Unaudited Results Announcement

RNS Number : 8192Q

Capital Lease Aviation PLC

04 September 2014

 



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:

Consolidated 12 months ended 30 June 2014	US$	GBP Equivalent (1)
Revenue from continuing operations	12,350,000	7,601,425
Group Net profit after tax	2,755,427	1,695,965
Total assets	93,000,654	54,554,184
Net Assets	47,578,702	27,909,667
EPS (fully diluted)	2.83 cents	1.74 pence

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:

Capital Lease Aviation Plc	[phone]
Jeff Chatfield, Executive Chairman
Nominated Adviser	0207 220 1666
James Joyce, W H Ireland Limited
Company Stockbroker	0207 220 1670
W H Ireland Limited
Blytheweigh	0207 138 3204
Tim Blythe / Eleanor Parry

Website
www.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

		2014	2013
		US$	US$
Continuing operations
Revenue		12,350,000	10,835,000
Other income		10,686	12,375
Other operating expenses		(4,498,890)	(3,469,953)
Expenses
- Administrative expenses		(1,907,130)	(1,218,831)
- Finance expense		(2,988,600)	(2,076,857)
Profit before taxation		2,966,066	4,081,734
Taxation		(210,639)	(40,068)
Profit for the financial year		2,755,427	4,041,666
Other comprehensive income:
Items that will not be reclassified to profit or loss:
Loss on revaluation of property, plant and equipment, net of tax		-	(1,659,846)
		-	(1,659,846)
Items that may be reclassified to profit or loss:
Foreign currency translation gain		2,045	603
		2,045	603
Other comprehensive income, net of tax		2,045	(1,659,243)
Total comprehensive income for the financial year, all attributable to equity holders of the Company		2,757,472	2,382,423
Earnings per share
- Basic		2.83 cents	4.13 cents
- Fully diluted		2.83 cents	4.13 cents

UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

			2014	2013
			US$	US$
ASSETS
Current assets
Cash and cash equivalents			6,122,479	5,717,013
Trade and other receivables			106,300	698,852
Total current assets			6,228,779	6,415,865
Non-current assets
Property, plant and equipment			86,771,875	91,252,976
Total non-current assets			86,771,875	91,252,976
Total assets			93,000,654	97,668,841
EQUITY AND LIABILITIES
Current liabilities
Trade and other payables			6,493,055	6,651,059
Provision for taxation			57,116	101,346
Loans and borrowings			25,144,614	7,077,245
Total current liabilities			31,694,785	13,829,650
Non-current liabilities
Loans and borrowings			12,085,911	37,346,434
Deferred tax liabilities			1,641,256	1,424,099
Total non-current liabilities			13,727,167	38,770,533
Capital and reserves
Share capital			196,393	196,393
Treasury shares			(247,428)	-
Share premium			21,696,406	21,696,406
Asset revaluation reserve			3,839,923	3,839,923
Foreign currency translation reserve			1,641	(404)
Retained earnings			22,091,767	19,336,340
Net equity			47,578,702	45,068,658
Total equity and liabilities			93,000,654	97,668,841

UNAUDITED CONSOLIDATED STATEMENT OF CASHFLOWS

		2014	2013
		US$	US$
Cash flows from operating activities
Profit before taxation		2,966,066	4,081,734
Adjustments for:
Depreciation expense		4,483,105	3,425,178
Interest expense		2,988,600	2,076,857
Interest income		(10,686)	(12,375)
Unrealised foreign exchange differences		2,045	603
Operating cash flows before changes in working capital		10,429,130	9,571,997
Movements on:
Trade and other receivables		592,552	2,282,991
Trade and other payables		213,710	387,352
Cash flows from operations		11,235,392	12,242,340
Interest paid		(2,860,314)	(1,829,434)
Interest received		10,686	12,375
Corporation tax paid		(37,712)	(109,376)
Net cash flows from operating activities		8,348,052	10,315,905
Investing activities
Cash inflow from disposal of a subsidiary		-	1,125,032
Purchase of property, plant and equipment		(2,004)	(22,479,404)
Net cash flows used in investing activities		(2,004)	(21,354,372)
Financing activities
Dividend paid		-	(690,000)
Purchase of treasury shares		(247,428)	-
Proceeds from loans and borrowings		1,500,000	22,000,000
Repayment of loans and borrowings		(9,193,154)	(7,363,090)
Cash flows (used in) from financing activities		(7,940,582)	13,946,910
Net increase in cash and cash equivalents		405,466	2,908,443
Cash and cash equivalents at the beginning of the financial year		5,717,013	2,808,570
Cash and cash equivalents at the end of the financial year		6,122,479	5,717,013

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.

 

END

 

 

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