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Avation sees solid growth in first half
28th Feb 2020 14:26
(Sharecast News) - Commercial passenger aircraft leasing company Avation reported a 15% improvement in its revenue for the first half on Friday, to a record $67.6m (?52.66m).
The London-listed firm said its profit before tax was ahead 218% for the six months ended 31 December, at $45.2m, while its profit after tax rose 180% year-on-year to $38.2m.
Earnings per share were 178% higher at 60 US cents.
Avation said its net asset value per share grew by 15% to $4.29, and its board declared a dividend for the first half of 2.1 cents per share, which was 5% higher than the interim distribution in 2019.
On the operational front, the company noted the repossession of two aircraft from the defunct Thomas Cook, which it had transitioned to a new lessee.
Three new ATR 72-600 regional aircraft were acquired during the half-year, and the firm also completed finance leases and transferred two Fokker 100 aircraft to a lessee.
Leases were signed for five ATR 72-600 aircraft to be delivered to the Swedish regional airline Braathens by 30 June, with the company's total airline customers increasing to 18.
Avation also highlighted that the first ever commercial aircraft financed with a green loan was completed during the half-year, which was recognised by Airline Economics as the 'Deal of the Year for Innovation'.
"Avation posted record lease rental revenue and assets for the period ended 31 December," said executive chairman Jeff Chatfield.
"Most importantly the customer base continued to expand. In response to a proposal from an interested party the company appointed an adviser and announced a strategic review and formal sale process.
"Upon completion of the strategic review and formal sale process the board will consider the recommendations and provide further comment."
Chatfield noted that during the period, Avation repossessed two Airbus A321 aircraft from Thomas Cook and transitioned the aircraft to a new lessee.
"While the airline sector performed profitably as a whole, 2019 saw a record number of airline insolvencies.
"Avation's limited exposure to Thomas Cook and lack of exposure to other airline failures results from increased scale and diversification and the application of stringent investment criteria."
He also said that recognition of its purchase rights for ATR 72-600 aircraft in the financial statements highlighted the value of the previously-unrecorded asset, which generated a one-off unrealised gain of $37m.
"It is important to note that notwithstanding the impact of the recognition of purchase rights for ATR 72-600 aircraft, the leasing business continued to grow.
"The company's strong performance enabled the board to declare an interim dividend of 2.1 US cents per share for the period."
Chatfield said Avation was in a "strong" cash position, with four new aircraft expected to be added to the fleet through deliveries to Braathens and US Bangla between now and 30 June.
"The company believes it has sufficient liquidity to fund further fleet growth which will be sourced from the orderbook for ATR 72-600 aircraft and through aircraft acquisition."
At 1421 GMT, shares in Avation were up 1.52% at 259.9p.
The London-listed firm said its profit before tax was ahead 218% for the six months ended 31 December, at $45.2m, while its profit after tax rose 180% year-on-year to $38.2m.
Earnings per share were 178% higher at 60 US cents.
Avation said its net asset value per share grew by 15% to $4.29, and its board declared a dividend for the first half of 2.1 cents per share, which was 5% higher than the interim distribution in 2019.
On the operational front, the company noted the repossession of two aircraft from the defunct Thomas Cook, which it had transitioned to a new lessee.
Three new ATR 72-600 regional aircraft were acquired during the half-year, and the firm also completed finance leases and transferred two Fokker 100 aircraft to a lessee.
Leases were signed for five ATR 72-600 aircraft to be delivered to the Swedish regional airline Braathens by 30 June, with the company's total airline customers increasing to 18.
Avation also highlighted that the first ever commercial aircraft financed with a green loan was completed during the half-year, which was recognised by Airline Economics as the 'Deal of the Year for Innovation'.
"Avation posted record lease rental revenue and assets for the period ended 31 December," said executive chairman Jeff Chatfield.
"Most importantly the customer base continued to expand. In response to a proposal from an interested party the company appointed an adviser and announced a strategic review and formal sale process.
"Upon completion of the strategic review and formal sale process the board will consider the recommendations and provide further comment."
Chatfield noted that during the period, Avation repossessed two Airbus A321 aircraft from Thomas Cook and transitioned the aircraft to a new lessee.
"While the airline sector performed profitably as a whole, 2019 saw a record number of airline insolvencies.
"Avation's limited exposure to Thomas Cook and lack of exposure to other airline failures results from increased scale and diversification and the application of stringent investment criteria."
He also said that recognition of its purchase rights for ATR 72-600 aircraft in the financial statements highlighted the value of the previously-unrecorded asset, which generated a one-off unrealised gain of $37m.
"It is important to note that notwithstanding the impact of the recognition of purchase rights for ATR 72-600 aircraft, the leasing business continued to grow.
"The company's strong performance enabled the board to declare an interim dividend of 2.1 US cents per share for the period."
Chatfield said Avation was in a "strong" cash position, with four new aircraft expected to be added to the fleet through deliveries to Braathens and US Bangla between now and 30 June.
"The company believes it has sufficient liquidity to fund further fleet growth which will be sourced from the orderbook for ATR 72-600 aircraft and through aircraft acquisition."
At 1421 GMT, shares in Avation were up 1.52% at 259.9p.