25th Feb 2014 13:03
LONDON (Alliance News) - Avation PLC Tuesday reported higher profits for the first half of its financial year, driven by a 21% increase in revenues as it expanded its aircraft fleet, and said it is confident of sustainable growth in 2014 and beyond.
The passenger aircraft leasing company, which Monday refinanced two of the planes in its fleet at cheaper rates, reported a pretax profit of USD7.9 million in the six months to end-December, up from USD6.9 million a year earlier, as revenues rose to USD24.6 million, from USD20.2 million.
It increased its aircraft fleet to 24 in the period, from 19 a year earlier, while it also placed a firm order for five additional ATR 72 aircraft to be delivered in 2015, meaning it now has 40 aircraft under order or option for future delivery.
"The business continues to grow and perform strongly, with recent re-financing transactions releasing equity to fund further deliveries along with a warehouse facility to support lease attached aircraft acquisitions. We are confident that our strategy provides for continued and sustainable growth for the remainder of 2014 and beyond," Chairman Jeff Chatfield said in a statement.
On Monday the group, which also supplies new and refurbished aircraft parts, said it had refinanced USD33 million of senior debt secured against two ATR72 aircraft, cutting the cost of the debt by about half. It said the deal will provide an immediate boost to earnings.
Avation leases aircraft to airlines including US Airways, Virgin Australia and Thomas Cook Group PLC. Its current fleet includes 6 aircraft from the Airbus A320 family, 13 ATR 72 turboprop planes and 5 Fokker 100 aircraft. It has 13 ATR72-600 planes on order and options for 10 more of the same aircraft, according to its website.
"The Board of Directors is pleased with the significant growth in the Avation aircraft leasing business. The Company, by way of revenue from leased aircraft assets, continued to deliver outstanding growth in the core aircraft business and successfully completed a sale of an aircraft to a customer pursuant to an option exercise," said Chatfield.
Chatfield said looking forward, it expects further increases in aircraft leasing revenues if, as and when, ordered aircraft are delivered or additional aircraft are purchased.
Shares in Avation were trading at 130.00 pence per share Tuesday morning, down 4.1%.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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