Annual Financial Report
AVATION PLC (the "Company")
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
CHAIRMAN'S STATEMENT
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2010
Dear Fellow Shareholder,
On behalf of your Board of Directors, I present to you the audited financial statements for Avation PLC and its
subsidiaries for the year ended 30th June 2010 and to inform you of the progress that the Avation Group has made.
A key milestone achieved, subsequent to year end, is the successful admission to a standard listing on the Main
Market of the London Stock Exchange on the 6th of October 2010. As a consequence we now present our first set of
annual results as a Main Board company.
The highlights are:
* Consolidated net profit after tax: GBP 1,653,027
* Revenues of: GBP 17,552,513
* Earnings per share of: 6.39 pence.
* Increased dividends to: 0.6 pence per share
Your Board is pleased to report that in respect of the year ending 30th June 2010 the consolidated net profit after
tax was GBP 1,653,027 on revenues of GBP 17,552,513 with earnings per share of 6.39 pence.
The operating businesses had a good year with excellent cash flows being recorded across the Group. In the prior
financial year the Group enjoyed a one-off foreign exchange gain of GBP 1.4m, the profits reported this year are
from recurring business with no extraordinary gains. Therefore, the earnings presented at 6.39 pence per share are
the underlying earnings based on the current asset base of aircraft.
The business has continued to grow and we have increased the revenue base for the Group by 7.8%. As of June 30th
the asset base of the Group had increased to GBP 96,269,565. The Board of Directors now believe that they have
demonstrated that the Group has a sustainable business model which demonstrates consistent performance.
The Avation Group currently owns a fleet of 12 modern jet aircraft. The Group continues to seek further aircraft
acquisitions. Your Company is now growing both in profits and recurring revenues. Customers now include large
international airlines. The aircraft owned by the Group are Airbus A320 series and Fokker 100 jet aircraft.
Your Board recognises the importance of rewarding shareholders - the owners of the Company. Avation PLC has
previously paid dividends and conducted a capital management program by buying in shares for cancellation. Despite
the current economic conditions, the Company continues to prosper, and therefore your board is recommending to
shareholders a final dividend payment of 0.6 pence per share. The Company hopes to maintain a progressive dividend
policy going forward. The Company Annual General Meeting is scheduled to be held on the 2nd of December 2010.
Subject to shareholder approval at that meeting, a 2010 final dividend of 0.6 pence per ordinary share will be paid
on the 15th of December 2010. The Ex-Dividend Date is the 8th of December 2010 and the Associated Record Date is
the 10th of December 2010.
The Company and its subsidiaries have secured the bulk of its debt funding at a cost of around 6% per annum. Whilst
the Company believes that it can obtain access to further funds for the purchase of aircraft, access to funding
nevertheless remains a risk, this risk is common to all businesses that are capital intensive, such as your
business. Specific aviation based industry risks are also present and include the creditworthiness of client
airlines.
My colleagues and I are committed to continue to work tirelessly to build your Company into a respected,
profitable, diversified and cash generative aircraft leasing business. The Board would like to thank you - the
shareholders - for your continued support and goodwill and look forward to the future with confidence in the
successful development of Avation PLC.
Jeff Chatfield,
Chairman
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2010
2010 2009
---- ----
Continuing operations £ £
Revenue 17,552,513 16,278,212
Cost of sales (983,879) (871,494)
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Gross profit 16,568,634 15,406,718
Other income 5,948 1,477,929
Other operating expenses (8,864,955) (7,167,655)
Expenses
- Administrative expenses (841,892) (953,657)
- Finance expenses (3,319,635) (3,777,014)
----------- -----------
Profit before taxation 3,548,100 4,986,321
Taxation (729,517) (754,408)
----------- -----------
Profit from continuing operations for the year 2,818,583 4,231,913
Other comprehensive income
Gain on dilution of interest in subsidiary 1,733 -
Currency translation differences arising on consolidation 4,076,569 1,587,207
Revaluation gains on property, plant and equipment, net of tax - 2,305,841
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Other comprehensive income for the year, (net of tax) 4,078,302 3,893,048
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Total comprehensive income 6,896,885 8,124,961
----------- -----------
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Profit attributable to:
Equity holders of the parent 1,653,027 2,645,976
Non-controlling interest 1,165,556 1,585,937
----------- -----------
2,818,583 4,231,913
----------- -----------
Total comprehensive income attributable to:
Equity holders of the parent 4,069,879 6,107,187
Non-controlling interest 2,827,006 2,017,774
----------- -----------
6,896,885 8,124,961
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Earnings per share
- Basic - continuing and total operations 6.39 pence 10.40 pence
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- Fully Diluted - continuing and total operations 6.30 pence 9.22 pence
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COMPANY STATEMENT OF COMPREHENSIVE INCOME
2010 2009
---- ----
£ £
Profit for the year 262,668 212,424
Other comprehensive income - -
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Total comprehensive income for the year 262,668 212,424
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AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2010
2010 2009
---- ----
£ £
ASSETS
------
Current assets:
Cash and cash equivalents 1,227,881 1,039,321
Trade and other receivables 1,195,859 1,575,778
Inventories 707 493
----------- -----------
Total current assets 2,424,447 2,615,592
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Non-current assets
Property, plant and equipment 92,520,577 83,053,926
Goodwill 1,324,541 1,324,541
----------- -----------
Total non-current assets 93,845,118 84,378,467
----------- -----------
Total assets 96,269,565 86,994,059
----------- -----------
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LIABILITIES AND EQUITY
----------------------
Current liabilities:
Trade and other payables 3,818,692 3,851,566
Provision for taxation 18,368 292,823
Loans and borrowings 9,602,462 8,521,911
Short-term provisions 2,047,185 1,088,555
----------- -----------
Total current liabilities 15,486,707 13,754,855
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Non-current liabilities:
Trade and other payables 1,379,641 550,400
Loans and borrowings 39,123,267 40,253,227
Deferred tax liabilities 4,248,024 3,208,998
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Total non-current liabilities 44,750,932 44,012,625
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Equity attributable to shareholders:
Share capital 262,190 255,555
Share premium 1,249,258 1,216,336
Assets revaluation reserve 6,760,372 6,760,372
Capital redemption reserve 7,000 7,000
Foreign currency translation reserve 3,563,359 1,148,240
Share option reserve - 12,788
Retained earnings 11,434,226 9,897,773
----------- -----------
23,276,405 19,298,064
Non-controlling interest 12,755,521 9,928,515
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36,031,926 29,226,579
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Total liabilities and equity 96,269,565 86,994,059
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AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2010
2010 2009
---- ----
£ £
Cash flows from operating activities:
Profit before taxation 3,548,100 4,986,321
Adjustments for:
Depreciation expense 4,704,804 4,455,650
Claim on maintenance reserve 4,102,127 2,712,005
Foreign currency exchange adjustment gain - (1,420,401)
Interest expense 3,156,229 3,548,968
Interest income (5,948) (13,254)
----------- -----------
Operating profit before working capital changes 15,505,312 14,269,289
Movement in working capital:
Trade and other receivables 379,919 (1,212,912)
Inventories (214) 242
Trade and other payables 796,367 1,652,747
Short-term provisions (3,143,497) (453,809)
----------- -----------
Cash from operations 13,537,887 14,255,557
Interest paid (3,156,229) (3,366,505)
Interest received 5,948 13,254
Corporation tax paid (204,574) (1,066,989)
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Net cash from operating activities 10,183,032 9,835,317
Cash flows from investing activities:
Purchase of property, plant and equipment (1,237) (3,967,069)
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Net cash used in investing activities (1,237) (3,967,069)
Cash flows from financing activities:
Net proceeds from issuance of ordinary shares 39,557 12,421
Share buyback - (7,000)
Net proceeds from issuance of subsidiary's shares to minority 22,972 -
Dividends paid (131,095) (127,903)
Proceeds from borrowings - 3,210,035
Repayment of borrowings (4,283,186) (8,974,547)
Capital element of finance lease repayments (781,036) -
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Net cash used in financing activities (5,132,788) (5,886,994)
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Effects of exchange rates on cash & cash equivalents (4,860,447) (199,458)
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Net increase/(decrease) in cash and cash equivalents 188,560 (218,204)
Cash and cash equivalents at beginning of financial year 1,039,321 1,257,525
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Cash and cash equivalents at end of financial year 1,227,881 1,039,321
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Avation plc
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