TIDMAVAP
RNS Number : 1829P
Avation PLC
15 November 2016
AVATION PLC
("Avation" or "the Company")
AGM STATEMENT, DIVIDEND CURRENCY ELECTION AND TRADING UPDATE
Avation PLC (AVAP: LSE), the commercial passenger aircraft
leasing company announces its dividend currency will be United
States Dollars ("USD") and advises that Jeff Chatfield, Executive
Chairman, will provide the following Chairman's address, including
an Interim Management Statement and Trading Update at the Company's
Annual General Meeting today.
DIVIDEND CURRENCY ELECTION
Avation's functional currency is the USD. All of Avation's
assets, liabilities and revenues are denominated in USD. Avation's
Board of Directors has resolved to declare and pay future dividends
in USD.
Going forward, the default currency for payment of dividends
will be USD. However, shareholders will be provided the opportunity
to elect to receive dividends in British Pounds, or in other
currencies, by advising Computershare, the Company's share
registrar.
INTERIM MANAGEMENT STATEMENT AND TRADING UPDATE
DISCLAIMER: Please note that certain statements in this
announcement are forward-looking statements including without
limitation, statements regarding future operations and performance,
revenues, operating expenses, other income and expense items. These
statements and any projection as to the Company's future
performance represent management's estimates of future results and
speak only as of today. These estimates involve risks and
uncertainties that could cause actual results to differ materially
from expectations. Further information on the factors and risks
that may affect Avation's business is included in Avation's
regulatory announcements from time to time, including results
announcements. Avation assumes no obligation to update any
forward-looking statements or information in light of new
information or future events. Unauthorized recording of this
transmission is not permitted.
Jeff Chatfield, Executive Chairman, will address the Annual
General Meeting as follows:
"We are pleased to provide investors with an update on current
operations. This statement concerns the period from 1 July 2016
through to today. Avation is a commercial aircraft lessor. We focus
on narrowbody commercial jet and turboprop aircraft on long term
leases. Avation's strategy is characterised by the pursuit of
owning new and relatively new aircraft on long term leases and
selling off mid-life and older aircraft. The Company's business
model has a history of delivering profitability while
simultaneously mitigating some of the risks inherent to the
aircraft leasing sector.
"The financial results for the last financial year 2016 included
reporting lease revenues increasing 25% to $71.2 million and total
profit after tax increasing 37.6% to $18.3 million year-on-year. We
now comment on our progress since the end of the financial year. In
this 2016-2017 financial year to date two brand new Airbus A321
jets have been added to the fleet with two mid-life Airbus A321
jets and one new Airbus A321 being sold. The brand-new aircraft was
sold on delivery for risk mitigation reasons.
"As a result of trading activity, Avation's fleet stands at 38
aircraft. Importantly, as a result of the acquisition of new
aircraft and the sale of older aircraft, Avation's fleet metrics
have continued to improve since the end of the financial year. As
at 1 November the weighted average age of the fleet declined to 3.3
years and the weighted average lease term has increased to 7.6
years.
"Avation has achieved significant progress in building and
diversifying its aircraft fleet, and will continue this growth
during the remainder of the current period with a further two new
Airbus A321 jets to VietJet Air scheduled for delivery before 31
December 2016. As scale and diversification are delivered into our
aircraft fleet, we will strive to lower the cost of debt, which
improves the profitability of our existing leasing business and
enables Avation to be more competitive in our mission to attract
new airline customers.
"We continue to deliver economies of scale as the proportion of
administration expense to fleet value continues to decline. We are
pleased to report that Avation has a skilled and experienced team
in place and a platform that can support further growth in fleet
assets.
"Last month, Avation announced that it had received an
expression of interest for the purchase of 22 of its ATR turboprop
aircraft. This portfolio comprises relatively new aircraft with an
average remaining lease term of approximately 6.3 years which are
leased to a number of airlines in Europe, Asia and Australia. The
portfolio generates high lease yields.
"Since the approach, Avation has announced the appointment of a
financial adviser to evaluate the proposal and also engage with the
wider investor market to determine the value of the portfolio. The
size of the portfolio makes it an attractive acquisition for a
range of both strategic industry and financial investors.
"For clarity and certainty, the board advises shareholders that
no decision had been made to sell this highly valuable portfolio.
The unexpired revenue for the 22 aircraft is in excess of $305
million as at 1 November 2016. The Board is considering and
responding to an offer. There is no guarantee that a transaction
will occur or even if an acceptable valuation can be achieved.
Approval for any transaction would be sought from shareholders for
an eventual bid which the Board determines to be acceptable.
Shareholder approval would only be sought if the proposed
transaction delivers a significant premium to book value for these
assets. The timing for receipt of proposals is before the end of
this calendar year.
"Avation remains committed to the ATR turboprop aircraft type.
Avation is not currently proposing to divest itself of its future
order and delivery options for further ATR aircraft which would
allow Avation to rebuild a turboprop portfolio.
"Should a sale of the portfolio be concluded, the Board would
consider a dividend for part of the proceeds from the profit on the
sale of the portfolio assets to shareholders immediately following
conclusion of the transaction. Avation would then seek to reinvest
the remainder of the proceeds into replacement aircraft assets that
would rebuild the fleet and add further diversification and new
airline customers.
"The Board observes that Avation PLC ordinary shares are
presently trading at a discount to the net tangible assets. It is
therefore appropriate and in the interests of shareholders to
consider asset sales that generate a premium to book value as a way
of delivering enhanced shareholder returns.
"The value proposition of a commercial aircraft lessor such as
Avation is the ability to trade aircraft, access and acquire
aircraft, manage and market aircraft to airlines and attach leases
to these assets to produce returns to shareholders.
"Avation will release further information regarding the proposed
transaction or any material events occurring, but stresses that at
this time no decision has been made.
"We would like to thank our shareholders for their continuing
support."
-ENDS-
More information on Avation can be seen at: www.avation.net
Enquiries:
Avation T: +65 6252 2077
Jeff Chatfield, Executive
Chairman
Notes to Editors:
Avation PLC is a commercial passenger aircraft leasing company
owning and managing a fleet of jet and turboprop aircraft which it
leases to airlines across the world. The Company's customers
include Vietjet, Thomas Cook, Air France, Condor, Air Berlin,
Flybe, Air India, Virgin Australia, Fiji Airways and UNI Air.
Avation is the second largest lessor customer of ATR turboprop
aircraft globally and the Company is one of a small number of
aircraft lessors which have both a sales contract and option
positions with ATR.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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