Avation PLC (LON:AVAP) is confident of delivering another year of growth after solid 2018 results as it focuses on expanding its fleet and attracting new airline customers.
In the year to 30 June 2018, the commercial passenger aircraft leasing company said revenue increased by 16% to US$109.1mln from US$94.2mln last year after adding five new aircraft.
"The performance of Avation showed growth consistent with an increase in fleet assets and record high monthly lease rental collections as at 30 June 2018,” said 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.”
Investing in growth
Avation used the proceeds generated by sales of aircraft in the previous year to grow its fleet in 2018. This included investments in twin-aisle Boeing 777-300ER and Airbus A330-300 aircraft alongside new technology narrow-body Airbus A220-300 aircraft.
It also reduced the risks associated with its portfolio of aircraft through repositioning of the fleet, growth and diversification.
"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 2018 with no operating leases expiring until 2021,” Chatfield said.
"Added scale and diversification delivered credit enhancement that saw credit rating upgrades from both S&P and Fitch Ratings and also allowed the issuance of $300 million 6.5% Senior Notes due 2021, which extended debt maturity duration and lowered Avation's average cost of debt compared to the previous financial year,” Chatfield said.
Profit before tax fell to US$18.92mln from US$21.36mln but this was due to one-off items. Fleet assets increased by 38% to US$1.03bn. The net asset value per share grew by 12% to US$3.64.
Shareholders rewarded with dividend hike
Reflecting its confidence in the outlook, Avation bumped up its dividend for the year to 7.25 cents from 6 cents the year before.
For the 2019 fiscal year, Avation believes it can continue to attract airline customers, acquire aircraft and obtain the required funding for growth.
“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,” Chatfield said.