Audited Results for the Year Ended 30 June 2015

RNS Number : 5389A

Capital Lease Aviation PLC

29 September 2015

 

Capital Lease Aviation PLC

("CLA" or "the Company" or "the Group")

Audited Results Announcement for the Year Ended 30 June 2015

Capital Lease Aviation PLC (LSE: CLA), the aircraft leasing company, today announces audited consolidated financial results for the Company and its subsidiaries for the year ending 30 June 2015.

Highlights:

·     Refinance of debt which released US$ 10.1 million in cash and reduced the average interest rate from 6.0% to 4.6%

·     Part out of an A320 end of life aircraft which increased cash reserves by US$ 5 million and resulted in a US$ 1.2 million loss (after tax)

·     Total cash increased 103% to US$ 12.4 million (2014: US$ 6.1 million)

·     Revenue from continuing operations down 7.5% to US$10.8 million (2014: US$ 11.7 million)

·     Basic and diluted EPS from total operations of 0.47 US cents (2014: 2.30 US cents)

The audited results for the Group's financial year ended 30 June 2015 (pursuant to International Financial Reporting Standards "IFRS") and reported in United States Dollars "US$" are as follows:

Consolidated Results:	12 months ended 30 June 2015 US$	12 months ended 30 June 2014 US$ (restated) *	Change %
Continuing operations - Lease Revenue	10,825,000	11,700,000	(7.5)
Total Profit	451,070	2,239,248	(79.8)
Total assets	90,195,065	92,287,404	(2.2)
Net Assets	44,063,603	47,062,523	(6.3)
Cash	12,416,554	6,122,479	103
Basic and diluted EPS from total operations	0.47 cents	2.30 cents	(79.5)
Average Fleet Age (years)	12.7	15.2	(16.4)
Average Lease Term ( years)	4.8	4.4	9.1
Average Interest Rate ( % )	4.6	6.0	(23.3)

*the explanation for the restatement is in the Chairman's Statement

Jeff Chatfield, Executive Chairman, said:

"During the reporting period the Group has focused on realising value from aircraft assets to create a platform for growth."   

"The Group's key achievements during the year include the refinance of senior loans which reduced the cost of debt by 23 per cent and released US$ 10.1 million. The part-out of an end of life aircraft which resulted in a reduction in the average age of the fleet to 12.7 years and increased cash reserves by US$ 5 million.  These elements, including the extension of the average lease term to 4.8 years during 2014, are a solid foundation for the next stage of development."

"Our strategy remains to grow the fleet of mid-life narrow-body jets in Asia and Europe, the cash generated through the sale of an asset and refinancing will facilitate future growth. Our goal, for 2016, is to invest the capital in assets that create value for our shareholders."

"The continued support of our shareholders is fundamental to our growth plans, in recognition of their continued support the Board has announced a 2p interim dividend from the cash released during the period."

The Company's financial statements are expected to be posted to shareholders on 16 October 2015 and will be available shortly on the company website http://www.cl-aviation.com/

Enquiries:

Capital Lease Aviation PLC                                                                      [phone]
Jeff Chatfield, Executive Chairman

Nominated Adviser
James Joyce, W H Ireland Limited                                                           0207 220 1666

Company Stockbroker

W H Ireland Limited                                                                                  0207 220 1670

Blytheweigh                                                                                               0207 138 3204         

Tim Blythe / Wendy Haowei / Fergus Lane                                        

Website

http://www.cl-aviation.com/

Chairman's Statement

For the Year ended 30 June 2015

Background and Outcome

I am pleased to report that the Group is in a strong financial position despite the lower operating result. The Group refinanced two aircraft during the year, renegotiated a key loan covenant which released cash onto the balance sheet and post the period end completed the disposal by way of part out of a 25 year old Airbus A320, which was at the end of its useful economic life.  

Management have successfully achieved their objectives which have been to strengthen our financial position through the refinance of higher interest debt, extend leases on key aircraft, remain profitable and pursue fleet growth.

Key Achievements:

·     Refinance of two aircraft which released US$ 10.1 million in cash;

·     Disposal of an end of life aircraft which added US$ 5 million to the Company's cash reserves;

·     Repayment of significant related party loan agreements; and

·     Reduction in the average cost of senior debt from 6.0% to 4.6%.

Results

Significant changes implemented by the Group during the year resulted in Total Profit for the year ending 30 June 2015 being US$ 0.45 million (2014:US$ 2.2 million), which translates into earnings per share from total operations of 0.47cents (2014: 2.30 cents). The key drivers for the changes in the results were certain lower lease rates, a change in the depreciation policy and the net impact of a disposal of an end of life aircraft which resulted in a book loss of US$ 1.2 million. 

The $1.2 million loss is classified within discontinued operations as it represented the Group's only aircraft operating in North America and operations in that region have therefore been discontinued. The Group's current strategy is to grow its fleet through the acquisition of narrow-body, mid-life aircraft in Asia and Europe.

The Group has amended the presentation of its financial statements in the current financial year to provide greater clarity. The comparative statement of profit or loss has been restated to show discontinued operations separately from continuing operations.

Revenue from continuing operations decreased by 7.5 per cent to US$ 10.83 million (2014: US$ 11.7 million).The Board has previously advised that lease extensions on two aircraft to 2021 have resulted in slightly lower revenue and net income yield from the aircraft. Lower income was a commercial trade off for a longer duration lease. The two aircraft are significant components of the balance sheet and represent over 70 per cent of the total revenue of the Group. 

In addition to lower revenue, depreciation expenses have increased as a result of a change in the depreciation policy as advised in October 2014. Administrative expenses increased due to a number of one off costs.

Dividend

The Board would like to thank the shareholders for their continued support and is pleased to announce an interim dividend of 2p to shareholders, as a direct result of the Company's success in releasing equity from the balance sheet during the financial year.

The interim dividend payable of US$ 3,013,819 for the financial year has been charged to retained earnings.

Outlook

The Group is actively pursuing new aircraft acquisitions on both an individual and portfolio basis, and has evaluated numerous aircraft during the year. Further acquisitions are expected to deliver economies of scale that will lead to an increase in profitability. The Group will also seek to optimise structures for tax and finance to increase returns to shareholders.

Risks

The risks remain typical for an aircraft leasing company that uses leverage to build the fleet. Along with the risks associated with obtaining finance, there is residual value risk and impairment of aircraft assets.

The Board has a conservative approach to gearing (at 42 percent it is below industry norms), asset management and the deployment of capital and will use these criteria when assessing new investment opportunities.

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.

Robert Jeffries Chatfield

Executive Chairman

29^th September 2015

--ENDS--

AUDITED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2015

		2015	2014
		US$	US$
			(Restated)
Continuing operations
Lease revenue		10,825,000	11,700,000
Other income		4,072	-
		10,829,072	11,700,000
Depreciation		(4,472,644)	(3,839,230)
Administrative expenses		(2,269,009)	(1,907,130)
Other expenses		(11,303)	(15,785)
Operating profit		4,076,116	5,937,855
Finance income		334,540	10,686
Finance expenses		(2,326,513)	(2,988,600)
Profit before taxation		2,084,143	2,959,941
Taxation		(435,530)	(223,039)
Profit from continuing operations		1,648,613	2,736,902
Discontinued operations
Loss from discontinued operations		(1,197,543)	(497,654)
Total profit		451,070	2,239,248
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss:
Currency translation differences arising on consolidation		(22,598)	2,045
Other comprehensive income, net of tax		(22,598)	2,045
Total comprehensive income for the financial year, all attributable to equity holders of the Company		428,472	2,241,293
Earnings per share for profit from continuing and discontinued operations attributable to equity holders of the Company
Basic and diluted earnings per share:
From continuing operations		1.72 cents	2.81 cents
From total operations		0.47 cents	2.30 cents

The Company has taken advantage of the exemption of section 408 of the Companies Act 2006 not to present the Company statement of profit or loss and other comprehensive income.  The Company's profit for the year was US$1,290,541 (2014: Loss of US$653,214)

AUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2015

			2015	2014
			US$	US$
ASSETS
Current assets
Cash and cash equivalents			12,416,554	6,122,479
Trade and other receivables			2,900,300	106,300
Assets held for sale			30,000	-
Total current assets			15,346,854	6,228,779
Non-current assets
Property, plant and equipment			74,848,211	86,058,625
Total non-current assets			74,848,211	86,058,625
Total assets			90,195,065	92,287,404
EQUITY AND LIABILITIES
Current liabilities
Trade and other payables			4,061,464	1,993,055
Provision for taxation			15,659	57,116
Loans and borrowings			6,460,771	29,644,614
Total current liabilities			10,537,894	31,694,785
Non-current liabilities
Loans and borrowings			34,175,843	12,085,911
Deferred tax liabilities			1,417,725	1,444,185
Total non-current liabilities			35,593,568	13,530,096
Capital and reserves
Share capital			196,393	196,393
Treasury shares			(661,001)	(247,428)
Share premium			21,696,406	21,696,406
Asset revaluation reserve			3,839,923	3,839,923
Foreign currency translation reserve			(20,957)	1,641
Retained earnings			19,012,839	21,575,588
Net equity			44,063,603	47,062,523
Total equity and liabilities			90,195,065	92,287,404

AUDITED CONSOLIDATED STATEMENT OF CASHFLOWS

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

		2015	2014
		US$	US$
Cash flows from operating activities
Profit before taxation from continuing operations		2,084,143	2,959,941
Loss before taxation from discontinued operations		(1,626,993)	(707,125)
Profit before taxation		457,150	2,252,816
Adjustments for:
Depreciation expense		4,622,644	4,483,105
Impairment of property, plant and equipment		3,850,000	713,250
Loss on disposal of assets held for sale		1,600,000	-
Interest expense		2,326,513	2,988,600
Interest income		(334,540)	(10,686)
Unrealised foreign exchange differences		(22,598)	2,045
Operating cash flows before changes in working capital		12,499,169	10,429,130
Movements on:
Trade and other receivables		(2,578,160)	592,552
Trade and other payables		(927,212)	213,710
Cash flows from operations		8,993,797	11,235,392
Interest paid		(2,254,313)	(2,860,314)
Interest received		118,700	10,686
Income tax paid		(73,997)	(37,712)
Net cash flows from operating activities		6,784,187	8,348,052
Investing activities
Proceeds from disposal of assets held for sale		1,210,000	-
Purchase of property, plant and equipment		(102,230)	(2,004)
Net cash flows from/(used in) investing activities		1,107,770	(2,004)
Financing activities
Purchase of treasury shares		(413,573)	(247,428)
Proceeds from loans and borrowings		10,098,441	1,500,000
Repayment of loans and borrowings		(11,282,750)	(9,193,154)
Cash flows used in financing activities		(1,597,882)	(7,940,582)
Net increase in cash and cash equivalents		6,294,075	405,466
Cash and cash equivalents at the beginning of the financial year		6,122,479	5,717,013
Cash and cash equivalents at the end of the financial year		12,416,554	6,122,479

 

END

 

 

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