CAPITAL LEASE AVIATION PLC 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.
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) |
'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 | +65 97354151 |
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 Tim Blythe / Wendy Haowei / Fergus Lane | 0207 138 3204 |
Website http://www.cl-aviation.com/ |
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 29th September 2015
2015 US$ | 2014 US$ | |
Continuing operations | (Restated) | |
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$653,214)
AUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 20152015 US$ | 2014 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 Movements on: Trade and other receivables | 12,499,169 (2,578,160) | 10,429,130 592,552 |
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
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