Avation PLC Interim Results
FOR: AVATION PLC
LSE SYMBOL: AVAP
February 24, 2012
Avation PLC Interim Results
LONDON, UNITED KINGDOM--(Marketwire - Feb. 24, 2012) - AVATION PLC (the "Company") (LSE:AVAP) and its subsidiaries (the
"Group")
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
CHAIRMAN'S STATEMENT AND INTERIM MANAGEMENT REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2011
The highlights are:
- Commenced deliveries of a series of Aircraft to Skywest and Virgin
Australia;
- Consolidated net profit after tax increased by 30% to GBP 2,057,004 for
the period;
- Revenues increased by 21% to GBP 10,060,035;
- Total assets increased to GBP 150,751,710; and
- Earnings per share of: 5.29 pence.
Jeff Chatfield, Chairman said "This period demonstrated that the business strategy of Avation Plc is working and
producing reportable increasing profits. I am pleased with current trading as the Company is in the process of
profitably and substantially increasing the number of aircraft owned by the Company."
Enquiries:
Avation PLC
Jeff Chatfield, Chairman +44 7783 942 553
Financial Public Relations
Cubitt Consulting +44 20 7367 5118
Nicholas Nelson/Chris Lane
Websites
www.avation.net
Business Summary
Avation was formed in 2006 initially to support Skywest Airlines Ltd and was admitted to the Official List of the London
Stock Exchange in November 2010. The Company's main activity is an operating lessor of commercial passenger aircraft to
airlines across Europe, the US and Australia and currently is lessor of 19 passenger aircraft. Early this year the
company entered into the ARAN Agreement to provide a fleet of up to 18 new aircraft which will operate along the East
Coast of Australia. In the opinion of the directors, this was a transformational agreement for the Company.
Results Summary
I am pleased to present the Company's consolidated interim results for the six months ended 31 December 2011 (the
"Period"). Total consolidated revenue for the Period was GBP 10.0 million which was an increase of 21% over the
comparative period (31 December 2010: GBP 8.3 million). The increase was primarily a result of the commencement of a
stream of aircraft deliveries to Virgin Australia. As at 31 December 2011, three aircraft had been delivered. As at the
date of writing this report, six aircraft have been delivered with a further nine aircraft planned for delivery over the
next two years.
The Group's net profit after income tax attributable to the shareholders was recorded as GBP 2.05 million; a 30 per cent
increase over the comparative period (31 December 2010: GBP 1.6 million).
The Group has invested GBP 45.0 million on new aircraft during the Period. These aircraft were leased to Skywest
Airlines (Australia) Pty Ltd ("Skywest") and Virgin Blue Airlines Pty Ltd ("Virgin") pursuant to the Australian Regional
Airline Agreement entered into by the Company with Skywest and Virgin on 10 January 2011 (the "ARAN Agreement"). As a
result, the Group's portfolio of aircraft has expanded by approximately 50% with total assets increasing to GBP 150.8
million. The directors are pleased with this rapid rate of growth in asset base and revenues.
Current Trading
As at the date of this report there is significant business growth occurring with nine aircraft scheduled for delivery.
Four ATR72-600s are scheduled for mid-2012 and a further five option aircraft to be delivered up to 2013/2014, the
combined value of which is approximately GBP 115m. Accordingly, the Company enjoys a visible growth profile stretching
into the mid-term. The Company also owns option and purchase rights for further aircraft which provides further scope
for additional expansion. The Company is also benefiting from the current market low base interest rates.
Subsequent Event
Subsequent to the end of the Period and prior to the date of this announcement, the Company purchased a further 12% of
the issued share capital (the "Transaction") of a subsidiary, Capital Lease Aviation Plc (AIM: CLA) ("CLA"). This price
per share of the Transaction was less than the value of CLA's per share net tangible assets and the Transaction is
earnings accretive to the Company by way of reducing the number of minority interests within the groups capital
structure. Following the Transaction, the Company owns 62.07% of CLA. The Company issued 1,647,781 new ordinary shares
in the Company as consideration for this purchase.
Business Risks
The Group's principal risks and uncertainties are consistent with those set put in the Prospectus submitted to the
London Stock Exchange. It should be noted that the Company has a concentration of assets in a small number of customers.
I am pleased with current trading as the Company is in the process of profitably and substantially increasing the size
of its asset base. I would like to take this opportunity to thank you, the owners of this enterprise, for your support
over this important period and look forward to updating you on the growth in the enterprise in the future.
Jeff Chatfield,
Group Chairman
France, 23 February 2012
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
FOR THE SIX MONTHS ENDED 31 DECEMBER 2011
31 31
December December
Note 2011 2010
----------- -----------
Continuing operations GBP GBP
Revenue 4 10,060,035 8,282,327
Cost of sales (466,219) (362,361)
----------- -----------
Gross profit 9,593,816 7,919,966
Other income 5 118,450 67,582
Other operating expenses 6 (3,604,550) (3,049,001)
Expenses
- Administrative expenses (692,403) (601,387)
- Finance expenses 7 (2,191,412) (1,548,472)
----------- -----------
Profit before taxation 3,223,901 2,788,688
Taxation (521,921) (531,147)
----------- -----------
Profit from continuing operations for
the year 2,701,980 2,257,541
Other comprehensive income
Currency translation differences
arising on consolidation 1,431,818 (874,418)
----------- -----------
Other comprehensive income for the
year, (net of tax) 1,431,818 (874,418)
----------- -----------
Total comprehensive income 4,133,798 1,383,123
----------- -----------
Profit attributable to:
Equity holders of the parent 2,057,004 1,584,826
Non-controlling interest 644,976 672,715
----------- -----------
2,701,980 2,257,541
----------- -----------
Total comprehensive income attributable
to:
Equity holders of the parent 2,967,931 1,033,096
Non-controlling interest 1,165,867 350,027
----------- -----------
4,133,798 1,383,123
----------- -----------
Earnings per share
- Basic - continuing and total
operations 5.29 pence 5.86 pence
----------- -----------
- Fully Diluted - continuing and total
operations 5.29 pence 5.69 pence
----------- -----------
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
CONSOLIDATED BALANCE SHEET (UNAUDITED)
AS AT 31 DECEMBER 2011
31 December 30 June
Note 2011 2011
------------- ---------------
GBP GBP
ASSETS
------
Current assets:
Cash and cash equivalents 8,660,473 5,626,771
Trade and other receivables 9,995,343 7,542,395
Inventories 2,794 1,946
Total current assets 18,658,610 13,171,112
--------------- ---------------
Non-current assets:
Property, plant and equipment 8 130,768,559 84,896,190
Goodwill 1,324,541 1,324,541
--------------- ---------------
Total non-current assets 132,093,100 86,220,731
--------------- ---------------
Total assets 150,751,710 99,391,843
--------------- ---------------
LIABILITIES AND EQUITY
----------------------
Current liabilities:
Trade and other payables 3,126,974 3,331,862
Provision for taxation 559,969 38,748
Loans and borrowings 15,287,103 9,865,455
Short-term provisions 3,458,322 2,849,839
--------------- ---------------
Total current liabilities 22,432,368 16,085,904
--------------- ---------------
Non-current liabilities:
Trade and other payables 2,376,664 942,009
Loans and borrowings 65,749,571 28,091,394
Deferred tax liabilities 4,997,096 4,811,938
--------------- ---------------
Total non-current liabilities 73,123,331 33,845,341
--------------- ---------------
Equity attributable to shareholders:
Share capital 9 407,267 386,072
Share premium 12,550,424 10,543,750
Assets revaluation reserve 7,436,517 7,436,517
Capital redemption reserve 7,000 7,000
Warrant reserve 55,393 74,381
Foreign currency translation reserve 3,299,656 2,388,729
Retained earnings 16,540,064 14,890,326
--------------- ---------------
Parent interests 40,296,321 35,726,775
Non-controlling interests 14,899,690 13,733,823
--------------- ---------------
55,196,011 49,460,598
--------------- ---------------
Total liabilities and equity 150,751,710 99,391,843
--------------- ---------------
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
FOR THE SIX MONTHS ENDED 31 DECEMBER 2011
Assets Capital
revalua- Redemp-
Share Share tion tion Warrant
capital premium reserve reserve reserve
-----------------------------------------------------------
GBP GBP GBP GBP GBP
Group
Balance at 1
July 2011 386,072 10,543,750 7,436,517 7,000 74,381
-----------------------------------------------------------
Profit for the
year - - - - -
Other
comprehensive
income - - - - -
-----------------------------------------------------------
Total
comprehensive
income - - - - -
Dividend related
to 2011 paid - - - - -
Increase of
issued share
capital 21,195 2,128,748 - - (18,988)
Share issue
expenses - (122,074) - - -
-----------------------------------------------------------
Balance at 31
December 2011 407,267 12,550,424 7,436,517 7,000 55,393
-----------------------------------------------------------
Balance at 1
July 2010 262,190 1,249,258 6,760,372 7,000 -
-----------------------------------------------------------
Profit for the
year - - - - -
Other
comprehensive
income - - - - -
-----------------------------------------------------------
Total
comprehensive
income - - - - -
Dividend related
to 2010 paid - - - - -
Increase in
issued share
capital 23,132 76,868 - - -
-----------------------------------------------------------
Balance at 31
December 2010 285,322 1,326,126 6,760,372 7,000 -
-----------------------------------------------------------
Foreign
currency Non-
transla- Control-
tion Retained ling Total
reserve earnings Total Interest Equity
-----------------------------------------------------------
GBP GBP GBP GBP GBP
Group
Balance at 1
July 2011 2,388,729 14,890,326 35,726,775 13,733,823 49,460,598
-----------------------------------------------------------
Profit for the
year - 2,057,004 2,057,004 644,976 2,701,980
Other
comprehensive
income 910,927 - 910,927 520,891 1,431,818
-----------------------------------------------------------
Total
comprehensive
income 910,927 2,057,004 2,967,931 1,165,867 4,133,798
Dividend related
to 2011 paid - (407,266) (407,266) - (407,266)
Increase of
issued share
capital - - 2,130,955 - 2,130,955
Share issue
expenses - - (122,074) - (122,074)
-----------------------------------------------------------
Balance at 31
December 2011 3,299,656 16,540,064 40,296,321 14,899,690 55,196,011
-----------------------------------------------------------
Balance at 1
July 2010 3,563,359 11,434,226 23,276,405 12,755,521 36,031,926
-----------------------------------------------------------
Profit for the
year - 1,584,826 1,584,826 672,715 2,257,541
Other
comprehensive
income (551,730) - (551,730) (322,688) (874,418)
-----------------------------------------------------------
Total
comprehensive
income (551,730) 1,584,826 1,033,096 350,027 1,383,123
Dividend related
to 2010 paid - (171,193) (171,193) - (171,193)
Increase in
issued share
capital - - 100,000 - 100,000
-----------------------------------------------------------
Balance at 31
December 2010 3,011,629 12,847,859 24,238,308 13,105,548 37,343,856
-----------------------------------------------------------
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED 31 DECEMBER 2011
31 December 31 December
2011 2010
-------------- --------------
GBP GBP
Cash flows from operating activities:
Profit before taxation 3,223,901 2,788,688
Adjustments for:
Depreciation expense 2,950,475 2,387,116
Claim on maintenance reserve 691,670 661,885
Interest expense 2,191,412 1,468,697
Interest income (1,086) (1,242)
-------------- --------------
Operating profit before working capital
changes 9,056,372 7,305,144
Movement in working capital:
Trade and other receivables (2,452,948) (136,631)
Inventories (848) (402)
Trade and other payables 822,501 (222,372)
Short-term provisions (83,187) (137,248)
-------------- --------------
Cash from operations 7,341,890 6,808,491
Interest paid (1,852,061) (1,468,697)
Interest received 1,086 1,242
Corporation tax paid (260,229) (96,776)
-------------- --------------
Net cash from operating activities 5,230,686 5,244,260
-------------- --------------
Cash flows used in investing activities:
Purchase of property, plant and equipment (44,650,840) (17,504)
-------------- --------------
Net cash used in investing activities (44,650,840) (17,504)
-------------- --------------
Cash flows from financing activities:
Net proceeds from issuance of ordinary
shares 2,008,881 100,000
Dividends paid - (171,193)
Proceeds from borrowings 45,408,208 1,278,100
Repayment of borrowings (4,214,372) (4,028,934)
Capital element of finance lease repayments (927,906) (665,090)
-------------- --------------
Net cash used in financing activities 42,274,811 (3,487,117)
-------------- --------------
Effects of exchange rates on cash & cash
equivalents 179,045 86,883
-------------- --------------
Net increase in cash and cash equivalents 3,033,702 1,826,522
Cash and cash equivalents at beginning of
financial period 5,626,771 1,227,881
-------------- --------------
Cash and cash equivalents at end of financial
period 8,660,473 3,054,403
-------------- --------------
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO THE FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED 31 DECEMBER 2011
The Interim Report for Avation PLC for the six months ended 31 December 2011 was approved by the Directors on 23
February 2012.
1 CORPORATE INFORMATION
Avation PLC (the Company) is a public limited company incorporated and domiciled in England and Wales under the
Companies Act 2006 (Registration Number 05872328).
The principal activities of the Company and its subsidiaries are the holding of investments involved in owning, leasing
aircraft and trading of broadcasting equipment and procurement business. The Company also owns and leases aircraft in
its own right. During the six month period ended 31 December 2011, the Group has commenced leasing aircraft to Skywest
Airlines (Australia) Pty Ltd and Virgin Blue Airlines Pty Ltd pursuant to an agreement signed with Skywest Airlines
(Australia) Pty Ltd and Virgin blue Airlines Pty Ltd on 10 January 2011.
2 BASIS OF PREPARATION AND ACCOUNTING POLICIES
This Interim Report has been prepared in accordance with the Disclosure and Transparency Rules (DTR) of the Financial
Services Authority and in accordance with International Accounting Standard (IAS) 34 'Interim Reporting'.
The Interim Report does not include all the notes of the type normally included within the annual report and therefore
cannot be expected to provide as full an understanding of the financial performance, financial position and financial
and investing activities of the consolidated entity as the full financial report.
It is recommended that the Interim Report be read in conjunction with the annual report for the year ended 30 June 2011
and considered together with any public announcements made by Avation PLC during the six months ended 31 December 2011.
The accounting policies and methods of computation are the same as those adopted in the annual report for the year ended
30 June 2011.
The preparation of the Interim Report requires management to make estimates and assumptions that affect the reported
income and expense, assets and liabilities and disclosure of contingencies at the date of the interim Report, actual
results may differ from these estimates.
The statutory financial statements of Avation PLC for the year ended 30 June 2011, which carried an unqualified audit
report, have been delivered to the Registrar of Companies and did not contain section 498 of the Companies Act 2006.
The Interim Report is unaudited and not reviewed by the auditors.
The Interim Report does not constitute statutory financial statements within the meaning of section 434 of the Companies
Act 2006.
3 SEGMENT INFORMATION
a) Segment reporting policy
A segment is a distinguishable component of the Group within a particular economic environment (geographical segment)
and to a particular industry (business segment) which is subject to risks and rewards that are different from those of
other segments.
The primary format, business segments, is based on the Group's management and internal reporting structure. In
presenting information on the basis of business segments, segment revenue and segment assets are based on the nature of
the products or services provided by the Group, information for geographical segments is based on the geographical areas
where the customers are located.
Inter-segment pricing is determined on an arm's length basis. Segment results, assets and liabilities include items
directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items
comprise mainly of corporate assets and liabilities or profit or losses items that are not directly attributable to a
segment or those that cannot be allocated on a reasonable basis. Common expenses were allocated based on revenue from
the Group.
Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are expected to
be used for more than one year.
b) Primary reporting segment - business segments
During the six months ended 31 December 2011, the Group was organised into two main business segments which are aircraft
leasing and business procurement.
Other operations of the Group mainly comprise investment holding which does not constitute a separate reportable
segment. There are no inter-segment transactions recorded during the financial period.
Aircraft Business
31 December 2011 leasing procurement Total
---------------- ---------- ----------- -----------
GBP GBP GBP
Revenue & other income
- External sales 12,268,854 592,548 12,861,402
- Other income 224,787
-----------
Total of all segments 13,086,189
Less: elimination (2,907,704)
-----------
Consolidated revenue & other income 10,178,485
-----------
Aircraft Business
31 December 2011 leasing procurement Total
---------------- ----------- ----------- ------------
GBP GBP GBP
Results
Segment results 5,422,303 (8,076) 5,414,227
Finance income 1,086
Finance expense (2,191,412)
Unallocated corporate expenses -
Profit before taxation 3,223,901
Taxation (521,921)
Profit after taxation 2,701,980
Other segment items
Capital expenditure & valuation
movement
- property, plant and equipment 44,650,238 602 4,465,840
Depreciation 2,949,496 979 2,950,475
Aircraft Business
31 December 2011 leasing procurement Total
---------------- ----------- ----------- -----------
GBP GBP GBP
Segment assets 149,283,523 143,646 149,427,169
Unallocated assets -
-----------
Consolidated total assets 149,427,169
-----------
Segment liabilities
Trade and other payables 5,381,098 122,540 5,503,638
Provisions of taxation 559,969 - 559,969
Short term provisions 3,458,322 - 3,458,322
Loans and borrowings 81,036,674 - 81,036,674
Deferred tax liabilities 4,997,096 - 4,997,096
Unallocated liabilities -
-----------
Consolidated total liabilities 95,555,699
-----------
Aircraft Business
31 December 2010 leasing procurement Total
---------------- ----------- ----------- ----------
GBP GBP GBP
Revenue & other income
- External sales 8,586,668 424,176 9,010,844
- Other income 69,931
-----------
Total of all segments 9,080,775
Less: elimination (730,866)
-----------
Consolidated revenue & other income 8,349,909
-----------
Aircraft Business
31 December 2010 leasing procurement Total
---------------- ----------- ------------ ------------
GBP GBP GBP
Results
Segment results 4,349,853 (13,935) 4.335,918
Finance income 1,242
Finance expense (1,548,472)
Unallocated corporate expenses -
------------
Profit before taxation 2,788,688
Taxation (531,147)
------------
Profit after taxation 2,257,541
------------
Aircraft Business
30 June 2011 Leasing procurement Total
------------ ------------ ------------ ------------
GBP GBP GBP
Segment assets 97,440,829 626,473 98,067,302
Unallocated assets -
------------
Consolidated total assets 98,067,302
------------
Segment liabilities
Trade and other payables 3,653,046 620,825 4,273,871
Provisions of taxation 38,748 - 38,748
Short term provisions 2,848,399 - 2,849,839
Loans and borrowings 37,956,849 - 37,956,849
Deferred tax liabilities 4,811,938 - 4,811,938
Unallocated liabilities -
------------
Consolidated total liabilities 49,931,245
------------
c) Second reporting segment - geographical segments
The following table provides an analysis of the revenues by geographical market, irrespective of the origin of the
goods:
31 December 31 December
2011 2010
------------ ------------
Revenue GBP GBP
-------
Australia 5,990,376 4,671,720
Denmark 2,826,900 2,875,725
United States 697,302 709,346
Others 545,457 25,536
------------ ------------
10,060,035 8,282,327
------------ ------------
Net Book
Total Value
assets Aircraft
------------ ------------
31 December 2011 GBP GBP
----------------
Australia 82,995,750 79,967,236
Denmark 43,744,626 43,744,626
Singapore 11,015,748 -
United States 7,057,596 7,057,596
United Kingdom 4,088,459 -
Malta 516,224 -
Others 8,766 -
------------ ------------
149,427,169 130,762,459
------------ ------------
Net Book
Total Value
assets Aircraft
------------ ------------
30 June 2011 GBP GBP
------------
Denmark 42,619,016 42,619,016
Australia 35,628,465 35,197,379
United Kingdom 9,949,037 -
United States 7,074,476 7,074,476
Malta 925,606 -
Others 1,870,702 -
------------ ------------
98,067,302 84,890,871
------------ ------------
4 REVENUE
31 December 31 December
2011 2010
------------ ------------
GBP GBP
Rental income 8,604,687 7,149,482
Maintenance rent revenue 702,975 708,669
Management and service income 180,069 45,755
Sales of finished goods 572,304 378,421
------------ ------------
10,060,035 8,282,327
------------ ------------
5 OTHER INCOME
31 December 31 December
2011 2010
------------ ------------
GBP GBP
Interest income 1,086 1,242
Foreign currency exchange adjustment gain 117,302 66,340
Other income 62 -
------------ ------------
118,450 67,582
------------ ------------
6 OTHER OPERATING EXPENSES
31 December 31 December
2011 2010
------------ ------------
GBP GBP
Claim on maintenance reserve expense 654,075 661,885
Depreciation of property, plant and equipment 2,950,475 2,387,116
------------ ------------
3,604,550 3,049,001
------------ ------------
7 FINANCE EXPENSES
31 December 31 December
2011 2010
------------ ------------
GBP GBP
Interest expense on secured borrowings 2,191,412 1,468,697
Guarantee and commitment fee - 79,775
------------ ------------
2,191,412 1,548,472
------------ ------------
8 PROPERTY, PLANT AND EQUIPMENT
Furniture
and
equipment Aircraft Total
------------ ------------ ------------
31 December 2011 GBP GBP GBP
----------------
Cost or valuation:
At 1 July 2011 7,539 98,053,543 98,061,082
Additions 1,776 44,649,064 44,650,840
Currency realignment 293 4,726,301 4,726,594
------------ ------------ ------------
At 31 December 2011 9,608 147,428,907 147,348,515
------------ ------------ ------------
Representing:
Cost 9,608 44,649,064 44,658,672
Valuation - 102,779,843 102,779,843
------------ ------------ ------------
9,608 147,428,907 147,438,515
------------ ------------ ------------
Accumulated depreciation:
At 1 July 2011 2,220 13,186,967 13,189,187
Depreciation for the period 1,173 2,949,302 2,950,475
Currency realignment 115 530,179 530,294
------------ ------------ ------------
At 31 December 2011 3,508 16,666,448 16,669,956
------------ ------------ ------------
Net book value:
At 1 July 2011 5,319 84,866,576 92,520,577
------------ ------------ ------------
At 31 December 2011 6,100 130,762,459 130,768,559
------------ ------------ ------------
Furniture
and
equipment Aircraft Total
------------ ------------ ------------
30 June 2011 GBP GBP GBP
------------
Cost or valuation:
At 1 July 2010 995 101,640,622 101,641,617
Additions 6,652 913,768 920,420
Revaluation surplus - 1,112,985- 1,112,985
Currency realignment (108) (5,613,934) (5,613,942)
------------ ------------ ------------
At 30 June 2011 7,539 98,053,541 98,061,080
------------ ------------ ------------
Representing:
Cost 7,539 - 7,539
Valuation - 98,053,541 98,053,541
------------ ------------ ------------
7,539 98,053,541 98,061,080
------------ ------------ ------------
Accumulated depreciation:
At 1 July 2010 995 9,120,044 9,121,039
Depreciation for the year 1,295 4,964,158 4,964,453
Increase in revaluation - (229,056) (229,056)
Currency realignment (70) (691,476) (691,546)
------------ ------------ ------------
At 30 June 2011 2,220 13,162,670 13,164,890
------------ ------------ ------------
Net book value:
At 1 July 2010 - 92,520,577 92,520,577
------------ ------------ ------------
At 30 June 2011 5,319 84,890,871 84,896,190
------------ ------------ ------------
9 SHARE CAPITAL
31 December 30 June
2011 2011
------------ ------------
GBP GBP
Allotted, called up and fully paid:
40,726,682 (30 June 2011: 38,607,220) ordinary
shares of 1 penny each 407,267 386,072
------------ ------------
On 9 December 2011, the Company issued 1,818,182 ordinary shares of 1
penny each following a private placement exercise for GBP 2,000,000.
On 13 December 2011, the Company issued 301,280 ordinary shares of 1
penny each following the exercise of warrants by warrant holders for GBP
130,954.
10 DIVIDENDS PAID
31 December 31 December
2011 2010
------------ ------------
GBP GBP
Dividend declared/paid during the 6 months ended
31 December:
Final dividend of 1p (2010: 0.6p) 407,266 171,193
------------ ------------
No dividends have been declared subsequent to 31 December 2011.
11 CONTINGENT LIABILITIES
There were no material changes in contingent liabilities since 30 June
2011.
12. TRANSACTIONS WITH RELATED PARTIES
Significant related party transactions:
31 December 31 December
2011 2010
------------ ------------
GBP GBP
Sales of goods to a related party(1) 125,639 306,428
Sales of goods to a related party(2) 2,300 -
Services rendered to a related party(1) 20,244 43,344
Maintenance rent received from a related party(1) 702,975 708,669
Rental income received from a related party(1) 4,971,086 3,569,349
Rental income received from a related party3 109,398 -
Service fee paid to a related party(4) 10,939 -
Arrangement fee paid to a related party(5) 32,355 -
Service fee paid to a related party(6) 61,260 -
Service fee paid to a related party(7) 10,164 -
Service fee paid to a related party(8) 10,000 -
Service fee paid to a related party(9) 11,412 -
Service fee paid to a related party(10) 2,033 -
Expenses rebilled from a related party(10) 17,613 -
Interest expense paid to a related party(5) 6,675 -
Interest expense paid to a related party(11) 2,821 -
Guarantee and commitment fee paid to a related
party11 - 79,775
------------ ------------
1. Received from Skywest Airlines (Australia) Pty Ltd in which a director
of the Company is also a director of Skywest Airlines (Australia) Pty
Ltd.
2. Received from Skywest Airlines (S) Pte Ltd in which a director of the
subsidiary is also a director of Skywest Airlines (S) Pte Ltd.
3. Received from F11305 Pte Ltd in which a director of the Company is also
a director of F11305 Pte Ltd.
4. Paid to Loeb Aron & Company Ltd in which a director of a subsidiary is
also a former director of Loeb Aron & Company.
5. Paid to Fleet Solution Consulting Pte Ltd in which a director of a
subsidiary is also a director of Fleet Solution Consulting Pte Ltd.
6. Paid to Takeoff Services Pte Ltd in which a director of the Company is
also a director of Takeoff Services Pte Ltd.
7. Paid to Giant Mix Investment Ltd in which a director of the Company is
also a director of Giant Mix Investment Ltd.
8. Paid to Epsom Assets Limited in which a director of the Company is also
a director of Epsom Assets Limited.
9. Paid to Sinclair Management in which a director of the subsidiary is
the sole proprietor of Sinclair Management.
10. Paid to Skywest Airlines (S) Pte Ltd in which a director of the
subsidiary is also a director of Skywest Airlines (S) Pte Ltd.
11. Paid to CaptiveVision Capital Ltd in which a director of the Company is
a director of CaptiveVision Capital Ltd.
The nature and contractual terms of key management compensation and inter-
company transactions during the period are consistent with the disclosures
in the Annual Report for the year ended 30 June 2011.
13 EVENTS AFTER THE BALANCE SHEET DATE
Subsequent to the balance sheet date, the followings occurred:
a) The Group has entered into an agreement to acquire an additional two new
ATR72-500 aircraft. These aircraft will be leased to Australian carrier
Skywest Airlines, which will operate the aircraft on behalf of Virgin
Australia, pursuant to a 10-year wet-lease contract.
b) The Company has agreed to acquire 10,662,112 ordinary shares in aircraft
lessor Capital Lease Aviation PLC ("CLA"), increasing its holding in
CLA's issued share capital from 51.8% to 62.07%. The consideration for
the acquisition of the CLA shares is the allotment of 1,647,781 new
ordinary shares in the Company, representing 4.05% of the existing
issued share capital of the Company.
PRINCIPAL RISKS
The Group's risk management processes bring greater judgement to decision making as they allow management to make
better, more informed and more consistent decisions based on a clear understanding of risks involved. We regularly
review the risk assessment and monitoring process as part of our commitment to continually improve the quality of
decision-making across the Group.
The Group's principal risks and uncertainties are consistent with those set put in the Prospectus submitted to the
London Stock Exchange.
The principal risks and uncertainties which may affect the Group in the second half of the financial year will include
the typical risks associated with the aviation business, including but not limited to any downturn in the global
aviation industry, fuel costs, finance costs, war and terrorism and the like which may affect our airline customers'
ability to fulfil their lease obligations.
The business also relies on its ability to source for finance on favourable terms. Should this supply of finance
contract, it would limit our fleet expansion and therefore growth.
GOING CONCERNS
After making enquiries, the directors have a reasonable expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. For this reason they continue to adopt the going concern basis in
preparing the financial statements. The financial risk management objectives and policies of the Group and the exposure
of the Group to credit risk and liquidity risk are discussed in the annual report for the Group for the year ended 30
June 2011.
DIRECTORS
The directors of Avation PLC are listed in its Annual Report for the year ended 30 June 2011. A list of the current
directors is maintained on the Avation PLC website: www.avation.net.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors confirm that, to the best of their knowledge, this condensed consolidated interim financial information
have been prepared in accordance with IAS 34 as adopted by the European Union and that the interim management report
herein includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8 namely
- an indication of important events that have occurred during the first
six months and their impact on the Interim Report, and a description
required by the principal risks and uncertainties for the remaining six
months of the financial year; and
- material related party transactions in the first six months and any
material changes in the related party transactions described in the last
annual report.
By order of the Board
Jeff Chatfield
Chairman
23 February 2012
Avation plc
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