Avation pleased with performance after redeploying capital

Commercial passenger aircraft leasing company Avation issued its preliminary unaudited financial results for the year ended 30 June on Thursday, reporting a 38% uplift in its fleet assets to $1.03bn over the course of the 12-month period.

The London-listed firm said its revenue rose 16% to $109.1m, while total profit after tax fell 5.9% to $20m.

Earnings per share decreased 11% to 32.20 US cents, while the board declared a dividend per share of 7.25 cents - an increase of 21% year-on-year.

Avation said its net asset value per share rose 12% over the prior year to $3.64 per share.

On the operational front, the board said the redeployment of the proceeds from sales of aircraft in 2017 supported the acquisition of $323m in aircraft during the year, with five aircraft added to the fleet, including three new aircraft types.

An Airbus A320 aircraft was transitioned from Air Berlin to easyJet, and the company reported six new customers, taking total airline customers to 13 as at 30 June.

The company also enjoyed an enhancement in its credit position, with upgrades in ratings from Standard & Poor's and Fitch Ratings.

It also extended its debt maturity duration, with the issue of $300m 6.5% senior notes due 2021 under its global medium-term note programme.

“The performance of Avation showed growth consistent with an increase in fleet assets and record high monthly lease rental collections as at 30 June,” said Avation executive chairman Jeff Chatfield.

“The leasing business delivered the highest revenue and profit in the history of the company when excluding one-off gains from trading.

“The directors are pleased to declare an increased interim dividend of 7.25 US cents per share.”

Chatfield noted that Avation was successful at redeploying the proceeds generated by sales of aircraft in the previous financial year, adding new aircraft and customers to further grow the fleet and diversify the revenue base.

“This included investments in twin-aisle Boeing 777-300ER and Airbus A330-300 aircraft alongside new technology narrow-body Airbus A220-300 aircraft.

“Fleet metrics improved with the average age of the fleet reduced to 3.2 years and the average remaining lease term increased to 7.7 years as at 30 June with no operating leases expiring until 2021.”

He also noted that the added scale and diversification delivered credit enhancement that saw credit rating upgrades from both S&P and Fitch, and also allowed the issuance of the $300m in senior note, which extended debt maturity duration and lowered Avation's average cost of debt compared to the previous financial year.

“Avation will continue to focus on growing the fleet and adding new airline customers in the coming financial year.

“The company is currently assessing jet aircraft for acquisition, in addition to the scheduled deliveries of new ATR 72 turboprop aircraft from our order book.”