REG - Avation PLC - UNAUDITED RESULTS FOR YEAR ENDED 30 JUNE 2024
26/09/2024 07:00
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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 30 June 2024 30 June 2023
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
(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$" amounts in this release are US Dollar amounts unless stated
otherwise. Certain comparative amounts have been reclassified to conform with
the current year presentation.
-ENDS-
Enquiries:
Avation PLC - Jeff Chatfield, Executive
Chairman
+65 6252 2077
Avation welcomes shareholder questions and comments and advises the email
address is: investor@avation.net
More information on Avation is available at www.avation.net
(http://www.avation.net) .
AVATION PLC
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE YEAR ENDED 30 JUNE 2024
2024 2023
(Restated)
US$'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$'000s
Profit from continuing operations 19,735 12,944
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss:
Net (loss)/gain on cash flow hedge, net of tax (4,568) 410
(4,568) 410
Items that may not be reclassified subsequently to profit or loss:
Revaluation loss on property, plant and equipment, net of tax (3,421) (966)
Other comprehensive income, net of tax (7,989) (556)
Total comprehensive income for the year 11,746 12,388
Total comprehensive income attributable to:
Shareholders of Avation PLC 11,746 12,387
Non-controlling interests - 1
11,746 12,388
AVATION PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS OF 30 JUNE 2024
30 June 2024 30 June 2023 1 July2022
(Restated) (Restated)
US$'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 1 July 2022
(Restated) (Restated)
US$'000s US$'000s US$'000s
EQUITY AND LIABILITIES
Equity
Share capital 1,182 1,182 1,203
Share premium 70,120 70,024 67,681
Treasury shares - - (7,811)
Merger reserve 6,715 6,715 6,715
Asset revaluation reserve 47,343 50,764 51,730
Capital reserve 8,876 8,876 8,876
Other reserves 11,210 15,069 14,174
Retained earnings 110,944 91,295 86,067
Equity attributable to shareholders of Avation PLC 256,390 243,925 228,635
Non-controlling interests 7 7 6
Total equity 256,397 243,932 228,641
Non-current liabilities
Loans and borrowings 625,426 694,575 764,230
Trade and other payables 18,487 20,185 18,274
Derivative financial liabilities 2,037 1,632 1,055
Maintenance reserves 73,270 52,033 73,754
Deferred tax liabilities 34,047 26,694 25,613
753,267 795,119 882,926
Current liabilities
Loans and borrowings 49,668 61,401 63,900
Trade and other payables 18,920 17,167 15,940
Maintenance reserves 62,153 61,456 10,156
Income tax payable 1,916 521 658
132,657 140,545 90,654
Liabilities directly associated with assets held for sale - - 14,799
132,657 140,545 105,453
Total equity and liabilities 1,142,321 1,179,596 1,217,020
AVATION
PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
Attributable to shareholders of Avation PLC
Share capital Share Treasury Merger reserve Asset revaluation reserve Capital reserve Other Retained earnings Total Non-controlling interest Total
premium Shares reserves equity
US$'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
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 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$'000s
Balance at 1 July 2022 as previously reported 1,203 67,681 (7,811) 6,715 51,730 8,876 14,174 84,519 227,087 6 227,093
Effects of changes in accounting policies
- - - - - - - 1,548 1,548 - 1,548
Balance at 1 July 2022 as restated
1,203 67,681 (7,811) 6,715 51,730 8,876 14,174 86,067 228,635 6 228,641
Profit for the year - - - - - - - 12,943 12,943 1 12,944
Other comprehensive income - - - - (966) - 410 - (556) - (556)
Total comprehensive income - - - - (966) - 410 12,943 12,387 1 12,388
Issue of shares 18 2,343 - - - - (506) - 1,855 - 1,855
Purchase of treasury shares - - (94) - - - - - (94) - (94)
Cancellation of treasury shares (39) - 7,905 - - - 39 (7,905) - - -
Share warrant expense - - - - - - 1,142 - 1,142 - 1,142
Total transactions with owners recognised directly in equity
(21) 2,343 7,811 - - - 675 (7,905) 2,903 - 2,903
Expiry of share warrants - - - - - - (190) 190 - - -
Total others - - - - - - (190) 190 - - -
Balance at 30 June 2023 1,182 70,024 - 6,715 50,764 8,876 15,069 91,295 243,925 7 243,932
AVATION PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2024
2024 2023
(restated)
US$'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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