Avation PLC (LON:AVAP) ended its financial year flying high with its results revealing the aircraft leasing company achieved both record revenues and profits.
Investors were rewarded with a bumper dividend pay-out, while two transactions during the 12 months ended June 30 pointed to potential hidden value in the plane portfolio.
The latter first: Avation sold two narrow-body aircraft for more than a 10% premium over their book value.
Narrow-body planes make up half the portfolio
As chairman Jeff Chatfield pointed out: “Narrow-body aircraft represent almost half of the fleet by value.
“This confirms that Avation's fleet assets are liquid and supports management's view that the group's net realisable value per share exceeds the reported net asset value per share.”
The NAV at the period end was 361 cents a share (295p), which means the shares are currently trading at a modest discount to that figure.
Company in growth mode
The numbers, meanwhile, revealed a company firmly in growth mode, with lease rental revenue up 21% at US$117.7mln, giving net profit of US$25.7mln, up 28%. Both were records.
The total payout rose 45% to 10.5 cents, putting Avation on a dividend yield of 3.1%.
The company’s fleet assets were worth US$1.27bn at the year-end, a rise of 22%, while the average weighted cost of its debt fell to 4.6% from 5% this time last year.
It added 12 new aircraft to its roster during the year, while offloading the aforementioned two narrow-bodied aircraft. It means the fleet now numbers 48 with an average age of 3.4 years and weighted average lease term of 7.5 years, down from 7.7 years.
Continued expansion on the horizon
Turning to the outlook, chairman Chatfield said: "Avation will continue to focus on growing the fleet and adding new airline customers in the coming financial year.”
He added the business is currently assessing jet aircraft for acquisition, in addition to scheduled deliveries of new ATR 72 turboprops, which form the backbone of the fleet.