Unaudited Results Announcement

Capital Lease Aviation Plc

("CLA" or "the Company")

Unaudited Results Announcement for the Year Ended 30 June 2014

Capital Lease Aviation PLC (LSE: CLA), the aircraft leasing company, today announces unaudited financial results for the Company and its subsidiaries for the year ending 30 June 2014.

Highlights:

· Revenue from continuing operations up 14.0% to US$12,350,000 (2013: US$ 10,835,000)

· Net Assets up 5.6% to US$ 47,578,702 (2013: US$ 45,068,658)

· Total liabilities decreased by 13.6% to US$45,421,952 (2013: US$52,600,183)

· Total assets of US$ 93,000,654 (2013: US$ 97,668,841)

· Profit for the financial year of US$ 2,755,427 (2013: US$ 4,041,666)

· EPS (fully diluted) of 2.83 cents (2013: 4.13 US cents)

The unaudited results for the Group's financial year ended 30 June 2014 (pursuant to International Financial Reporting Standards "IFRS") and reported in United States Dollars "US$" are as follows:

Jeff Chatfield, Executive Chairman, said:

"The Company has delivered growth in revenue and net assets. The Company concluded long term lease extensions for two key aircraft during the year that secure a long term future revenue stream. The Company will now look to optimize the debt and capital structure in the short term with a view to enhancing profitability and providing a solid growth platform to support further additions to the fleet."

Notes:

1) For the convenience of international shareholders, an additional column is included to show an equivalent value in Pounds Sterling "GBP". In this announcement, the applicable exchange rate between US$ and GBP was taken to be 1: 0.6155 for Income Statement items and 1: 0.5866 for Balance Sheet items.

Enquiries:

Websitewww.capitalleaseaviation.com 

Chairman's Statement

For the Year ended 30 June 2014

Background and Outcome

I am pleased to report that the Company has delivered growth in revenues and is in a strong financial position. Management objectives have been to strengthen our financial position through aggressive repayment of debt, extend leases on key aircraft, remain profitable and pursue further fleet growth.

Revenue from rental income over the year has increased by 14.0% to US$12,350,000. This has been combined with a strengthening of the balance sheet with net asset growth of 5.6% to US$47,578,702. This was achieved through the rapid pay down of debt which resulted in total liabilities decreasing by 13.6% to US$45,421,952.

Key Achievements:

· The leases of two key A321-200 aircraft in the portfolio were extended to the year 2021;

· Aggressive pay down of debt that will lower future overall interest expense of existing debt facilities;

· Operational team growth and management restructure required to support fleet growth; and

· Implementation of a lease management information system that improves lease management capabilities and supports fleet expansion.

Results

While delivering increased financial strength, the Company acknowledges a lower earnings per share over the past year of 2.83 cents (2013: 4.13 cents). This is partially attributed to a number of one off or non-recurring costs incurred during the year, as well as higher administration charges. Unlike its parent company Avation PLC the Company is not included in Singapore's Aircraft Leasing Scheme, which impacts tax rate and the applicability of withholding tax. CLA has applied for exemption from withholding tax of US$223,128 on the basis that the parent company is included in the scheme. The directors fully expect the exemption to be granted but in the event that it is not approved the Company will need to provide for this charge.

The Board has previously advised that lease extensions on two aircraft to 2021 have resulted in a slightly lower revenue and net income yield from the aircraft: short term lower income was a commercial trade off for a longer term lease. The two aircraft are significant components of the balance sheet and represent over 60% of the total assets of the Group. This has resulted in a misalignment of the debt facility maturities associated with these aircraft, which will be refinanced on maturity. The prevailing low interest rate environment will likely result in an improvement in the net yield upon the re-finance of the debt facilities which mature in early 2015.

Outlook

The Company is actively pursuing new aircraft acquisitions on both an individual and portfolio basis. The Company will continue to aggressively pay down existing high cost debt facilities that will result in a lowering of the cost of debt against existing assets. CLA will to seek to re-leverage existing aircraft with the dual objective of lowering the cost of debt and increasing the gearing ratio to release cash to support further aircraft acquisitions. Further acquisitions are expected deliver economies of scale that will lead to an increase in profitability. The Company will also seek to optimise structures for tax and finance purposes to increase returns to shareholders.

Risks

The risks remain typical for an aircraft leasing company that typically uses leverage to build the fleet, along with the risks associated with obtaining finance and the residual value risk and impairment in aircraft assets. The Company is in the process of negotiating lease return conditions with a lessee on one old aircraft. It has appointed an external adviser, to lead negotiations with the airline. That adviser has provided advice that the full value of this aircraft asset should be recovered but, as in all such situations, there is a residual value risk associated with the outcome until negotiations are concluded.

The Board has continued to adopt a strategy that entails a conservative and judicious use of retained earnings and free cash flow, along with gearing, to acquire selected aircraft and lease them to commercial airlines. There is a refinance and interest rate risk associated with the refinance of the facilities maturing in March and April 2015.

The Directors would like to take this opportunity to thank all our shareholders for their continued support and look forward to creating more value for you as we continue to develop our aircraft leasing business.

Jeff Chatfield

Executive Chairman

Singapore, 3 September 2014

--ENDS--

UNAUDITED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

UNAUDITED CONSOLIDATED STATEMENT OF CASHFLOWS

Note :

1. The unaudited results have been prepared on a going concern basis and on the basis of the accounting policies adopted in the audited accounts for the year ended 30 June 2014.