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Avation reports strong cash balance as airline customers return to the skies

“The company is fortunate that some of its largest customers are in countries where there has been comparatively lower impact from the pandemic,” said executive chairman Jeff Chatfield

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Avation PLC (LON:AVAP) has reported a strong cash balance and said some of its main airline customers are returning to service as coronavirus travel restrictions are loosened.

At the end of March, the aircraft leasing group had a cash balance of US$131.6mln, said executive chairman Jeff Chatfield in the group's third quarter report.

READ: Avation inks leasing agreements five former Virgin Australia aircraft

Chatfield added: "Immediately at the outset of the COVID-19 pandemic Avation instituted a programme of support for some of its airline customers to defer for later payment certain portions of their rent in the short term. The cashflow impact of this support programme has been mitigated by adjusting the amortisation profiles of the relevant financings with the agreement of lenders.”

The executive chairman said the company has also looked to maximise cashflow by cutting admin costs and pausing capital expenditure.

“The company is fortunate that some of its largest customers are in countries where there has been comparatively lower impact from the pandemic,” he added. 

Certain customers returning to service includes VietJet of Vietnam, Latvia-based airBaltic and Taiwan’s EVA Air and Mandarin Airlines, which together represent more than 60% of Avation's future unearned contracted leasing revenue.

Results for the nine months to March 31, which Chatfied said were being released as one-off to provide updated information about the business’s financial position amid the uncertain times in financial markets, showed pre-tax profit up 173% to US$46.6mln on revenue up 14% to US$99.6mln.

Net asset value per share increased by 10% to 324p. 

Quick facts: Avation PLC

Price: 132 GBX

LSE:AVAP
Market: LSE
Market Cap: £82.72 m
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