REG - Avation PLC - UNAUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2023
28/09/2023 07:00
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RNS Number : 8676N Avation PLC 28 September 2023
AVATION PLC
("Avation" or "the Company")
UNAUDITED Results for the YEAR ended 30 JUNE 2023
Avation PLC (LSE: AVAP), the commercial passenger aircraft leasing company,
announces unaudited results for the year ended 30 June 2023.
Financial Highlights
· Revenue and other income for the year was $99.3 million, fleet assets
were $898.6 million and total assets were $1,179.6 million;
· Net indebtedness reduced by 7.8% to $731.2 million (2022: $792.9
million);
· Total cash and bank balances of $116.9 million (2022: $119.2
million);
· Operating profit of $70.6 million (2022: $90.2 million);
· Profit after tax of $12.2 million (2022: $17.1 million);
· Earnings per share of 17.4 cents (2022: 24.7 cents); and
· South-East Asian airline reduces arrears by $5.1 million since 30
June 2023.
Operational Activity
· Two ATR 72-600 turboprop aircraft and a Boeing 737-800 aircraft were
sold during the year;
· One ATR 72-600 aircraft was repossessed from an airline in Myanmar
and subsequently commenced a new lease with an airline in Tahiti;
· One off-lease ATR 72-500 started a lease with a new airline customer
in Nepal;
· Avation received a creditors distribution of $3.4 million from Virgin
Australia;
· Two Airbus A220-300 aircraft were re-financed with fixed rate
long-term loans, reducing Avation's exposure to interest rate changes;
· The Company entered into an agreement to sell an eleven-year-old
off-lease ATR 72-600; and
· The Company entered into a lease agreement for a second
eleven-year-old off-lease ATR 72-600 which is expected to commence in November
2023.
Executive Chairman, Jeff Chatfield, said:
"During the year ended 30 June 2023 Avation reduced the number of off-lease
aircraft in the fleet from six to two by transitioning or selling off-lease
aircraft. Avation has agreed to sell or lease both remaining off-lease
aircraft and on completion of these transactions will have a fully utilised
fleet.
Avation has continued to de-lever its balance sheet, achieving a reduction to
62.0% in the ratio of net debt to total assets as at 30 June 2023. A
significant portion of the cashflow generated by the fleet is directed towards
repayments of debt. Scheduled loan repayments for the 2024 financial year,
amounting to around US$62 million, exceed expected depreciation of the fleet
over the same period. The Company is hedged against further interest rate
changes on 95.8% of its loans and borrowings.
A bond repurchase tender was concluded in February, resulting in the
repurchase and retirement of US$7.1m of Avation Capital S.A. 8.25%/9.0%
unsecured notes. The Company may pursue other liability management exercises
from time to time with the aim of further reducing the cost and/or outstanding
amount of unsecured debt in issue.
After the recovery from the COVID-19 pandemic, Avation plans to re-grow its
business in a prudent and sensible manner. We will target organic growth,
which includes leasing the two ATR aircraft we have on order for delivery in
2024. We have paid all pre-delivery payments for the two ordered aircraft
and believe that the balance due on delivery can be funded with senior secured
debt. Avation has a significant purchase rights position on a stream of new
ATR 72 aircraft. The manufacturer expects that, with a new engine variant,
these aircraft will be approved for use with sustainable aviation fuel in
2025. The Company believes that the ATR 72 aircraft is the most
sustainable commercial aircraft type currently available.
The Company has significantly lowered overheads by reducing headcount and
actively managing legal expenses and other expenditure.
Few aircraft were built during the COVID-19 pandemic so lessors that own them
have seen positive developments in valuations. As a result, Avation has been
able to reverse around US$3.3 million of previously recognised impairment
charges and has seen a positive impact on the valuation of our 28 purchase
rights for ATR aircraft.
We are reasonably confident that the Company will be able to arrange leases
for the two new aircraft ordered for delivery in 2024."
Financial Summary
US$ '000s Year ended 30 June,
2023 2022
Revenue 91,861 112,232
Other income 7,389 4,152
99,250 116,384
Operating profit 70,633 90,184
Profit before tax 13,000 22,502
Profit after tax 12,192 17,127
EPS (basic) 17.43c 24.65c
US$ '000s 30 June,
2023 2022
Fleet assets (1) 898,616 987,995
Total assets 1,179,596 1,217,020
Cash and bank balances (2) 116,905 119,171
Unrestricted cash and cash equivalents 24,816 35,267
Net asset value per share (US$) (3) US$3.41 US$3.27
Net asset value per share (GBP) (4) £2.69 £2.68
1. Fleet assets are defined as property, plant and equipment plus assets
held for sale plus finance lease receivables.
2. Cash and bank balances as at 30 June 2023 comprise cash and cash
equivalents of US$24.8 million (30 June 2022: US$35.3 million), investment in
fixed deposits of US$1.2 million (2022: nil) and restricted cash balances of
US$90.9 million (30 June 2022: US$83.9 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 2023 of 1.27 (30 June
2022:1.22).
Aircraft Fleet
Aircraft Type 30 June 2023 30 June 2022
ATR 72-600 16 18
ATR 72-500 5 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
Boeing 737-800NG - 1
Total 36 39
At 30 June 2023, Avation's fleet comprised 36 aircraft, including five
aircraft on finance lease. Avation serves 17 customers in 14 countries. The
weighted average age of the fleet is 6.4 years (30 June 2022: 5.6 years) and
the weighted average remaining lease term is 5.0 years (30 June 2022: 5.7
years).
Two ATR 72-600 and one Boeing 737-800 aircraft were sold during the period.
Turboprop and narrowbody aircraft make up 82% of fleet assets as at 30 June
2023. Fleet assets have decreased 9.0% to US$898.6 million (30 June 2022:
US$988.0 million) as a result of aircraft sales and depreciation. As at the
date of this report, Avation has two off-lease aircraft. One of these
aircraft is expected to commence a new lease in November 2023 and the
remaining aircraft is subject to an agreed sale which is expected to complete
shortly.
Avation has orders for two new ATR 72-600 aircraft and purchase rights for a
further 28 aircraft as at 30 June 2023. The order-book and purchase rights
provide a pathway to organic fleet growth.
Debt summary
US$ '000s 30 June,
2023 2022
Current loans and borrowings 61,401 63,900
Non-current loans and borrowings 694,575 764,230
Total loans and borrowings 755,976 828,130
Unrestricted cash and bank balances 24,816 35,267
Net indebtedness (1) 731,160 792,863
Net debt to total assets (2) 62.0% 65.1%
Weighted average cost of secured debt (3) 4.5% 4.0%
Weighted average cost of total debt (4) 6.1% 5.7%
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 7.8% to US$731.2 million (30
June 2022: US$792.9 million). Two aircraft previously financed under the
Group's floating rate warehouse loan facility were re-financed with long-term
fixed rate debt, reducing exposure to changes in interest rates.
The weighted average cost of total debt has increased to 6.1% as at 30 June
2023 (30 June 2022: 5.7%) due to repayments of lower cost secured loans in the
period. The weighted average cost of secured debt also increased to 4.5% at 30
June 2023 (30 June 2022: 4.0%).
At the end of the financial period, Avation's net debt to total assets ratio
improved to 62.0% (30 June 2022: 65.1%). As at 30 June 2023, 95.8% of total
debt was at fixed or hedged interest rates (30 June 2022: 90.0%). The ratio of
unsecured debt to total debt was 40.1% (30 June 2022: 35.8%).
Financial Analysis
Revenue
US$ '000s Year ended 30 June,
2023 2022
Lease rental revenue 85,936 93,352
Less: amortisation of lease incentive assets (1,368) (1,383)
84,568 91,969
Interest income from finance leases 2,230 2,918
Maintenance reserves revenue 5,063 13,207
End of lease compensation revenue - 4,138
91,861 112,232
Lease rental revenue decreased by 7.9% from US$93.4 million in the year ended
30 June 2022 to US$85.9 million in the year ended 30 June 2023. The decrease
was principally due to the reduction in the number of aircraft in the fleet
from 39 at 30 June 2022 to 36 at 30 June 2023.
Interest income from finance leases decreased by 23.6% from US$2.9 million in
the year ended 30 June 2022 to US$2.2 million in the year ended 30 June
2023. The decrease was principally due to the reduction in the number of
aircraft leased on finance leases from 6 at 30 June 2022 2021 to 5 at 30 June
2023.
Other income
US$ '000s Year ended 30 June,
2023 2022
Foreign currency exchange gain 3,154 1,018
Claim recovery 3,137 -
Fees for late payment 966 1,940
Aircraft late delivery compensation - 540
Deposit released - 200
Others 132 454
7,389 4,152
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.
The claim recovery recognised in other income is the balance of a distribution
paid to creditors of Virgin Australia in excess of amounts allocated to trade
receivables.
Administrative expenses
US$ '000s Year ended 30 June,
2023 2022
Staff costs 5,587 6,771
Other administrative expenses 3,173 2,694
8,760 9,465
Staff costs reduced by 17.5% from US$6.8 million in the year ended 30 June
2022 to US$5.6 million in the year ended 30 June 2023 principally due to a
reduced average headcount, lower bonus payments and lower charges for employee
share warrants.
Other administrative expenses increased by 17.8% from US$2.7 million in the
year ended 30 June 2022 to US$3.2 million in the year ended 30 June 2023
principally due to increased marketing related travel expenses.
Other operating income and expense items
US$ '000s Year ended 30 June,
2023 2022
Depreciation (38,566) (39,304)
Gain on derecognition of a finance lease 2,792 -
Loss on disposal of aircraft and aircraft engine (1,000) (2,396)
Unrealised gain on aircraft purchase rights 20,540 38,320
Unrealised gain on equity investment 7,520 -
Reversal of/impairment (loss) on aircraft 3,287 (6,158)
Aircraft transition expenses (11,389) (5,479)
Expected credit losses (659) 1,980
Legal and professional fees (2,382) (3,698)
Depreciation reduced by 1.9% from US$39.3 million to US$38.6 million due to a
reduction in the fleet.
A gain of US$2.8 million was recognised 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.
A loss of US$1.0 million was recognised on the sale of two ATR 72-600 aircraft
during the year. A loss of US$ 2.4 million was recognised in the year ended
30 June 2022 on the sales of an Airbus A220-300, an Airbus A321-200, three ATR
72-600 aircraft and an engine.
The Company's 28 aircraft purchase rights were revalued at 30 June 2023 using
a Black-Scholes option pricing model. The principal factors leading to the
recognition of a gain of US$20.5 million (2022: US$ 38.2 million) were
increases in the appraised value of the ATR 72-600 aircraft and increases in
risk-free interest rates.
The Company recorded an unrealised gain of US$7.5 million on its holding of
shares in Philippine Airlines, Inc. 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$11.4 million (2022: US$5.5 million)
represent repairs and maintenance expenditure on aircraft repossessed
following airline defaults resulting from the COVID-19 pandemic. The Company
expects transition expenses to be substantially reduced in future periods as
most aircraft which were repossessed as a result of the COVID-19 pandemic have
now been transitioned to new lessees or sold.
Expected credit losses of US$0.7 million primarily relate to rent arrears and
a payment plan agreement loan granted to an airline in South-East Asia. In a
trading update issued on 6 July 2023 the Company advised that it was reviewing
its provisions against trade receivables. Between 30 June 2023 and the date
of this report the airline has reduced its total arrears and loan balance by
US$5.1 million.
Legal and professional fees reduced by 35.6% from US$3.7 million in the year
ended 30 June 2022 to US$ 2.4 million in the year ended 30 June 2023 due to a
reduction in transaction activity.
Finance income
US$ '000s Year ended 30 June,
2023 2022
Interest income 3,129 281
Fair value gain on financial derivatives 1 2,492
Finance income from discounting non-current deposits to fair value 611 571
Gain on repurchase of unsecured notes 508 -
Gain on early full repayment of borrowings 1,657 -
5,906 3,344
Interest income increased in the year ended 30 June 2023 due to an improved
interest rate environment for depositors. The group has proactively
transferred funds into term deposit accounts to take advantage of increased
deposit interest rates.
Interest income includes US$1.1 million interest on payment plan agreement
loans granted to a customer.
Avation generated a gain of US$0.5 million on the repurchase of US$11.4
million of Avation Capital S.A. 8.25%/9.0% unsecured notes at a discount
during the year.
A gain of US$1.7 million on early full repayment of borrowings arose when two
loans were refinanced in November 2022.
Finance expenses
US$ '000s Year ended 30 June,
2023 2022
Interest expense on secured borrowings 21,170 24,062
Interest expense on unsecured notes 30,976 29,913
Interest expense on borrowings from related parties 271 -
Amortisation of loan transaction costs 1,057 2,226
Amortisation of IFRS 9 gain on debt modification 8,711 8,805
Fair value loss on financial derivatives 577 -
Amortisation of interest expense on non-current borrowings 571 539
Finance charges on early full repayment of borrowings - 731
Others 206 1,205
63,539 67,481
Interest expense on secured borrowings reduced by 12.0% to US$21.2 million in
the year ended 30 June 2023 from US$24.1 million in the year ended 30 June
2022 as a result of net repayments of secured loans. Secured borrowings have
been paid down by US$79.4 million from US$531.9 million at 30 June 2022 to
US$452.5 million at 30 June 2023.
Interest expense on unsecured notes includes US$8.6 million (2022: US$4.3
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$8.7 million (2022: US$
8.8 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
2023 is US$345.2 million.
Interim Management Statement
The global aviation industry has continued to recover strongly from the
pandemic in 2023. In its latest update IATA reported that industry-wide
revenue passenger-kilometres (RPKs) increased 26.2% year-on-year in July,
reaching 95.6% of the traffic numbers seen in 2019. IATA also reports that
domestic air travel, a driving force in the recovery of global passenger
demand since the onset of the pandemic, reached a new all-time RPK high in
July 2023 surpassing the previous record set in July 2019.
Avation has primarily focussed on transitioning or disposing of unutilised
aircraft, maintaining liquidity, and reducing leverage in the year ended 30
June 2023. The Company recently agreed to sell one of its last two remaining
unutilised aircraft and to lease the other to a new customer airline. On
completion of these two transactions the Company's fleet will be fully
utilised for the first time since early in 2020.
The company's focus will now shift towards leasing two ATR 72-600 aircraft
from its orderbook, which are currently scheduled for delivery in April and
May 2024, and identifying opportunities to lease, finance and deliver
additional ATR aircraft 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 100% sustainable aviation fuel from
2025. Net emissions of CO2 will be reduced by 80% when using sustainable
aviation fuel.
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.
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.
Avation supports the transition of the aircraft industry towards aircraft
capable of using sustainable aviation fuel 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 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 terrorism and natural
disasters, regulatory risks from changes to government regulations and tax
laws and climate-change risks.
Results Conference Call
Avation's senior management team will host an investor update call on 28
September 2023, 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
(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 2023.
Financial information presented in this announcement is being published for
the purposes of providing preliminary Group financial results for the year
ended 30 June 2023. 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 27 September 2023.
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
2022, upon which the auditors have given an unqualified audit, were published
on 3 November 2022 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
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE YEAR ENDED 30 JUNE 2023
2023 2022
US$'000s US$'000s
Continuing operations
Revenue 91,861 112,232
Other income 7,389 4,152
99,250 116,384
Depreciation (38,566) (39,304)
Gain on derecognition of finance lease 2,792 -
Loss on disposal of aircraft and aircraft engine (1,000) (2,396)
Unrealised gain on aircraft purchase rights 20,540 38,320
Unrealised gain on equity investments 7,520 -
Reversal of/impairment (loss) on aircraft 3,287 (6,158)
Aircraft transition expenses (11,389) (5,479)
(Provision for)/reversal of expected credit losses (659) 1,980
Administrative expenses (8,760) (9,465)
Legal and professional fees (2,382) (3,698)
Operating profit 70,633 90,184
Loss on debt modification - (3,545)
Finance income 5,906 3,344
Finance expenses (63,539) (67,481)
Profit before taxation 13,000 22,502
Taxation (808) (5,375)
Profit from continuing operations 12,192 17,127
Profit attributable to:
Shareholders of Avation PLC 12,191 17,126
Non-controlling interests 1 1
12,192 17,127
Earnings per share for profit
attributable to shareholders of Avation PLC
Basic earnings per share (US cents) 17.43 24.65
Diluted earnings per share (US cents) 17.38 24.65
AVATION PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
2023 2022
US$'000s US$'000s
Profit from continuing operations 12,192 17,127
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss:
Net gain on cash flow hedge, net of tax 410 35,387
410 35,387
Items that may not be reclassified subsequently to profit or loss:
Revaluation (loss)/gain on property, plant and equipment, net of tax (966) 16,209
Other comprehensive income, net of tax (556) 51,596
Total comprehensive income for the year 11,636 68,723
Total comprehensive income attributable to:
Shareholders of Avation PLC 11,635 68,722
Non-controlling interests 1 1
11,636 68,723
AVATION PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS OF 30 JUNE 2023
2023 2022
US$'000s US$'000s
ASSETS
Non-current assets
Property, plant and equipment 845,471 813,908
Finance lease receivables 41,213 55,208
Trade and other receivables 14,258 19,388
Derivative financial assets 13,442 5,920
Aircraft purchase rights 85,820 65,280
Lease incentive assets 4,686 310
Goodwill 1,902 1,902
1,006,792 961,916
Current assets
Finance lease receivables 3,932 5,624
Trade and other receivables 31,035 13,202
Derivative financial assets 54 -
Investment in equity, fair value through profit or loss 11,235 3,715
Lease incentive assets 1,643 137
Cash and bank balances 116,905 119,171
164,804 141,849
Assets held for sale 8,000 113,255
172,804 255,104
Total assets 1,179,596 1,217,020
EQUITY AND LIABILITIES
Equity
Share capital 1,182 1,203
Share premium 70,024 67,681
Treasury shares - (7,811)
Merger reserve 6,715 6,715
Asset revaluation reserve 50,764 51,730
Capital reserve 8,876 8,876
Other reserves 15,069 14,174
Retained earnings 88,995 84,519
Equity attributable to shareholders of Avation PLC 241,625 227,087
Non-controlling interests 7 6
Total equity 241,632 227,093
Non-current liabilities
Loans and borrowings 694,575 764,230
Trade and other payables 20,185 18,274
Derivative financial liabilities 1,632 1,055
Maintenance reserves 54,587 75,131
Deferred tax liabilities 26,440 25,437
797,419 884,127
Current liabilities
Loans and borrowings 61,401 63,900
Trade and other payables 17,167 15,940
Maintenance reserves 61,456 10,156
Income tax payable 521 658
140,545 90,654
Liabilities directly associated with assets held for sale - 15,146
140,545 105,800
Total equity and liabilities 1,179,596 1,217,020
AVATION PLC
CONSOLIDATED STATEMENT OF EQUITY CHANGES
FOR THE YEAR ENDED 30 JUNE 2023
Attributable to shareholders of Avation PLC
Share capital Share premium Treasury Merger reserve Asset revaluation reserve Capital reserve Other Retained earnings Total Non-controlling interest Total
shares reserves equity
US$'000s US$'000s US$'000s US$'000s US$'000s US$'000s US$'000s US$'000s US$'000s US$'000s US$'000s
Balance at 1 July 2022 1,203 67,681 (7,811) 6,715 51,730 8,876 14,174 84,519 227,087 6 227,093
Profit for the year - - - - - - - 12,191 12,191 1 12,192
Other comprehensive income - - - - (966) - 410 - (556) - (556)
Total comprehensive income - - - - (966) - 410 12,191 11,635 1 11,636
Issue of shares 18 2,343 - - - - (506) - 1,855 - 1,855
Purchase of treasury shares - - (94) - - - - - (94) - (94)
Cancellation of treasury shares (39) - 7,905 - - - 39 (7,905) - - -
Share warrant expense - - - - - - 1,142 - 1,142 - 1,142
Total transactions with owners recognised directly in equity
(21) 2,343 7,811 - - - 675 (7,905) 2,903 - 2,903
Expiry of share warrants - - - - - - (190) 190 - - -
Total others - - - - - - (190) 190 - - -
Balance at 30 June 2023 1,182 70,024 - 6,715 50,764 8,876 15,069 88,995 241,625 7 241,632
AVATION PLC
CONSOLIDATED STATEMENT OF EQUITY CHANGES
FOR THE YEAR ENDED 30 JUNE 2022
Attributable to shareholders of Avation PLC
Share capital Share premium Treasury Merger reserve Asset revaluation reserve Capital reserve Other Retained earnings Total Non-controlling interest Total
shares reserves equity
US$'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 2021 1,203 67,681 (7,811) 6,715 37,602 8,876 (21,382) 64,058 156,942 68 157,010
Profit for the year - - - - - - - 17,126 17,126 1 17,127
Other comprehensive income - - - - 16,209 - 35,387 - 51,596 - 51,596
Total comprehensive income - - - - 16,209 - 35,387 17,126 68,722 1 68,723
Dividends paid to non-controlling interest
- - - - - - - - - (63) (63)
Share warrant expense - - - - - - 1,423 - 1,423 - 1,423
Total transactions with owners recognised directly in equity
- - - - - - 1,423 - 1,423 (63) 1,360
Release of revaluation reserve upon sale of aircraft
- - - - (2,081) - - 2,081 - - -
Expiry of share warrants - - - - - - (1,254) 1,254 - - -
Total others - - - - (2,081) - (1,254) 3,335 - - -
Balance at 30 June 2022 1,203 67,681 (7,811) 6,715 51,730 8,876 14,174 84,519 227,087 6 227,093
AVATION PLC
CONSOLIDATED STATEMENT OF CASHFLOWS
FOR THE YEAR ENDED 30 JUNE 2023
2023 2022
US$'000s US$'000s
Cash flows from operating activities:
Profit before income tax 13,000 22,502
Adjustments for:
Amortisation of lease incentive asset 1,368 1,383
Depreciation expense 38,566 39,304
Depreciation of right-of-use assets 233 218
Provision for/(reversal of) expected credit losses 659 (1,980)
Finance income (5,906) (3,344)
Finance expense 63,539 67,481
Gain on derecognition of finance lease (2,792) -
Loss on debt modification - 3,545
Loss on disposal of aircraft and aircraft engine 1,000 2,396
Interest income from finance leases (2,230) (2,918)
(Reversal of)/impairment loss on aircraft (3,287) 6,158
Share warrants expense 1,142 1,423
Foreign currency exchange gain (3,107) -
Unrealised gain on aircraft purchase rights (20,540) (38,320)
Unrealised gain on equity investments (7,520) -
Operating cash flows before working capital changes 74,125 97,848
Movement in working capital:
Trade and other receivables and finance lease receivables (3,296) 12,923
Trade and other payables 2,042 1,562
Maintenance reserves 15,503 (7,124)
Cash from operations 88,374 105,209
Finance income received 4,713 1,581
Finance expense paid (44,091) (51,700)
Income tax paid (610) (610)
Net cash from operating activities 48,386 54,480
Cash flows from investing activities:
Investment in fixed term deposits (1,225) -
Purchase of property, plant and equipment (6) (17)
Proceeds from disposal of aircraft and aircraft engine 39,750 65,636
Net cash from investing activities 38,519 65,619
Cash flows from financing activities:
Net proceeds from issuance of ordinary shares 1,855 -
Purchase of treasury shares (94) -
Dividend paid to non-controlling interest of a subsidiary - (63)
(Increase)/decrease of restricted cash balances (6,960) 13,500
Proceeds from loans and borrowings, net of transactions costs 42,958 17,060
Repayment of loans and borrowings (135,115) (140,396)
Net cash used in financing activities (97,356) (109,899)
Net (decrease)/increase in cash and cash equivalents (10,451) 10,200
Cash and cash equivalents at beginning of year 35,267 25,067
Cash and cash equivalents at end of year 24,816 35,267
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