REG - Avation PLC - Half-year Report
25/02/2025 07:30
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RNS Number : 3514Y Avation PLC 25 February 2025
AVATION PLC
("Avation" or "the Company")
UNAUDITED Results for the SIX MONTHS ended 31 December 2024
Avation PLC (LSE: AVAP), the commercial passenger aircraft leasing company,
announces unaudited results for the six months ended 31 December 2024.
Financial Highlights
· Revenue and other income increased to US$55.4 million (2023: US$46.3
million) displaying continued business momentum;
· EBITDA increased to US$55.6 million (2023: US$38.3 million)
demonstrating enhanced cash generation;
· Operating profit US$18.8 million (2023: US$17.5 million);
· Total cash increased to US$125.6 million (30 June 2024: US$117.9
million);
· Net indebtedness reduced by US$45.2 million to US$606.3 million (30
June 2024: US$651.5 million), representing 56.1% of total assets (30 June
2024: 57.0%);
· Ratio of net debt to EBITDA improved significantly to 5.7x (30 June
2024: 7.3x); and
· Net asset value per share increased 3.2% to £2.94 (30 June 2024
restated: £2.85).
Operational Highlights
· Avation's fleet was 100% utilised throughout the period, showing
strong airline demand and effective asset management;
· Two ATR 72-600 aircraft were sold pursuant to the exercise of
purchase options held by the lessee;
· The Company sold a new ATR 72-600 aircraft on delivery from the
manufacturer in November 2024 realising a profit of US$1.7 million and US$5.0
million net cash proceeds;
· In January 2025 an early lease termination option for the Company's
Boeing 777-300ER aircraft expired, providing certainty for an additional four
years lease revenue for the aircraft; and
· The Company has signed an agreement to purchase an Airbus A320
aircraft which is on lease to Etihad Airlines. The addition of Etihad to
Avation's lessee portfolio improves customer diversification and the Company's
overall credit risk profile.
Outlook
According to IATA, in 2024 international passenger traffic reached new highs,
growing 13.6% year-on-year. Passenger load factors increased in all regions
reflecting strong demand for air travel. The strength of the overall air
travel market is supportive for commercial aircraft leasing.
Avation's fleet is currently 100% utilised and is set to grow through the
recently agreed acquisition of an Airbus A320 aircraft on lease to Etihad
Airlines. We expect to close this aircraft acquisition in March 2025 and the
addition of Etihad to our roster of customer airlines provides meaningful
improvements to both revenue diversification and the overall credit risk
profile of our fleet.
We will also take delivery of a new ATR 72-600 in Q2 2025 from our orderbook.
This aircraft has been pre-sold to an airline in the Caribbean in a
transaction expected to generate a profit and release net cash proceeds of
around US$4.9 million.
Further fleet growth is expected in Q4 2025 with the scheduled deliveries of
two additional ATR 72-600 aircraft from our orderbook. The first delivery,
scheduled for October 2025, has been placed on long-term lease with a Japanese
airline and the second aircraft is expected to be placed for long-term lease
with an airline in South Korea. Both airlines are new customers for Avation,
further improving revenue diversification.
The Company has also just announced the agreement of an US$85 million
portfolio financing facility with a major international aviation finance bank.
This sophisticated loan facility is expected to provide a significant
improvement in Avation's cash flows and other benefits including the ability
to pool certain maintenance reserve liabilities, releasing surplus cash for
use in the business. The expected cashflow benefit is around US$ 400,000 per
month.
Having observed the significant profit volatility created by the option
pricing model used to value aircraft purchase rights, Avation intends to seek
a financial partner to invest in a joint venture for the purchase rights with
the desired outcome of funding future conversions to firm orders and reducing
volatility in Avation's reported profits.
The Company's future strategy will focus on leasing modern, low CO2 emissions,
fuel-efficient aircraft, reducing revenue concentrations and generating
further improvements in the overall credit quality of the Company's portfolio.
Avation's ATR orderbook and purchase rights provide a valuable growth
opportunity and the Company will also look to the secondary markets to add
additional narrow-body aircraft opportunistically.
The Company continues to focus on optimising its capital structure and is
pleased to have reduced leverage significantly from the peak seen during and
immediately after the COVID pandemic. Reduced levels of leverage have created
a platform which allows the Company to consider further growth opportunities
and for re-financing the Company's unsecured bonds which are due to mature in
October 2026.
Executive Chairman, Jeff Chatfield, said:
"During the six months ending 31 December 2024 Avation generated improvements
in revenue, EBITDA and operating profit, sold an aircraft at a profit, added
to liquidity and continued to reduce leverage. These are pleasing results and
show that the Company has fully overcome the challenges created by the impact
of the COVID pandemic on our business. We may now look forward with confidence
to the future having established a strong platform for a return to fleet
growth.
We are particularly pleased with our agreement to purchase an Airbus A320
aircraft on lease to Etihad Airlines, a world-class operator that enhances our
customer base and credit quality. We were also pleased to see the expiry of an
early lease termination option for our Boeing 777-300ER widebody aircraft last
month. This is a welcome development which increases our future contracted
revenue significantly and provides certainty for our most valuable aircraft
asset.
We note that long OEM order backlogs, supply chain issues and delays to new
aircraft deliveries have created an environment where airlines are keen to
extend existing aircraft leases, and aircraft coming off-lease are in demand.
We have an ATR 72-600 lease expiring next month and we expect to complete the
transition of this aircraft to a new lessee quickly. Our next lease expiries
are for three ATR 72-600 aircraft in early 2026. Our marketing team are seeing
high levels of interest in the market for these aircraft and we are confident
that we will be able to re-lease them at healthy lease rates.
Avation has continued to de-lever its balance sheet, reducing debt by US$36.7
million during the six-month period and achieving a reduction to 56.1% in the
ratio of net debt to total assets as at 31 December 2024. Strong cash
generation, improved earnings visibility, cost control and reduced leverage
have created a stable platform for the Company to grow. We are also seeing
opportunities for refinancing transactions on attractive terms, which the
Company intends to take advantage of. The recently announced US$85 million
loan facility is a good example and we are confident of concluding further
refinancing transactions including for the Company's unsecured bonds which
mature in October 2026.
Reflecting the Company's growth ambitions and market position, the Board is
considering an application to transfer from the Transition Category to the
Equity Shares (Commercial Companies) ("ESCC") category of the Official List
and Main Market of the London Stock Exchange. While still at an early stage,
this move would further enhance Avation's visibility and access to capital
markets. The Board will make appropriate further announcements in due course."
Financial Summary
US$ '000s Six months ended 31 December,
2024 2023
Revenue 52,980 44,733
Other income 2,468 1,544
55,448 46,277
EBITDA (1) 55,553 38,280
Operating profit 18,816 17,547
Profit/(loss) before tax (9,769) (9,583)
Profit/(loss) after tax 868 (8,804)
EPS 1.23c (12.42c)
US$ '000s 31 December 2024 30 June
2024
Fleet assets (2) 787,230 832,818
Total assets 1,081,048 1,142,321
Cash and bank balances (3) 125,612 117,940
Unrestricted cash and cash equivalents 32,176 23,561
Net asset value per share (US$) (4) $3.67 $3.62
Net asset value per share (GBP) (5) £2.94 £2.85
1. EBITDA is a non-GAAP financial measure used as an indicator of a
company's ability to incur and service debt. EBITDA has been calculated as the
sum of profit before tax, finance expenses, depreciation and impairment and
unrealised losses on aircraft purchase rights and deposits paid for aircraft.
EBITDA presented herein may not be comparable to similarly titled measures
presented by other companies.
2. Fleet assets are defined as property, plant and equipment plus assets
held for sale plus finance lease receivables.
3. Cash and bank balances as at 31 December 2024 comprise cash and cash
equivalents of US$32.2 million (30 June 2024: US$23.6 million), restricted
cash balances of US$54.2 million (30 June 2024: US$94.4 million) and
investment in fixed term deposits US$39.3 million (30 June 2024: US$ nil).
4. Net asset value per share is total equity divided by the total number
of shares in issue, excluding treasury shares.
5. Based on GBP:USD exchange rate as at 31 December 2024 of 1.25 (30 June
2024:1.27).
Aircraft Fleet
Aircraft Type 31 December 2024 30 June 2024
Boeing 777-300ER 1 1
Airbus A330-300 1 1
Airbus A321-200 6 6
Airbus A320-200 2 2
Airbus A220-300 5 5
ATR 72-600 13 15
ATR 72-500 4 4
Total 32 34
At 31 December 2024, Avation's fleet comprised 32 aircraft, including three
aircraft on finance lease. Avation currently serves 15 customers in 13
countries. The weighted average age of the fleet is 7.9 years (30 June 2024:
7.3 years) and the weighted average remaining lease term is 4.2 years (30 June
2024: 4.1 years).
Two ATR 72-600 aircraft were sold during the period pursuant to the exercise
of purchase options held by the lessee. Avation's fleet comprises 55%
narrowbody, 27% turboprop and 18% widebody aircraft by book value as at 31
December 2024. Fleet assets have decreased 5.5% to US$787.2 million (30 June
2024: US$832.8 million). As at the date of this report all aircraft are
on-lease.
The company took delivery of an ATR 72-600 aircraft in November 2024. The
aircraft was sold on delivery realising a profit of US$1.7 million.
Avation has eleven new ATR 72-600 aircraft on order for delivery between Q2
2025 and Q2 2028 and purchase rights for a further 24 aircraft as at 31
December 2024.
Debt summary
US$ '000s 31 December 2024 30 June
2024
Current loans and borrowings 55,948 49,668
Non-current loans and borrowings 582,494 625,426
Total loans and borrowings 638,442 675,094
Unrestricted cash and bank balances 32,176 23,561
Net indebtedness (1) 606,266 651,533
Net debt to total assets 56.1% 57.0%
Net debt to EBITDA 5.7x 7.3x
Weighted average cost of secured debt (2) 4.9% 4.8%
Weighted average cost of total debt (3) 6.6% 6.4%
1. Net indebtedness is defined as loans and borrowings less unrestricted
cash and bank balances.
2. Weighted average cost of secured debt is the weighted average interest
rate for secured loans and borrowings at period end.
3. Weighted average cost of total debt is the weighted average interest
rate for total loans and borrowings at period end.
Net indebtedness was reduced by 6.9% to US$606.3 million (30 June 2024:
US$651.5 million).
The weighted average cost of total debt has increased to 6.6% at 31 December
2024 (30 June 2024: 6.4%) due to repayments of lower cost secured loans in the
period. The weighted average cost of secured debt also increased to 4.9% at 31
December 2024 (30 June 2024: 4.8%).
At the end of the period, Avation's net debt to total assets ratio improved to
56.1% (30 June 2024: 57.0%). At 31 December 2024, 96.5% of total debt was at
fixed or hedged interest rates (30 June 2024: 96.4%). The ratio of unsecured
debt to total debt was 48.5% (30 June 2024: 44.8%).
Financial Analysis
Revenue
US$ '000s Six months ended 31 December,
2024 2023
Lease rental revenue 44,558 43,887
Less: amortisation of lease incentive assets (1,628) (1,169)
42,930 42,718
Interest income from finance leases 780 1,036
Maintenance reserves revenue 9,270 979
52,980 44,733
Lease rental revenue increased by 1.5% from US$43.9 million in the six months
ended 31 December 2023 to US$44.6 million in the six months ended 31 December
2024. The increase was principally due to improved fleet utilisation. All of
Avation's aircraft were on-lease throughout the period.
Interest income from finance leases decreased by 24.7% from US$1.0 million in
the six months ended 31 December 2023 to US$0.8 million in the six months
ended 31 December 2024. There were three aircraft leased on finance leases at
31 December 2024.
Other income
US$ '000s Six months ended 31 December,
2024 2023
Fees for late payment 753 608
Deposit released - 350
Foreign currency exchange gain 1,002 -
Claim recovery 442 385
Others 271 201
2,468 1,544
Claim recoveries recognised in other income in the six months ended 31
December 2024 and 31 December 2023 are distributions paid to creditors of
Virgin Australia in excess of amounts allocated to trade receivables.
Foreign currency exchange gains in the six months ended 31 December 2024 arose
principally from the revaluation of Euro denominated loans during the period.
Administrative expenses
Six months ended 31 December,
US$ '000s
2024 2023
Staff costs 2,875 2,792
Other administrative expenses 1,725 1,739
4,600 4,531
Staff costs increased by 3.0% from US$2.8 million in the six months ended 31
December 2023 to US$2.9 million in the six months ended 31 December 2024 as a
result of inflationary pressures.
Other administrative expenses were unchanged at US$1.7 million in both the six
months ended 31 December 2023 and 31 December 2024.
Finance income
US$ '000s Six months ended 31 December,
2024 2023
Interest income 2,752 2,814
Fair value gain on financial derivatives - 645
Finance income from discounting non-current deposits to fair value 315 332
Gain on repurchase of unsecured notes - 311
Gain on early full repayment of borrowings 1,084 161
4,151 4,263
Interest income was US$2.8 million in the six months ended 31 December 2024.
The group deploys surplus cash balances into fixed term deposits while
maintaining sufficient liquidity to meet near-term payment obligations.
Avation generated a gain of US$0.3 million on the repurchase of US$8.0 million
of Avation Capital S.A. 8.25%/9.0% unsecured notes at a discount in December
2023.
A gain of US$1.1 million on early full repayment of borrowings arose when
in-the-money interest rate swaps were terminated concurrently with repayment
of two loans on the sales of aircraft in August 2024.
Finance expenses
US$ '000s Six months ended 31 December,
2024 2023
Amortisation of IFRS 9 gain on debt modification 7,440 4,730
Interest expense on secured borrowings 8,447 10,125
Interest expense on unsecured notes 13,677 15,555
Amortisation of loan transaction costs 699 543
Amortisation of interest expense on non-current borrowings 314 326
Fair value loss on financial derivatives 2,002 -
Others 157 114
25,296 26,663
Amortisation of IFRS 9 gain on debt modification of US$7.4 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 31 December 2024 is US$331.6 million.
Interest expense on secured borrowings reduced by 16.6% to US$8.4 million in
the six months ended 31 December 2024 from US$10.1 million in the six months
ended 31 December 2023 as a result of repayments of secured loans. Secured
loans have been paid down by US$108.8 million from US$437.5 million at 31
December 2023 to US$328.7 million at 31 December 2024.
Interest expense on unsecured notes reduced by 12.1% from US$15.6 million in
the six months ended 31 December 2023 to $13.7 million in the six months ended
31 December 2024. The reduction results from repurchases of notes which have
reduced the outstanding principal amount by US$18.0 million since December
2023 and the company's choice to pay the November 2024 coupon payment using
the 8.25% all cash option instead of the 9.0% part cash part payment-in-kind
option.
A mark to market loss of US$2.0 million arose on the revaluation of interest
rate swap agreements as a result of changes in floating interest rates in the
six months ended 31 December 2024.
Results Conference Call
Avation's senior management team will host an investor update call on 25
February 2025, at 12:00 PM GMT (UK) / 7:00 AM EST (US) / 8:00 PM SGT
(Singapore), to discuss the Company's financial results.
A replay of the investor update call 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 six
months ended 31 December 2024.
Financial information presented in this announcement is being published for
the purposes of providing preliminary Group financial results for the six
months ended 31 December 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 29
February 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 2024, upon which the auditors have given an unqualified audit,
were published on 25 October 2024 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
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
(http://www.avation.net) .
AVATION PLC
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2024
Note 31 Dec 31 Dec
2024 2023
US$'000s US$'000s
Continuing operations
Revenue 5 52,980 44,733
Other income 6 2,468 1,544
55,448 46,277
Depreciation 11 (18,599) (18,660)
Gain/(loss) on disposal of aircraft 1,713 (2,855)
Unrealised (loss)/gain on aircraft purchase rights and pre-delivery aircraft 16,17 (15,389) 2,190
deposits paid
Unrealised (loss)/gain on equity investment 18 (124) (500)
Reversal of impairment loss on aircraft 11 1,402 -
Aircraft transition expenses (180) (2,933)
Reversal of expected credit losses 85 38
Administrative expenses (4,600) (4,531)
Legal and professional fees (940) (1,254)
Other expenses 7 - (225)
Operating profit 18,816 17,547
Finance income 8 4,151 4,263
Amortisation of IFRS 9 gain on debt modification of the unsecured notes (7,440) (4,730)
Finance expenses 9 (25,296) (26,663)
Loss before taxation (9,769) (9,583)
Taxation 10,637 779
Profit/(loss) from continuing operations 868 (8,804)
Profit/(loss) attributable to:
Shareholders of Avation PLC 868 (8,804)
Non-controlling interests - -
868 (8,804)
Earnings per share for profit/(loss)
attributable to shareholders of Avation PLC
Basic earnings per share (US cents) 1.23 (12.42)
Diluted earnings per share (US cents) 1.18 (12.38)
AVATION PLC
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 31 DECEMBER 2024
31 Dec 31 Dec
2024 2023
US$'000s US$'000s
868 (8,804)
Profit/(loss) from continuing operations
Other comprehensive loss:
Items may be reclassified subsequently to profit or loss:
Net loss on cash flow hedge, net of tax (2,003) (5,089)
(2,003) (5,089)
Items may be reclassified subsequently to profit or loss:
Revaluation loss on property, plant and equipment, net of tax (561) -
Other comprehensive loss, net of tax (2,564) (5,089)
Total comprehensive loss for the period (1,696) (13,893)
Total comprehensive loss attributable to:
Shareholders of Avation PLC (1,696) (13,893)
Non-controlling interests - -
(1,696) (13,893)
AVATION PLC
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024
Note 31 Dec 30 Jun
2024 2024
US$'000s US$'000s
ASSETS
Non-current assets
Property, plant and equipment 11 773,597 791,420
Finance lease receivables 13 11,959 12,754
Trade and other receivables 12 464 939
Pre-delivery aircraft deposits paid 16 18,125 21,813
Derivative financial assets 15 4,419 8,096
Aircraft purchase rights 17 100,460 112,780
Lease incentive assets 6,280 7,756
Goodwill 14 1,902 1,902
917,206 957,460
Current assets
Finance lease receivables 13 1,674 28,644
Trade and other receivables 12 12,671 15,876
Pre-delivery aircraft deposits paid 16 10,280 8,520
Investment in equity, fair value through profit or loss 18 10,621 10,745
Lease incentive assets 2,984 3,136
Restricted cash 54,162 94,379
Cash investment in fixed term bank deposits 39,274 -
Cash and bank balances 32,176 23,561
163,842 184,861
Total assets 1,081,048 1,142,321
EQUITY AND LIABILITIES
Equity
Share capital 19 1,230 1,182
Share premium 78,967 70,120
Treasury shares 19 (14,962) -
Merger reserve 6,715 6,715
Asset revaluation reserve 46,782 47,343
Capital reserve 8,876 8,876
Other reserves 6,676 11,210
Retained earnings 111,362 110,944
Equity attributable to shareholders of Avation PLC 245,646 256,390
Non-controlling interests 7 7
Total equity 245,653 256,397
Non-current liabilities
Loans and borrowings 20 582,494 625,426
Trade and other payables 18,309 18,487
Derivative financial liabilities 15 3,969 2,037
Maintenance reserves 21 97,587 73,270
Deferred tax liabilities 21,862 34,047
724,221 753,267
Current liabilities
Loans and borrowings 20 55,948 49,668
Trade and other payables 18,855 18,920
Maintenance reserves 21 34,004 62,153
Income tax payable 2,367 1,916
111,174 132,657
Total equity and liabilities 1,081,048 1,142,321
AVATION PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 31 DECEMBER 2024
Attributable to shareholders of Avation PLC
Share capital Share Treasury Merger reserve Asset revaluation reserve Capital reserve Other Retained earnings Total Non-controlling interest Total
premium Shares reserves equity
US$'000s US$'000s US$'000s US$'000s US$'000s US$'000s US$'000s US$'000s US$'000s US$'000s US$'000s
Balance at 1 July 2024 1,182 70,120 - 6,715 47,343 8,876 11,210 110,944 256,390 7 256,397
Profit for the period - - - - - - - 868 868 - 868
Other comprehensive loss - - - - (561) - (2,003) - (2,564) - (2,564)
Total comprehensive loss - - - - (561) - (2,003) 868 (1,696) - (1,696)
Issue of shares 19 48 8,847 - - - - (2,753) - 6,142 - 6,142
Purchase of treasury shares 19 - - (14,962) - - - - - (14,962) - (14,962)
Share warrant expense - - - - - - 222 - 222 - 222
Dividend paid 24 - - - - - - - (450) (450) - (450)
Total transactions with owners recognised directly in equity
48 8,847 (14,962) - - - (2,531) (450) (9,048) - (9,048)
Balance at 31 December 2024 1,230 78,967 (14,962) 6,715 46,782 8,876 6,676 111,362 245,646 7 245,653
Capital reserve comprises acquisitions with non-controlling interests that do
not result in a change of control.
Other reserves consists of capital redemption reserve, share warrant reserve,
fair value reserve and foreign currency hedge reserve.
The merger reserve arose on acquisition of additional shares of the Company's
subsidiary Capital Lease Aviation Limited through the allotment of ordinary
shares in the year ended 30 June 2015. The merger reserve represents the
difference between the fair value and the nominal value of the shares issued
by the Company.
AVATION PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 31 DECEMBER 2023
Attributable to shareholders of Avation PLC
Share capital Share Treasury Merger reserve Asset revaluation reserve Capital reserve Other Retained earnings Total Non-controlling interest Total
premium Shares reserves equity
US$'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
Loss for the period - - - - - - - (8,804) (8,804) - (8,804)
Other comprehensive loss - - - - - - (5,089) - (5,089) - (5,089)
Total comprehensive loss - - - - - - (5,089) (8,804) (13,893) - (13,893)
Share warrant expense - - - - - - 465 - 465 - 465
Total transactions with owners recognised directly in equity
- - - - - - 465 - 465 - 465
Expiry of share warrants - - - - - - (9) 9 - - -
Total others - - - - - - (9) 9 - - -
Balance at 31 December 2023 1,182 70,024 - 6,715 50,764 8,876 10,436 82,500 230,497 7 230,504
AVATION PLC
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2024
Note 31 Dec 31 Dec 2023
2024
US$'000s US$'000s
Cash flows from operating activities:
Loss before taxation (9,769) (9,583)
Adjustments for:
Amortisation of lease incentive asset 5 1,628 1,169
Depreciation expense 11 18,599 18,660
Depreciation of right-of-use assets 141 138
Reversal of expected credit losses (85) (38)
Finance income 8 (4,151) (4,263)
Finance expense 9 25,296 26,663
Amortisation of IFRS 9 gain on debt modification of the unsecured notes
7,440 4,730
(Gain)/loss on disposal of aircraft (1,713) 2,855
Interest income from finance lease 5 (780) (1,036)
Reversal of impairment loss on aircraft 11 (1,402) -
Maintenance reserves income 5 (9,270) (979)
Share warrants expense 222 465
Foreign currency exchange (gain)/loss (1,231) 344
Unrealised gain on aircraft purchase rights and pre-delivery aircraft 16,17
deposits paid
15,389 (2,190)
Unrealised loss on equity investments 18 124 500
Operating cash flows before working capital changes 40,438 37,435
Movement in working capital:
Trade and other receivables and finance lease receivables 29,685 15,513
Pre-delivery aircraft deposits paid (4,536) -
Trade and other payables 806 3,785
Maintenance reserves 5,438 12,755
Cash from operations 71,831 69,488
Finance income received 5,236 3,865
Finance expense paid (21,972) (20,796)
Income tax paid (514) (345)
Net cash from operating activities 54,581 52,212
Cash flows from investing activities:
Cash investment in fixed term bank deposits (39,274) 1,225
Purchase of aircraft (15,682) -
Proceeds from disposal of aircraft 19,790 4,049
Net cash (used in)/from investing activities (35,166) 5,274
Cash flows from financing activities:
Net proceeds from issuance of ordinary shares 6,142 -
Purchase of treasury shares 19 (14,962) -
Dividend paid 24 (450) -
Decrease/(increase) of restricted cash balances 40,217 (15,752)
Proceeds from loans and borrowings, net of transactions costs - 26,171
Repayment of loans and borrowings (41,747) (49,265)
Net cash used in financing activities (10,800) (38,846)
Net increase in cash and cash equivalents 8,615 18,640
Cash and cash equivalents at beginning of financial period 23,561 24,816
Cash and cash equivalents at end of financial period 32,176 43,456
AVATION PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2024
This interim condensed consolidated financial statements for Avation PLC for
the six months ended 31 December 2024 were authorised for issue in accordance
with a resolution of the Directors on 24 February 2025.
1 CORPORATE INFORMATION
Avation PLC is a public limited company incorporated in England and Wales
under the Companies Act 2006 (Registration Number 05872328) and its shares are
traded on the Standard Segment of the Main Market of the London Stock
Exchange.
The Group's principal activity is aircraft leasing.
2 BASIS OF PREPARATION AND ACCOUNTING POLICIES
These interim condensed consolidated financial statements have been prepared
in accordance with the Disclosure and Transparency Rules (DTR) of the
Financial Conduct Authority and in accordance with UK-adopted International
Accounting Standard (IAS) 34 'Interim Financial Reporting'.
The interim condensed consolidated financial statements do not include all the
notes of the type normally included within the annual report and therefore
cannot be expected to provide as full an understanding of the financial
performance, financial position and financial and investing activities of the
consolidated entity as the annual report.
It is recommended that the interim condensed consolidated financial statements
be read in conjunction with the annual report for the year ended 30 June 2024
and considered together with any public announcements made by Avation PLC
during the six months ended 31 December 2024.
The accounting policies and methods of computation are the same as those
adopted in the annual report for the year ended 30 June 2024.
The preparation of the interim condensed consolidated financial statements
requires management to make estimates and assumptions that affect the reported
income and expenses, assets and liabilities and disclosure of contingencies at
the date of the Interim Report, actual results may differ from these
estimates.
The statutory financial statements of Avation PLC for the year ended 30 June
2024, which carried an unqualified audit report, have been delivered to the
Registrar of Companies and did not contain any statements under section 498 of
the Companies Act 2006.
The interim condensed consolidated financial statements are unaudited.
The interim condensed consolidated financial statements do not constitute
statutory financial statements within the meaning of section 434 of the
Companies Act 2006.
AVATION PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2024
3 NEW STANDARDS AND INTERPRETATIONS NOT APPLIED AND
STANDARDS IN EFFECT IN 2025
(a) New standards and interpretations not applied
The Group has not adopted the following new or amended standards and
interpretations which are relevant to the Group that have been issued but are
not yet effective:
(b)
Description Effective date
(period beginning)
Amendments to IAS 21 - Lack of exchangeability 1 January 2025
Amendments to IFRS 9 and IFRS 7: Classification and Measurement of Financial 1 January 2026
Instruments
IFRS 18 - Presentation and Disclosure in Financial Statements 1 January 2027
Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets between an Postponed indefinitely
Investor and its Associate or joint venture
Based on a preliminary assessment using currently available information, the
Group does not expect the adoption of the above standards to have a material
impact on the financial statements in the period of initial application. These
preliminary assessments may be subject to changes arising from ongoing
analyses when the Group adopts the standards. The Group plans to adopt the
above standards on the effective date.
(b) Standards in effect in 2025
The Group has adopted all new standards that have come into effect during the
six months ended 31 December 2024. The adoptions do not have a material impact
on the Group's interim condensed consolidated financial statements.
AVATION PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2024
4 FAIR VALUE MEASUREMENT
The fair value of a financial instrument is the price that would be received
to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date.
The carrying amounts of cash and bank balances, trade and other receivables,
finance lease receivables - current, trade and other payables - current, loans
and borrowings - current and maintenance reserves are a reasonable
approximation of fair value either due to their short-term nature or because
the interest rate charged closely approximates market interest rates or that
the financial instruments have been discounted to their fair value at a
current pre-tax interest rate.
31 Dec 2024 30 Jun 2024
Carrying amount Fair value Carrying amount Fair value
US$'000s US$'000s US$'000s US$'000s
Financial assets:
Finance lease receivables - non-current 11,959 10,798 12,754 11,461
Pre-delivery aircraft deposits paid 28,405 28,405 30,333 30,333
Derivative financial assets 4,419 4,419 8,096 8,096
Aircraft purchase rights 100,460 100,460 112,780 112,780
Investment in equity, fair value through profit or loss 10,621 10,621 10,745 10,745
Financial liabilities:
Deposits collected - non-current 15,193 12,420 14,967 11,936
Loans and borrowings other than unsecured notes - non-current 272,717 241,529 299,009
323,117
Unsecured notes 309,777 325,701 302,309 300,887
Share warrants 3,969 3,969 2,037 2,037
The fair values (other than for unsecured notes, investment in debt
instrument, fair value through profit or loss) above are estimated by
discounting expected future cash flows at market incremental lending rate for
similar types of lending, borrowing or leasing arrangements at the end of the
reporting period, which is classified under level 2 of the fair value
hierarchy.
The fair value of the unsecured notes and share warrants are based on level 1
quoted prices (unadjusted) in an active market that the Group can access at
measurement date.
The fair value of pre-delivery aircraft deposits paid are classified under
level 2 of the fair value hierarchy for which the inputs are observable for
the determination of fair value using the discounted cashflow model.
The fair value of the derivative financial instruments is determined by
reference to marked-to-market values provided by counterparties. The fair
value measurement of all derivative financial instruments is classified under
level 2 of the fair value hierarchy, for which inputs other than quoted prices
that are observable for the asset or liability, either directly (that is, as
prices) or indirectly (that is, derived from prices) are included as inputs
for the determination of fair value.
AVATION PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2024
4 FAIR VALUE MEASUREMENT (continued)
Assets measured at fair value classified under level 3:
31 Dec 30 Jun
2024 2024
US$'000s US$'000s
Fair value measurement using significant unobservable inputs:
Aircraft 773,591 791,408
Investment in equity, fair value through profit or loss 10,621 10,745
5 REVENUE
31 Dec 31 Dec
2024 2023
US$'000s US$'000s
Lease rental revenue 44,558 43,887
Less: amortisation of lease incentive asset (1,628) (1,169)
42,930 42,718
Interest income on finance leases 780 1,036
Maintenance reserves revenue 9,270 979
52,980 44,733
Geographical analysis
Europe Asia Pacific Total
US$'000s US$'000s US$'000s
31 Dec 2024 10,031 42,949 52,980
31 Dec 2023 10,621 34,112 44,733
AVATION PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2024
5 REVENUE (continued)
Operating lease commitments
The Group leases out aircraft under operating leases. The maturity analysis of
the undiscounted lease payments to be received under operating leases are as
follows:
31 Dec 31 Dec
2024 2023
US$'000s US$'000s
Within one year 87,878 92,367
One to two years 80,822 87,210
Two to three years 75,315 72,240
Three to four years 48,408 64,442
Four to five years 31,482 37,535
Later than five years 26,245 49,527
6 OTHER INCOME
31 Dec 31 Dec
2024 2023
US$'000s US$'000s
Fees for late payment 753 608
Deposit released - 350
Foreign currency exchange gain 1,002 -
Recovery of claims from customer 442 385
Others 271 201
2,468 1,544
7 OTHER EXPENSES
31 Dec 31 Dec
2024 2023
US$'000s US$'000s
Foreign currency exchange loss - 225
AVATION PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2024
8 FINANCE INCOME
31 Dec 31 Dec
2024 2023
US$'000s US$'000s
Interest income from financial institutions 2,555 2,365
Interest income from non-financial institutions 197 449
Fair value gain on financial derivatives - 645
Finance income from discounting non-current deposits to fair value 315 332
Gain on repurchases of unsecured notes - 311
Gain on early full repayment of borrowings 1,084 161
4,151 4,263
9 FINANCE EXPENSES
31 Dec 31 Dec
2024 2023
US$'000s US$'000s
Interest expense on borrowings 8,447 10,125
Interest expense on unsecured notes 13,677 15,555
Amortisation of loan transaction cost 699 543
Amortisation of interest expense on non-current deposits 314 326
Fair value loss on financial derivatives 2,002 -
Others 157 114
25,296 26,663
10 RELATED PARTY TRANSACTIONS
Significant related party transactions:
31 Dec 31 Dec
2024 2023
US$'000s US$'000s
Entities controlled by key management personnel
(including directors):
Lease liability paid (175) (164)
Consulting fee expense (221) (205)
Maintenance service - (7)
Service fee income 41 37
AVATION PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2024
11 PROPERTY, PLANT AND EQUIPMENT
Furniture and equipment Jet Turboprop aircraft Total
aircraft
US$'000s US$'000s US$'000s US$'000s
31 December 2024:
Cost or valuation:
At 1 July 2024 102 850,755 289,411 1,140,268
Additions - - 19,077 19,077
Disposals - - (19,077) (19,077)
Revaluation recognised in equity - 709 (1,335) (626)
At 31 December 2024 102 851,464 288,076 1,139,642
Representing:
At cost 102 - - 102
At valuation - 851,464 288,076 1,139,540
102 851,464 288,076 1,139,642
Accumulated depreciation and impairment:
At 1 July 2024 91 264,402 84,355 348,848
Depreciation expense 5 13,973 4,621 18,599
(Reversal of)/impairment loss - (1,603) 201 (1,402)
At 31 December 2024 96 276,772 89,177 366,045
Net book value:
At 1 July 2024 11 586,353 205,056 791,420
At 31 December 2024 6 574,692 198,899 773,597
AVATION PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2024
11 PROPERTY, PLANT AND EQUIPMENT (continued)
Furniture and equipment Jet Turboprop aircraft Total
aircraft
US$'000s US$'000s US$'000s US$'000s
30 June 2024:
Cost or valuation:
At 1 July 2023 97 851,435 310,169 1,161,701
Additions 5 - - 5
Disposals - - (17,692) (17,692)
Revaluation recognised in equity - (680) (3,066) (3,746)
At 30 June 2024 102 850,755 289,411 1,140,268
Representing:
At cost 102 - - 102
At valuation - 850,755 289,411 1,140,166
102 850,755 289,411 1,140,268
Accumulated depreciation and impairment:
At 1 July 2023 81 230,783 85,366 316,230
Depreciation expense 10 27,794 9,447 37,251
Disposals - (10,206) (10,206)
(Reversal of)/impairment loss - 5,825 (252) 5,573
At 30 June 2024 91 264,402 84,355 348,848
Net book value:
At 1 July 2023 16 620,652 224,803 845,471
At 30 June 2024 11 586,353 205,056 791,420
Assets pledged as security
The Group's aircraft and aircraft held under asset for sale with carrying
values of US$625 million (30 June 2024: US$638.0 million) are mortgaged to
secure the Group's borrowings (Note 20).
Additions and Disposals
During the period, the Group purchased and sold 1 turboprop aircraft and
recognised a gain on disposal of US$1.7 million.
AVATION PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2024
11 PROPERTY, PLANT AND EQUIPMENT (continued)
Geographical analysis
31 Dec 2024 Europe Asia Pacific Total
US$'000s US$'000s US$'000s
Capital expenditure 19,077 - 19,077
Net book value - aircraft 214,717 558,874 773,591
30 Jun 2024 Europe Asia Pacific Total
US$'000s US$'000s US$'000s
Capital expenditure - 5 5
Net book value - aircraft 217,480 573,929 791,409
12 TRADE AND OTHER RECEIVABLES
31 Dec 30 Jun
2024 2024
US$'000s US$'000s
Current
Trade receivables 8,290 8,162
Less:
Allowance for expected credit losses (415) (312)
7,875 7,850
Accrued revenue 2,277 1,939
Less:
Allowance for expected credit losses (6) (6)
2,271 1,933
Other receivables 1,103 5,533
Less:
Allowance for expected credit losses (55) (251)
1,048 5,282
Interest receivables 654 518
Less:
Allowance for expected credit losses (20) (19)
634 499
Deposits 549 49
Prepaid expenses 294 263
12,671 15,876
Non-current:
Other receivables 213 570
Right-of-use assets 251 369
464 939
AVATION PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2024
13 FINANCE LEASE RECEIVABLES
Future minimum lease payments receivable under finance leases are as follows:
31 Dec 2024 30 Jun 2024
Minimum lease payments Present value of payments Minimum lease payments Present value of payments
US$'000s US$'000s US$'000s US$'000s
Within one year 2,632 1,696 29,907 28,659
Less:
Allowance for expected credit losses (22) (22) (15) (15)
2,610 1,674 29,892 28,644
One to two years 9,032 8,413 2,430 1,625
Two to three years 3,657 3,546 11,405 11,129
Three to four years - - - -
Four to five years - - - -
Later than five years - - - -
Total minimum lease payments 15,299 13,633 43,727 41,398
Less: amounts representing interest income (1,666) - (2,329) -
Present value of minimum lease payments 13,633 13,633 41,398 41,398
14 GOODWILL
The Group performs its annual impairment test in June and when circumstances
indicate the carrying value may be impaired. For the purpose of these
financial statements there was no indication of impairment. The key
assumptions used to determine the recoverable amount for the different cash
generating units were disclosed in the annual consolidated financial
statements for the year ended 30 June 2024.
15 DERIVATIVE FINANCIAL ASSETS/LIABILITIES
Contract/ Fair value
notional amount
31 Dec 2024 30 Jun 31 Dec 30 Jun
2024 2024 2024
US$'000s US$'000s US$'000s US$'000s
Derivative financial assets -non- current
Interest rate swap 140,734 162,741 4,419 7,505
Cross-currency interest rate swap - 4,000 - 591
140,734 166,741 4,419 8,096
Derivative financial liabilities
Share warrants - - 3,969 2,037
AVATION PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2024
15 DERIVATIVE FINANCIAL ASSETS/LIABILITIES (continued)
Hedge accounting has been applied for interest rate swap contracts and
cross-currency interest rate swap contracts which have been designated as cash
flow hedges.
The Group pays fixed rates of interest of 2.3% to 2.6% per annum and receives
floating rate interest equal to 1-month to 3-month SOFR under the interest
rate swap contracts.
The swap contracts mature between 15 February 2026 and 24 May 2029.
Changes in the fair value of these interest rate swap and cross-currency
interest rate swap contracts are recognised in the fair value reserve. The net
fair value loss net of tax of US$3.2 million (31 December 2023: loss of US$4.2
million) on these derivative financial instruments was recognised in the fair
value reserve for the period.
The Group entered into Euro denominated lease agreements which create exposure
to variability in cash flows due movements in the EUR:USD exchange rate. To
hedge its exposure to variable cash flows resulting from changes in EUR:USD
spot rates, the Group has arranged Euro denominated financing which reduces
overall exposure to variable cash flows to the extent that lease receipts and
debt service cashflows are matched. The Group is making use of a
non-derivative hedging instrument and has designated the cash flows with
respect to the loan interest and principal repayment (hedging instrument)
against a specific portion of the lease receivable (hedged item).
Unrealised foreign exchange gains and losses arising on Euro denominated loans
designated as cash flow hedges are recognised in the foreign currency hedge
reserve. Unrealised foreign exchange gains and losses recorded in the foreign
currency hedging reserve are systematically re-cycled through profit or loss
over the remaining term of the related loan on a straight-line basis.
The share warrants consist of 5,755,908 (30 June 2024: 5,857,408) share
warrants granted to the holder of the unsecured notes to subscribe for the
ordinary shares of the Company exercisable to 31 October 2026 at a price of
114.5 pence per share (including cashless exercise option).
AVATION PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2024
16 PRE-DELIVERY AIRCRAFT DEPOSITS PAID
30 Dec 30 Jun
2024 2024
US$'000s US$'000s
Current 10,280 8,520
Non-current 18,125 21,813
28,405 30,333
Pre-delivery aircraft deposits paid, at fair value:
At 1 July 2024/ 1 July 2023 30,333 8,139
Additions 4,536 2,268
Transfer from aircraft purchase rights - 28,500
Transfer to property, plant and equipment upon delivery of aircraft (3,395) -
Unrealised loss (3,069) (8,574)
At 31 December/30 June 28,405 30,333
17 AIRCRAFT PURCHASE RIGHTS
31 Dec 30 Jun
2024 2024
US$'000s US$'000s
Aircraft purchase rights, at fair value:
At 1 July 2024/ 1 July 2023 112,780 85,820
Unrealised (loss)/gain (12,320) 55,460
Transfer to pre-delivery aircraft deposits paid - (28,500)
At 31 December/30 June 100,460 112,780
The Group has determined that it would seek to dispose of excess aircraft
purchase rights over and above its requirement to acquire additional aircraft
for its fleet. The Group accounts for aircraft purchase rights at fair value
through profit or loss.
AVATION PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2024
18 INVESTMENT IN EQUITY, FAIR VALUE THROUGH PROFIT OR LOSS
31 Dec 30 Jun
2024 2024
US$'000s US$'000s
Non-listed equity, at fair value
At 1 July 2024/ 1 July 2023 10,745 11,235
Unrealised loss (124) (490)
At 31 December/30 June 10,621 10,745
The Group received 8,014,602 ordinary shares from an
airline customer as part of the airline's restructuring plan during the year
ended 30 June 2022. The Group entered into an agreement to exchange 8,014,602
ordinary shares in Philippine Airlines, Inc. with 124,787,353 ordinary shares
in PAL Holdings, Inc. during the previous year. The exchange of shares has
been completed on January 2025.
19 SHARE CAPITAL AND TREASURY SHARES
(a) Share capital
31 Dec 2024 30 Jun 2024
No of shares US$'000s No of shares US$'000s
Allotted, called up and fully paid
Ordinary shares of 1 penny each:
At 1 July 2024/ 1 July 2023 70,878,124 1,182 70,883,124 1,182
Issue of shares 3,793,762 48 60,000 1
Cancellation - - (65,000) (1)
At 31 December/30 June 74,671,886 1,230 70,878,124 1,182
During the period, the Company issued 3,793,762 ordinary shares of 1 penny
each at exercise prices ranging from 102 pence to 130 pence following the
exercise of warrants by warrant holders raising total gross proceeds of US$6.1
million.
The holders of ordinary shares (except for treasury shares) are entitled to
receive dividends as and when declared by the Company. All ordinary shares
carry one vote per share without restrictions.
AVATION PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2024
19 SHARE CAPITAL AND TREASURY SHARES (continued)
(b) Treasury shares
31 Dec 2024 30 Jun 2024
No of shares US$'000s No of shares US$'000s
At 1 July 2024/ 1 July 2023 - - - -
Acquired during the period 7,800,000 14,962 65,000 95
Cancellation - - (65,000) (95)
At 31 December/30 June 7,800,000 14,962 - -
During the six months ended 31 December 2024, the Company bought 7,800,000
treasury shares at a market price of 150 pence per share.
(c) Net asset value per share
31 Dec 2024 30 Jun
2024
Net asset value per share (US$)((1)) $3.67 $3.62
Net asset value per share (GBP)((2)) £2.94 £2.85
((1)) Net asset value per share is total equity divided by the total number
of shares issued and outstanding at period end.
((2)) Based on GBP:US$ exchange rate as at 31 December 2024 of 1.25 (30 June
2024: 1.27).
AVATION PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2024
20 LOANS AND BORROWINGS
31 Dec 30 Jun
2024 2024
US$'000s US$'000s
Secured borrowings 328,666 372,785
Unsecured notes 309,776 302,309
Total loans and borrowings 638,442 675,094
Less: current portion (55,948) (49,668)
Non-current loans and borrowings 582,494 625,426
Maturity Weighted average interest rate per annum
31 Dec 30 Jun 2024 31 Dec 30 Jun 2024
2024 2024
% %
Secured borrowings 2025-2031 2025-2031 4.85% 4.80%
Unsecured notes 2026 2026 8.25% 8.25%
Secured borrowings are secured by first ranking mortgages over the relevant
aircraft, security assignments of the Group's rights under leases and other
contractual agreements relating to the aircraft, charges over bank accounts in
which lease payments relating to the aircraft are received and charges over
the issued share capital of certain subsidiaries.
AVATION PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2024
21 MAINTENANCE RESERVES
31 Dec 30 Jun
2024 2024
US$'000s US$'000s
Current:
Maintenance reserves 34,004 62,153
Non-current:
Maintenance reserves 78,134 53,817
Maintenance lease contribution 19,453 19,453
97,587 73,270
Total maintenance reserves 131,591 135,423
31 Dec 30 Jun
2024 2024
US$'000s US$'000s
At 1 July 2024/ 1 July 2023 135,423 113,489
Contributions 17,129 34,152
Utilisations (5,004) (6,285)
Released to profit or loss (9,270) (5,933)
Transfer to buyer (6,687) -
At 31 December/30 June 131,591 135,423
During the six months ended 31 December 2024, maintenance reserves of US$9.3
million were released to profit or loss as income.
22 CAPITAL COMMITMENTS
Capital expenditure contracted for at the reporting
date but not recognised in the financial statements is as follows:
31 Dec 30 Jun
2024 2024
US$'000s US$'000s
Property, plant and equipment 229,268 249,481
Capital commitments represent amounts due under contracts entered into by the
Group to purchase aircraft. The company has paid deposits towards the cost of
these aircraft which are included in pre-delivery aircraft deposits paid.
As at 31 December 2024, the Group has commitments to purchase eleven ATR
72-600 aircraft from the manufacturer with expected delivery dates ranging
from 2025 to 2028.
AVATION PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2024
23 CONTINGENT LIABILITIES
There were no material changes in contingent
liabilities since 30 June 2024.
24 DIVIDENDS
31 Dec 31 Dec
2024 2023
US$'000s US$'000s
Paid during the period:
Dividends on ordinary shares
-Final (one-tier) dividend for 0.63 US cents (31 December 2023: Nil) per share 450 -
Dividends are recognised as liabilities when they are approved for payment.
25 SUBSEQUENT EVENTS
Subsequent to the period end, the Group has signed a Term Loan A-style US$85
million expandable portfolio financing facility (the "Facility") in
collaboration with a major international bank. This strategic Facility will
initially support the refinancing of select aircraft in Avation's fleet, with
the flexibility to finance additional aircraft, subject to lender approval.
AVATION PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2024
PRINCIPAL RISKS
The Group's risk management processes bring greater judgement to decision
making as they allow management to make better, more informed and more
consistent decisions based on a clear understanding of risk involved. We
regularly review the risk assessment and monitoring process as part of our
commitment to continually improve the quality of decision-making across the
Group.
The principal risks and uncertainties which may affect the Group in the second
half of the financial year will include the typical risks associated with the
aviation business, including but not limited to any downturn in the global
aviation industry, fuel costs, finance costs, war and extremism and the like
which may affect our airline customers' ability to fulfil their lease
obligations.
The business also relies on its ability to source finance on favourable terms.
Should this supply of finance contract, it would limit our fleet expansion and
therefore growth.
GOING CONCERN
After making enquiries, the directors have a reasonable expectation that the
Group has adequate resources to continue in operational existence for the
foreseeable future. For this reason they continue to adopt the going concern
basis in preparing the financial statements. The financial risk management
objectives and policies of the Group and the exposure of the Group to credit
risk and liquidity risk are discussed in the annual report for the Group for
the year ended 30 June 2024.
DIRECTORS
The directors of Avation PLC are listed in its Annual Report for the year
ended 30 June 2024. A list of the current directors is maintained on the
Avation PLC website: www.avation.net (http://www.avation.net)
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors confirm that, to the best of their knowledge, this condensed
consolidated interim financial information have been prepared in accordance
with UK-adopted IAS 34 and that the interim management report herein includes
a fair review of the information required by DTR 4.2.7 and DTR 4.2.8 namely
· an indication of important events that have occurred during the
first six months and their impact on the Interim Report, and a description
required by the principal risks and uncertainties for the remaining six months
of the financial year; and
· material related party transactions in the first six months and
any material changes in the related party transactions described in the last
annual report.
By order of the Board
Jeff Chatfield
Executive Chairman
Singapore, 24 February 2025
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