Aircraft lessor Avation (LON:AVAP) predicted higher annual profits despite facing interest payments on loans to expand the business.
Avation said moves to lease new jets to customers should significantly boost second-half lease revenues and lead to higher earnings by the end of the financial year. The company issued the first US100mln tranche of a US500mln global medium term note programme in May 2015 to help it buy new aircraft.
It said it would make its first interest payment to noteholders this week and it would face a US2.1mln interest overhang in the six-month period. But the group added in a trading update: “Fortunately this interest overhang issue is expected to be resolved for the second half of this fiscal year with bond funds fully deployed.” Avation has bought five aircraft since July and has completed three of the deals with the other two set to close by the end of the half-year.
Trade with the best data, contact us
AVATION closed down -5.000 at 128.000. Volume was 28% below average (neutral) and Bollinger Bands were 16% narrower than normal.
Open High Low Close Volume___
133.000 132.500 126.000 128.000 83,047
Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 133.02 139.18 141.57
Volatility: 22 37 38
Volume: 34,207 172,643 84,690
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
Summary
AVATION is currently 9.6% below its 200-period moving average and is in an downward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect very strong flows of volume into AVAP.L (bullish). Our trend forecasting oscillators are currently bearish on AVAP.L and have had this outlook for the last 17 periods. Our momentum oscillator is currently indicating that AVAP.L is currently in an oversold condition.
In the last month it announced two narrow body aircraft purchases in addition to the growth forecast provided in early September. One of the jets was the company’s first Boeing 737-800 acquisition which is now flying with Chinese carrier Shenzhen Airlines.
The other was an Airbus A320 flown by Germany’s Air Berlin which extends Avation’s customer list to 11 airlines in Asia Pacific and Europe about double the total at the end of June. It says further aircraft deliveries to customers should take its monthly lease revenue to more than US7.5mln for the first time.
Chief executive Jeff Chatfield said the group was not currently targeting wide-body aircraft but was likely to expand if if could reduce its debt costs. He said the group expected to increase fleet assets from a book value of US434mln at the end of June to almost US750mln in March 2016. “This represents over 70% growth” Chatfield said. “These fundamental growth initiatives are expected to propel the second half result to show a significant increase in lease revenues and lead to increased earnings by the end of the financial year.” Shares in Avation fell 3p or 2.3% to 130p in early afternoon London trading.
The post Avation PLC (LON:AVAP) Expanding appeared first on Live Trading News.