LSE:AVAP

Stock Analysis Report

Executive Summary

Avation PLC, together with its subsidiaries, leases commercial passenger aircraft to airlines worldwide.

Rewards

Trading at 67% below its fair value

Revenue is forecast to grow 7.61% per year

Earnings grew by 28.5% over the past year

Risk Analysis

Interest payments are not well covered by earnings

Unstable dividend track record

Large one-off items impacting financial results

Shareholders have been diluted in the past year



Snowflake Analysis

Undervalued with proven track record and pays a dividend.

Share Price & News

How has Avation's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: AVAP has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.4%

AVAP

1.0%

GB Trade Distributors

0.1%

GB Market


1 Year Return

2.5%

AVAP

19.5%

GB Trade Distributors

9.8%

GB Market

Return vs Industry: AVAP underperformed the UK Trade Distributors industry which returned 19.5% over the past year.

Return vs Market: AVAP underperformed the UK Market which returned 9.8% over the past year.


Shareholder returns

AVAPIndustryMarket
7 Day-0.4%1.0%0.1%
30 Day-3.6%2.2%-0.2%
90 Day-11.5%6.3%2.0%
1 Year5.6%2.5%24.6%19.5%15.5%9.8%
3 Year50.3%39.9%43.0%29.8%20.1%4.8%
5 Year96.1%77.1%80.3%56.1%44.5%11.5%

Price Volatility Vs. Market

How volatile is Avation's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Avation undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: AVAP (£2.67) is trading below our estimate of fair value (£8.08)

Significantly Below Fair Value: AVAP is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: AVAP is good value based on its PE Ratio (8.7x) compared to the Trade Distributors industry average (15.1x).

PE vs Market: AVAP is good value based on its PE Ratio (8.7x) compared to the UK market (17.2x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate AVAP's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: AVAP is good value based on its PB Ratio (0.9x) compared to the GB Trade Distributors industry average (1.8x).


Next Steps

Future Growth

How is Avation forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

7.6%

Forecasted annual revenue growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if AVAP's forecast earnings growth is above the savings rate (0.5%).

Earnings vs Market: Insufficient data to determine if AVAP's earnings are forecast to grow faster than the UK market

High Growth Earnings: Insufficient data to determine if earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: AVAP's revenue (7.6% per year) is forecast to grow faster than the UK market (3.6% per year).

High Growth Revenue: AVAP's revenue (7.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: AVAP's Return on Equity is forecast to be low in 3 years time (13.3%).


Next Steps

Past Performance

How has Avation performed over the past 5 years?

14.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: AVAP has a large one-off gain of $10.2M impacting its June 30 2019 financial results.

Growing Profit Margin: AVAP's current net profit margins (21.5%) are higher than last year (18.2%).


Past Earnings Growth Analysis

Earnings Trend: AVAP's earnings have grown by 14% per year over the past 5 years.

Accelerating Growth: AVAP's earnings growth over the past year (28.5%) exceeds its 5-year average (14% per year).

Earnings vs Industry: AVAP earnings growth over the past year (28.5%) exceeded the Trade Distributors industry 5.7%.


Return on Equity

High ROE: AVAP's Return on Equity (10.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Avation's financial position?


Financial Position Analysis

Short Term Liabilities: AVAP's short term assets ($119.1M) exceed its short term liabilities ($88.5M).

Long Term Liabilities: AVAP's short term assets ($119.1M) do not cover its long term liabilities ($1.1B).


Debt to Equity History and Analysis

Debt Level: AVAP's debt to equity ratio (452.1%) is considered high.

Reducing Debt: AVAP's debt to equity ratio has increased from 254.3% to 452.1% over the past 5 years.

Debt Coverage: AVAP's debt is not well covered by operating cash flow (6.8%).

Interest Coverage: AVAP's interest payments on its debt are not well covered by EBIT (1.3x coverage).


Balance Sheet

Inventory Level: AVAP has a low level of unsold assets or inventory.

Debt Coverage by Assets: AVAP's debt is not covered by short term assets (assets are 0.1x debt).


Next Steps

Dividend

What is Avation's current dividend yield, its reliability and sustainability?

3.02%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Avation before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company3.0%marketbottom25%2.0%markettop25%5.2%industryaverage2.4%forecastin3Years3.5%

Current dividend yield vs market & industry

Notable Dividend: AVAP's dividend (3.02%) is higher than the bottom 25% of dividend payers in the UK market (1.95%).

High Dividend: AVAP's dividend (3.02%) is low compared to the top 25% of dividend payers in the UK market (5.19%).


Stability and Growth of Payments

Stable Dividend: AVAP's dividend payments have been volatile in the past 10 years.

Growing Dividend: AVAP's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (26.1%), AVAP's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: AVAP's dividends in 3 years are forecast to be well covered by earnings (25.3% payout ratio).


Next Steps

Management

What is the CEO of Avation's salary, the management and board of directors tenure and is there insider trading?

1.8yrs

Average management tenure


CEO

Avation has no CEO, or we have no data on them.


Management Age and Tenure

1.8yrs

Average Tenure

52yo

Average Age

Experienced Management: AVAP's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Age and Tenure

6.8yrs

Average Tenure

55yo

Average Age

Experienced Board: AVAP's board of directors are considered experienced (6.8 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.8%.


Management Team

  • Jeff Chatfield (55yo)

    Executive Chairman

    • Tenure: 13.9yrs
    • Compensation: US$803.00k
  • Richard Wolanski (49yo)

    Finance Director

    • Tenure: 0yrs
  • Rod Mahoney (61yo)

    Chief Commercial Officer & Executive Director

    • Tenure: 8yrs
    • Compensation: US$637.00k
  • Duncan Gerard Stephen Scott (45yo)

    Group General Counsel & Company Secretary

    • Tenure: 0yrs
  • Iain Cawte (52yo)

    Chief Financial Officer

    • Tenure: 1.4yrs
  • Magdalene Ang

    Technical Manager

    • Tenure: 6.4yrs
  • Ashley Nicholas

    Director of Corporate Finance

    • Tenure: 3.1yrs
  • Karl Ryan

    Vice President of Marketing

    • Tenure: 2.1yrs
  • Angus Greene

    Senior Vice President of Marketing for the Europe

    • Tenure: 0.9yrs
  • Jasmine Siow

    Company Secretary

    • Tenure: 0.6yrs

Board Members

  • Jeff Chatfield (55yo)

    Executive Chairman

    • Tenure: 13.9yrs
    • Compensation: US$803.00k
  • Rod Mahoney (61yo)

    Chief Commercial Officer & Executive Director

    • Tenure: 8yrs
    • Compensation: US$637.00k
  • Stephen John Fisher (55yo)

    Independent Non-Executive Director

    • Tenure: 5.7yrs
    • Compensation: US$45.00k
  • Derek Sharples

    Independent Non-Executive Director

    • Tenure: 3.1yrs
    • Compensation: US$45.00k

Company Information

Avation PLC's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Avation PLC
  • Ticker: AVAP
  • Exchange: LSE
  • Founded: 2006
  • Industry: Trading Companies and Distributors
  • Sector: Capital Goods
  • Market Cap: UK£168.108m
  • Shares outstanding: 63.08m
  • Website: https://www.avation.net

Number of Employees


Location

  • Avation PLC
  • No.01-01, 65 Kampong Bahru Road
  • Singapore
  • 169370
  • Singapore

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
AVAPLSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 2007

Biography

Avation PLC, together with its subsidiaries, leases commercial passenger aircraft to airlines worldwide. As of June 30, 2018, the company managed a fleet of 38 aircraft. It is also involved in the financin ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/09 20:47
End of Day Share Price2019/12/09 00:00
Earnings2019/06/30
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.