19th Feb 2015 13:39
LONDON (Alliance News) - Aircraft leasing company Avation PLC posted Thursday a decline in pretax profit for its first half, but expressed confidence it can achieve continued and sustainable growth in 2015 and 2016, and expects additional growth in lease revenue from future aircraft acquisitions.
In the half year to end-December 2014, Avation reported pretax profit of USD7.0 million, down from USD7.9 million a year before, as a rise in revenue to USD27.7 million from USD24.6 million was offset by higher administrative expenses. Also, in the previous year, Avation posted a USD1.4 million exceptional profit from the sale of property, plant and equipment.
The company currently has an aircraft fleet of 29 aircraft generating a gross rental yield of around 13%. It secured the sale and leaseback of two new Airbus A321 jet aircraft with Thomas Cook Group PLC during the half year. The delivery of these aircraft is scheduled for 2016.
The company has 13 aircraft scheduled to be delivered between now and the end of 2016, it said.
"The board is confident that this increase in the scale of the business combined with the significant reduction in average cost of debt across the fleet will continue to provide sustainable growth and drive future earnings," said Chairman Jeff Chatfield.
Meanwhile, Avation's subsidiary Capital Lease Aviation PLC, which was incorporated by Avation in 2007 to own and lease a portfolio of commercial jet aircraft, posted Thursday a pretax profit of USD1.2 million, down from USD1.3 million on lower revenue of USD5.9 million from USD6.2 million.
Capital Lease said it has a positive outlook for future periods, as it expects to benefit from its recently reduced cost of capital.
"The board remains optimistic and will continue to evaluate opportunities to grow the company," Capital Lease said in a statement.
Shares in Avation are trading down 8.2% at 128.00 pence, while Capital Lease is trading up 4.4% at 21.00 pence.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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