Avation PLC Reports Strong Half-Year Results with Improved Revenue and EBITDA
Why we think this is good
Avation PLC has demonstrated significant improvements in its half-year results, with notable increases in revenue, EBITDA, and operating profit. The company's fleet utilization remains at 100%, indicating strong demand for its services. Additionally, the reduction in net indebtedness and improved net debt to EBITDA ratio suggest better financial health. The positive outlook for the aviation industry, coupled with the company's expansion plans, further supports the optimistic view. However, the continued loss before taxation and slight increase in the cost of debt prevent this from being an overwhelmingly positive assessment.
Key Points
- Revenue increased to US$55.4 million (2023: US$46.3 million)
- EBITDA rose to US$55.6 million (2023: US$38.3 million)
- Operating profit increased to US$18.8 million (2023: US$17.5 million)
- Net indebtedness reduced by US$45.2 million to US$606.3 million
- 100% fleet utilization maintained throughout the period
- Agreement signed to purchase an Airbus A320 on lease to Etihad Airlines
- Loss before taxation of US$9.769 million (2023: US$9.583 million loss)
- Net asset value per share increased 3.2% to £2.94
- Weighted average cost of total debt increased to 6.6% (30 June 2024: 6.4%)
- Positive outlook with plans for further fleet growth and refinancing opportunities
Summary
Avation PLC's half-year report for the period ended 31 December 2024 shows significant improvements in key financial metrics. Revenue increased to US$55.4 million from US$46.3 million in the previous year, while EBITDA rose to US$55.6 million from US$38.3 million. The company maintained 100% fleet utilization throughout the period, demonstrating strong demand for its services. Notably, net indebtedness reduced by US$45.2 million to US$606.3 million, improving the company's financial position. Avation has also signed an agreement to purchase an Airbus A320 on lease to Etihad Airlines, enhancing its customer diversification. The outlook remains positive, with plans for further fleet growth and potential refinancing opportunities. However, the company still reported a loss before taxation of US$9.769 million, slightly higher than the previous year. The most recent broker target from Canaccord Genuity of 285.00p suggests significant upside potential from the current share price of 145.00p.