AVATION PLC FINANCIAL RESULTS AND INTERIM MANAGEMENT REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2013

Avation PLC (LSE: AVAP) the commercial passenger aircraft leasing company is pleased to announce unaudited financial statements for the Company and its subsidiaries for the six-month period ended 31st December 2013.

The financial highlights, year on year, are:
• Revenues increased by 21% to US$24,560,737, with Gross Profit increasing by 24%;
• Consolidated net profit before tax of Avation PLC increased by 15% to US$7,894,478;
• Earnings per share of 11.6 cents (US$) were recorded;
• Increased number of aircraft in the fleet from 19 to 24;
• Placed a firm order for five additional ATR 72 for delivery in 2015;
• The granting to Avation of five additional Purchase Rights for new ATR 72 aircraft; and
• Total number of aircraft under order or option for future delivery increased to 40 as at 31 December 2013.

Commenting today, Avation PLC Chairman, Jeff Chatfield said:
“The Board of Directors is pleased with the significant growth in the Avation aircraft leasing business. The Company, by way of revenue from leased aircraft assets, continued to deliver outstanding growth in the core aircraft business and successfully completed a sale of an aircraft to a customer pursuant to an option exercise.

“Avation also secured long term growth with the addition of purchase rights for future aircraft that takes the total future deliveries to 27 aircraft in addition to the thirteen firm aircraft scheduled to be delivered.

“The business continues to grow and perform strongly, with recent re-financing transactions releasing equity to fund further deliveries along with a warehouse facility to support lease attached aircraft acquisitions. We are confident that our strategy provides for continued and sustainable growth for the remainder of 2014 and beyond.”

Further information on Avation PLC can be seen at: www.avation.net. Avation PLC is registered in England and Wales with its operational headquarters in Singapore.

Statement by the Executive Chairman, Jeff Chatfield:

Dear Fellow Shareholder,

Introduction
Your Board is pleased to report that during the six month period ended 31st December 2013 the consolidated net profit after tax moved ahead to US$6,175,649 on increased revenues of US$24,560,737 with earnings per share rising to 11.6 cents. Returns principally comprise cash yield (income) from aircraft lease payments after repayment of associated debt obligations.

The revenue growth increase to US$24,560,737 is consistent with the expectations of 30th June 2013 and a result of the continued expansion in the ATR 72 and jet fleet, together with the sale of a brand new ATR 72 aircraft to a customer presented within other income, which signifies an increase in the scope of operations to include aircraft sales.

As at 31 December 2013, total assets increased to US$407,014,349. Corresponding liabilities increased to US$303,936,845 resulting in net assets of US$103,077,504.

Fleet Development
The Company’s aircraft fleet currently comprises 24 aircraft all of which are 100 per cent utilised and generate a gross rental yield of 14 per cent, based on book value as at 31 December 2013, from a current customer base of airlines in Australia, Europe and North America.

The fleet is comprised of a diverse range of commercial passenger aircraft, including new ATR 72 turbo-prop and Airbus A320, Airbus A321 and Fokker 100 jet aircraft. In addition to leasing these aircraft, Avation completed the first sale of an ATR 72 aircraft during the period. The transaction is recorded on a net income basis. Avation also provides active fleet and financial management to ensure the retention of asset values and the maximisation of earnings.

The ATR 72 fleet now stands at 13 delivered, with eight additional aircraft scheduled for delivery by December 2014 and five in 2015.

Funding
The weighted average cost of capital for the period was 5.5 per cent on debt funding for the fleet. Subsequent to the end of the reporting period the Company secured material re-finance of two ATR aircraft, a transaction that demonstrates the bankability of the core aircraft of the Avation fleet and positions the Company well to obtain access to the necessary debt for future deliveries. Access to funding nevertheless remains a risk, which is common to all businesses that are leveraged and capital intensive. Specific aviation based industry risks are also present and include the creditworthiness of client airlines.

Dividend
As announced at the Annual General Meeting held on 4 November 2013 the Company paid a final dividend of 1.78 cents per share on 25 November 2013.

Outlook
The Board of Directors is strongly committed to developing the Avation business further and confident that it can achieve continued and sustainable growth in 2014 as demonstrated through the eight aircraft to be delivered before the end of 2014. Looking forward, the Directors anticipate further increases in lease revenues if, as and when, ordered aircraft are delivered or additional aircraft are purchased. As at the date of this report the Company has firm orders for 13 ATR72 aircraft and options and purchase rights for an additional 27 aircraft.

Jeff Chatfield,
Executive Chairman
Singapore, 25 February 2014