843

5,906

Finance expenses


(63,015)

(63,539)

Profit before taxation


30,046

13,830





Taxation


(10,311)

(886)

Profit from continuing operations


19,735

12,944





Profit attributable to:




Shareholders of Avation PLC


19,735

12,943

Non-controlling interests


-

1



19,735

12,944

 

Earnings per share for profit




attributable to shareholders of Avation PLC




Basic earnings per share (US cents)


27.85

18.50

Diluted earnings per share (US cents)


27.71

18.46





 

 

AVATION PLC

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 JUNE 2024

 


 

2024

2023

(Restated)



US$'000s

US$'000s





Profit from continuing operations


19,735

12,944





Other comprehensive income:




Items that may be reclassified subsequently to profit or loss:




Net (loss)/gain on cash flow hedge, net of tax


(4,568)

410



(4,568)

410

Items that may not be reclassified subsequently to profit or loss:

 

 

 

Revaluation loss on property, plant and equipment, net of tax


(3,421)

(966)

Other comprehensive income, net of tax

 

(7,989)

(556)


 


 

Total comprehensive income for the year

 

11,746

12,388





Total comprehensive income attributable to:




Shareholders of Avation PLC


11,746

12,387

Non-controlling interests


-

1



11,746

12,388

 

 

 

AVATION PLC               

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS OF 30 JUNE 2024

 


 

 

 

 


 

30 June 2024

30 June 2023

(Restated)

1 July2022

(Restated)



US$'000s

US$'000s

US$'000s

ASSETS

 




Non-current assets





Property, plant and equipment


791,420

845,471

813,908

Finance lease receivables


12,754

41,213

55,208

Trade and other receivables


939

6,119

11,639

Deposits paid for aircraft


21,813

8,139

7,749

Derivative financial assets


8,096

13,442

5,920

Aircraft purchase rights


112,780

85,820

65,280

Lease incentive assets


7,756

4,686

310

Goodwill


1,902

1,902

1,902



957,460

1,006,792

961,916

 





Current assets





Finance lease receivables


28,644

3,932

5,624

Trade and other receivables


15,876

31,035

13,202

Deposits paid for aircraft


8,520

-

-

Derivative financial assets


-

54

-

Investment in equity, fair value through profit or loss


10,745

11,235

3,715

Lease incentive assets


3,136

1,643

137

Restricted cash


94,379

90,864

83,904

Investment in fixed term deposits


-

1,225

-

Cash and cash equivalents


23,561

24,816

35,267



184,861

164,804

141,849

Assets held for sale


-

8,000

113,255



184,861

172,804

255,104

Total assets

 

1,142,321

1,179,596

1,217,020

 

 

 


 

 

 

 

AVATION PLC               

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS OF 30 JUNE 2024

 

 

 

30 June 2024

30 June 2023

(Restated)

1 July 2022

(Restated)

 

 

US$'000s

US$'000s

US$'000s

EQUITY AND LIABILITIES





Equity





Share capital


1,182

1,182

1,203

Share premium


70,120

70,024

67,681

Treasury shares


-

-

(7,811)

Merger reserve


6,715

6,715

6,715

Asset revaluation reserve


47,343

50,764

51,730

Capital reserve


8,876

8,876

8,876

Other reserves


11,210

15,069

14,174

Retained earnings


110,944

91,295

86,067

Equity attributable to shareholders of Avation PLC


256,390

243,925

228,635

Non-controlling interests


7

7

6

Total equity


256,397

243,932

228,641






Non-current liabilities





Loans and borrowings


625,426

694,575

764,230

Trade and other payables


18,487

20,185

18,274

Derivative financial liabilities


2,037

1,632

1,055

Maintenance reserves


73,270

52,033

73,754

Deferred tax liabilities


34,047

26,694

25,613



753,267

795,119

882,926

Current liabilities





Loans and borrowings


49,668

61,401

63,900

Trade and other payables


18,920

17,167

15,940

Maintenance reserves


62,153

61,456

10,156

Income tax payable


1,916

521

658



132,657

140,545

90,654

Liabilities directly associated with assets held for sale


-

-

14,799



132,657

140,545

105,453

Total equity and liabilities


1,142,321

1,179,596

1,217,020

 

 


AVATION PLC                                                                                                              

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2024

 

 

Attributable to shareholders of Avation PLC

 

 

 

Share capital

Share

premium

Treasury

Shares

Merger reserve

Asset revaluation reserve

Capital reserve

Other

reserves

Retained earnings

Total

Non-controlling interest

Total

equity

 

US$'000s

US$'000s

US$'000s

US$'000s

US$'000s

US$'000s

US$'000s

US$'000s

US$'000s

US$'000s

US$'000s

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 1 July 2023 as previously reported

1,182

70,024

-

6,715

50,764

8,876

15,069

88,995

241,625

7

241,632

Effects of changes in accounting policies

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

2,300

 

2,300

 

-

 

2,300

Balance at 1 July 2023 as restated

 

1,182

 

70,024

 

-

 

6,715

 

50,764

 

8,876

 

15,069

 

91,295

 

243,925

 

7

 

243,932

 

 

 

 

 

 

 

 

 

 

 

 

Profit for the year

-

-

-

-

-

-

-

19,735

19,735

-

19,735

Other comprehensive income

-

-

-

-

(3,421)

-

(4,568)

-

(7,989)

-

(7,989)

Total comprehensive income

-

-

-

-

(3,421)

-

(4,568)

19,735

11,746

-

11,746

Issue of shares

1

96

-

-

-

-

(18)

-

79

-

79

Purchase of treasury shares

-

-

(95)

-

-

-

-

-

(95)

-

(95)

Cancellation of treasury shares

(1)

-

95

-

-

-

1

(95)

-

-

-

Share warrant expense

-

-

-

-

-

-

735

-

735

-

735

Total transactions with owners recognised directly in equity

 

-

 

96

 

-

 

-

 

-

 

-

 

718

 

(95)

 

719

 

-

 

719

 

 

 

 

 

 

 

 

 

 

 

 

Expiry of share warrants

-

-

-

-

-

-

(9)

9

-

-

-

Total others

-

-

-

-

-

-

(9)

9

-

-

-

Balance at 30 June 2024

1,182

70,120

-

6,715

47,343

8,876

11,210

110,944

256,390

7

256,397

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital reserve comprises acquisitions with non-controlling interests that do not result in a change of control.

 

Other reserves consists of capital redemption reserve, share warrant reserve, fair value reserve and foreign currency hedge reserve.

 

The merger reserve arose on acquisition of additional shares of the Company's subsidiary Capital Lease Aviation Limited through the allotment of ordinary shares in the year ended 30 June 2015.  The merger reserve represents the difference between the fair value and the nominal value of the shares issued by the Company.

 



AVATION PLC

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2023

 

 

Attributable to shareholders of Avation PLC

 

 

 

Share capital

Share

premium

Treasury

Shares

Merger reserve

Asset revaluation reserve

Capital reserve

Other

reserves

Retained earnings

Total

Non-controlling interest

Total

equity

 

US$'000s

US$'000s

US$'000s

US$'000s

US$'000s

US$'000s

US$'000s

US$'000s

US$'000s

US$'000s

US$'000s

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 1 July 2022 as previously reported

1,203

67,681

(7,811)

6,715

51,730

8,876

14,174

84,519

227,087

6

227,093

Effects of changes in accounting policies

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

1,548

 

1,548

 

-

 

1,548

Balance at 1 July 2022 as restated

 

1,203

 

67,681

 

(7,811)

 

6,715

 

51,730

 

8,876

 

14,174

 

86,067

 

228,635

 

6

 

228,641

 

 

 

 

 

 

 

 

 

 

 

 

Profit for the year

-

-

-

-

-

-

-

12,943

12,943

1

12,944

Other comprehensive income

-

-

-

-

(966)

-

410

-

(556)

-

(556)

Total comprehensive income

-

-

-

-

(966)

-

410

12,943

12,387

1

12,388

Issue of shares

18

2,343

-

-

-

-

(506)

-

1,855

-

1,855

Purchase of treasury shares

-

-

(94)

-

-

-

-

-

(94)

-

(94)

Cancellation of treasury shares

(39)

-

7,905

-

-

-

39

(7,905)

-

-

-

Share warrant expense

-

-

-

-

-

-

1,142

-

1,142

-

1,142

Total transactions with owners recognised directly in equity

 

(21)

 

2,343

 

7,811

 

-

 

-

 

-

 

675

 

(7,905)

 

2,903

 

-

 

2,903

 












Expiry of share warrants

-

-

-

-

-

-

(190)

190

-

-

-

Total others

-

-

-

-

-

-

(190)

190

-

-

-

Balance at 30 June 2023

1,182

70,024

-

6,715

50,764

8,876

15,069

91,295

243,925

7

243,932

 

 

 

 

 

 

 

 

 

 

 

 

 


AVATION PLC

                                                                                                                                        

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 JUNE 2024

 


 

2024

2023

(restated)



US$'000s

US$'000s

Cash flows from operating activities:




Profit before income tax


30,046

13,830

Adjustments for:




    Amortisation of lease incentive asset


2,721

1,368

    Depreciation expense


37,251

38,566

    Depreciation of right-of-use assets


278

233

    (Reversal of)/ provision for expected credit losses


(239)

659

    Finance income


(9,843)

(5,906)

    Finance expense


63,015

63,539

    Gain on derecognition of finance lease


-

(2,792)

    Loss on disposal of aircraft and aircraft engine


2,915

1,000

    Interest income from finance leases


(2,018)

(2,230)

    Impairment loss/(reversal of) on aircraft


5,573

(3,287)

    Maintenance reserves revenue


(5,351)

(830)

    Share warrants expense


735

1,142

    Foreign currency exchange loss/(gain)


(946)

(3,107)

    Unrealised gain on aircraft purchase rights and deposits paid for aircraft


 

(46,886)

 

(20,540)

    Unrealised loss/(gain) on equity investments


490

(7,520)

    Operating cash flows before working capital changes


77,741

74,125

Movement in working capital:




    Trade and other receivables and finance lease receivables


23,919

(2,906)

    Deposits paid for aircraft


(2,268)

(390)

    Trade and other payables


325

2,042

    Maintenance reserves


20,583

15,503

    Cash from operations


120,300

88,374

Finance income received


7,909

4,713

Finance expense paid


(45,724)

(44,091)

Income tax paid


(916)

(610)

Net cash from operating activities


81,569

48,386

Cash flows from investing activities:




Investment in fixed term deposits


1,225

(1,225)

Purchase of property, plant and equipment


(5)

(6)

Proceeds from disposal of aircraft


11,989

39,750

Net cash from investing activities


13,209

38,519

Cash flows from financing activities:




Net proceeds from issuance of ordinary shares


79

1,855

Purchase of treasury shares


(95)

(94)

Increase of restricted cash balances


(3,515)

(6,960)

Proceeds from loans and borrowings, net of transactions costs


29,098

42,958

Repayment of loans and borrowings


(121,600)

(135,115)

Net cash used in financing activities


(96,033)

(97,356)





Net decrease in cash and cash equivalents


(1,255)

(10,451)

Cash and cash equivalents at beginning of year


24,816

35,267

Cash and cash equivalents at end of year


23,561

24,816

 

 

 

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