RNS Number:7430H
Advent Air Limited
14 November 2007
14th November 2007, RNS
AIM Code AAIR (effective 20th November AIM code SKYW)
Advent Air Limited
("Advent Air" or the "Company")
Audited Results for the 12 months ended 30th June 2007
Highlights in Results
* Revenues increased to $130m up from $98m the prior year;
* Group EBITDAR increased to $26.6m up from $17.85m the prior year with the
pre-tax profits increasing to $12.7m up from $5.7m in the prior year;
* Group Net Profit after Tax increased to $7.966m up from $3.9m the prior
year notwithstanding tax charges of $4.77m;
* Final Dividend payment for the year of 1.8 cents per share;
* Company proposes further share buybacks and other capital management
initiatives;
* Report of improvements in operating performance and profit margin; and
* Company to be renamed Skywest Airlines Ltd effective 20th November 2007
with new code on AIM to be SKYW.
The results for the full year ended 30 June 2007 based on the Audited Financial
Statements (as audited under Singapore Financial Reporting Standards) as
reported are as follows along with an equivalent in Pounds Sterling:
Consolidated Audited GBP Equivalent
12 months ended 30 June 2007 (ii)
In Singapore In GBP
Dollars
Revenue from ordinary activities 130,485,459 43,639,557
EBITDAR 26,656,540 8,915,013
(earnings before interest, tax,
depreciation and aircraft rental)
Net Profit after income tax 7,966,082 2,664,176
Profit attributable to 7,178,222 2,664,176
shareholders
Earnings Per Share 3.61 cents 1.21 pence
Second and Final Dividend per 1.8 cents 0.602 pence
share
Dividend Payout Ratio 1.33 1.33
Enquires:
Advent Air Ltd (Skywest Airlines Ltd) 07783 942 553
Jeff Chatfield, Executive Chairman
Nominated Adviser 0207 220 1666
James Joyce/David Porter, W H Ireland Limited
Stockbrokers
W H Ireland Limited 0207 220 1690
Financial Public Relations
Bishopsgate Communications 0207 562 3350
Maxine Barnes
Nick Rome
Websites:
www.advent.com.sg
www.skywest.com.au
Notes:
(i) As at the date of this report Skywest Ltd (since renamed A.C.N. 098 904 262
Pty Ltd) is now a 100% wholly owned subsidiary. The Company results are
audited under Singapore Financial Reporting Standards ('SFRS') and are
required to be reported to shareholders. The Company's principal operating
subsidiary Skywest Ltd and Skywest Airlines Pty Ltd are audited by KPMG
under Australian International Financial Reporting Standards. Under the AIM
Rules, the Company is required to publish by 31 December 2007 Annual
Audited Accounts prepared in accordance with certain specified Accounting
Standards, which in the Company's case will be International Accounting
Standards ('IFRS'). The Company will therefore be preparing Accounts
audited to IFRS shortly. Shareholders should note that the Accounts under
SFRS state 'that the adoption of IFRS did not result in substantial changes
to the Group's accounting policies' and these accounts are in accordance
with Singapore company law being sent to shareholders and will also be
available from the Company's registered office: 510 Thomson Road, #12-04
SLF Building, Singapore 298 135 and on the Company's website:
www.advent.com.sg. Any material changes in the Audited Accounts under IFRS
will be announced on RNS in due course.
(ii) In this announcement the applicable exchange rate between GBP and SGD at
the average exchange rate of 0.33444 which was used in the presentation of
the accounts. This exchange rate will be used for the payment of the
proposed final dividend.
Executive Chairman's Statement regarding the operations and the results
The Company announces the completion of a satisfactory year in which we managed
to achieve continuing improvements in operating performance along with an
increased profit margin. Group revenues for the year increased to S$130 million
compared to S$98 million in the last year. EBITDAR increased to S$26.6 million.
Profit before tax increased to S$12.6 million, net group profit attributable to
the shareholders of the Company was S$7.1 million, an increase over the S$4
million in the prior year. The Company is proposing further capital management
initiatives including share buybacks and other measures to better utilize the
strength of its currently under-leveraged balance sheet. Consolidated earnings
per share increased to 3.61 cents per share.
The Company intends to declare a second and final dividend for FY2007
representing a final payment of 1.8 cents per share, the payment of this final
dividend is subject to shareholder approval at the AGM. The payment timing will
be announced pursuant to the AGM notice.
Results for this financial year improved across several measures including
yield, revenue and profit increases, passenger number increases and revenue seat
passenger kilometers. The Group now includes 100% of the Skywest Airlines group
after a successful mop-up takeover offer with all remaining minority
shareholders bought out. As at the date of this announcement, the Group owns 7
aircraft, with 12 in operation in total. The Company estimates that the aircraft
operated and owned within the group have a useful life which will amount to 11
to 14 years of use. Safety is a major priority and Skywest has been managing a
Change Management Program.
The Company results were negatively impacted by certain issues including
increased corporation tax and fuel price increases. The Company has utilized the
majority of the carry forward historical tax losses from the years before
Skywest was under Company control. The taxes payable have increased to $4.77
million, this is a dramatic increase as in the prior year the taxes were
$1.078m. Fuel costs have continued to increase and remain a concern. The
experience of the Company indicates that hedging of fuel purchases has some
mitigating influence in delaying increases as does the Fuel Levy imposed on
ticket sales. Another area of concern is that the airline employees entitlements
including various vacation and leave provisions continue to increase faster than
the employees appear able to utilize them, a parameter which is becoming a
concern to Directors and one which shall receive appropriate attention in the
current period. Skywest has in place Enterprise Bargaining Agreements with its
Engineers and Pilots which have lead in recent years to a stable workforce. The
Company and subsidiaries is undergoing an on-going recruitment program for more
pilots, engineers and flight attendants.
Change of Name
The takeover of the remaining shares in Skywest Ltd by the Group is considered
to be successful with all companies now 100% owned. In view of the growth of
contribution in terms of profits for the group booked by Skywest Airlines and
pursuant to the approval granted by shareholders on the 15th of May 2006 the
directors have taken steps to change the name of the Company to "Skywest
Airlines Ltd".
Pursuant to this process the name of the Company has been changed to "Skywest
Airlines Ltd" with effect from 20th November 2007.
Effective the 20th of November 2007, the new trading symbol for the Company will
be SKYW.
Capital Management
The Company has enjoyed a strong balance sheet, with net cash and ownership of 7
aircraft along with low borrowings. With a view to capital management and
increasing shareholder value the Company has been buying back shares for
cancellation. The Company repurchased and cancelled approximately 6.8 million
shares during the year. The Company will seek at the AGM shareholder approval to
continue this process.
Avation PLC Spin Off
The Company paid as a dividend all of the ordinary shares in Avation PLC to its
shareholders in a 1: 10 distribution. Avation PLC was listed on Plus Markets in
London during the financial year. Existing shareholders were rewarded with a
quoted share as a further dividend. As at the date of this report the shares in
Avation PLC were quoted at 68.5 pence per share. The result of the creation of
Avation PLC included that Skywest has an accommodating leasing company related
to it which seeks to service Skywest ongoing needs. This arrangement may be
useful as and when Skywest Airlines expands. It is the directors' opinion that
airlines prefer to lease some or all of their fleet for two main reasons:
leasing provides operational leverage so as to give an airline flexible access
to more aircraft and also that there is a lowering of the ownership risk to
shareholders. This ownership risk relates to the concept that the valuations of
airlines are correlated strongly to the resale values of the planes themselves.
Airlines are a cyclical industry and spinning off the ownership risk associated
with some of the aircraft fleet lowers the overall risk to the shareholders of
the airline in any future downturn in airline or aircraft market conditions.
Skywest's Exclusive Sole Operating Rights
Skywest is the operator of services on the coastal network of Western Australia
under an exclusive right granted by the Government of Western Australia for a
term of 3 years commencing January 2006, with an option for a further 2-year
extension. This exclusive right now represents approximately 50% of the
Company's passenger numbers.
Fuel
Fuel continues to be a concern. Skywest maintains a fuel levy on its ticket
sales, which is reviewed and adjusted from time to time by the management.
Core Market Outlook
The Company's airline revenues are expected to continue to grow on the Skywest
traditional routes including Albany, Esperance, Geraldton, Carnarvon, and
Exmouth. Skywest continues to seek opportunities for growth and in particular is
focusing on securing additional charter business as result of opportunities
presenting from the robust mining and resource industry in Western Australia.
The Company believes that activity within the mining and resource sectors remain
the key driver for increased passenger numbers. Skywest is in the process of
announcing new routes and additional frequencies including routes such as
Kalgoorlie - Melbourne. Skywest recently was entered into the Western Australian
Tourism Hall of Fame after winning a major Tourism Award in 3 consecutive years.
Tourism remains a key interest to the Company and we seek to expand our tourism
related services. Skywest has joined the VirginBlue Velocity loyalty program so
as to seek to improve its appeal to travelers and tourists. The group has
increasing focus on ancillary revenue sources such as that which result from
partnerships with Avis, Wotif and Mondial Insurance. Other recent initiatives
include a carbon offset program in the form of the SkyGreen initiative. The
Company is continuing with its A320 project.
The Western Australian economy is strong which is being lead by an expanding
resources sector. A strategy of the Company is that we seek to obtain long term
scheduled charter contracts with the major mining companies operating in the
Northern Territory and Western Australia. This strategy has increased the
scheduled charter revenue from a low base in 2003 to approximately $45 million
in FY07. The Company seeks to service its clients with a reliable, on time and
safe air services. The Company has been successful in providing services to
Argyle Diamonds, BHP Billiton, Rio Tinto, Fortescue Metals Group, Macmahon,
Portman Iron Ore, Barminco and Newmont. To facilitate this strategy the Company
has leased more F100 jets and made certain improvements in scheduling and
operations so as to improve its on time performance. Bidding for more scheduled
charters, on time performance and the safety management systems will remain key
areas of management attention in the coming year. Skywest is pleased that it
recently achieved a 3 year roll-over of its Air Operators Certificate, prior to
this year 2 years was the typical extension granted by the Aviation Regulator
CASA.
In due course an annual report and notice of meeting for the Annual General
Meeting will be posted to shareholders. The Company shortly will have available
a set of accounts audited under IFRS. Interested persons can view these on the
Company website or may request a hard copy by contacting the Company. Copies of
the annual report will be available on the company website at www.advent.com.sg,
and at the offices of the Company.
R J (Jeff) Chatfield
Executive Chairman
Financial Statements,
Audited Consolidated Group Income Statement
In Singapore dollars 12 months ended 12 months ended
30 June 2007 30 June 2006
Revenue 130,485,459
98,948,644
Cost of sales (63,492,515)
(51,333,293)
Gross profit 66,992,944
47,615,351
Other income 1,160,884
4,730,458
Administrative expenses
(41,271,278) (33,926,136)
Other expenses
(226,010) (566,936)
Earnings before rental of aircraft, depreciation and 26,656,540
finance cost 17,852,737
Rental of aircraft
(5,735,877) (6,103,590)
Depreciation
(7,951,259) (5,495,449)
Finance cost
(273,095) (456,701)
Earnings after rental of aircraft, depreciation and
finance cost 12,696,309 5,796,997
Income tax
(4,730,227) (1,078,288)
Profit after income tax
7,966,082 4,718,709
Minority interests (750,022)
(787,860)
Profit attributable to shareholders of the company
7,178,222 3,968,687
Earnings per share 3.61 cents 3.08 cents
Audited Consolidated Balance Sheet
In Singapore dollars 30 June 2007 30 June 2006
ASSETS
Non-current assets
Fixed assets 42,616,763 29,981,443
Goodwill 17,278,267 9,710,276
59,895,030 39,691,719
Current assets
Available for sale financial assets 1,144,071 26,598
Inventories 1,213,360
1,023,708
Trade receivables 12,321,944 5,373,692
Other receivables 3,485,581 3,474,172
Cash 14,528,864 24,543,185
32,693,820 34,441,355
Total assets 92,588,850 74,133,074
EQUITY AND LIABILITIES
Equity
Share capital 43,049,248 41,167,116
Assets revaluation reserve 625 625
Currency translation reserve 2,439,541 42,027
Accumulated profits 2,028,860 (3,433,132)
47,518,274 37,776,636
Minority interests - 7,786,026
47,518,274 45,562,662
Non-current liabilities
Borrowings 5,295,481 -
Deferred tax liabilities 3,607,110 984,629
Provisions 86,653 169,221
8,989,244 1,153,850
Current liabilities
Trade payables 6,528,429 10,733,074
Other payables 21,704,558 12,517,815
Borrowings - 86,517
Provisions 5,327,552 3,803,701
Income tax payable 2,520,793 275,455
36,081,332 27,416,562
Total liabilities and equities 92,588,850 74,133,074
Consolidated cash flow statement for the financial year ended 30 June 2007
12 months 12 months
ended ended
30/06/2007 30/06/2006
Cash flows from operating activities
Profit before income tax 12,696,309 5,796,997
Adjustments for:
Allowance for doubtful debts 258,353 66,690
Allowance for doubtful debts release (258,353) (176,173)
Allowance for stock obsolescence 76,310 100,083
Assets written off 1,382,448 57,945
Deemed gain on disposal of subsidiary - 118,439
Depreciation charges 7,951,259 5,495,449
(Gain)/ loss on disposal of assets (15,964) 56,519
Interest paid 273,095 456,701
Interest received (835,086) (471,544)
Provision for aircraft handback 466,997 (16,293)
Operating profit before working capital changes 21,995,368 11,484,813
Inventories (265,962) (189,076)
Trade and other receivables (6,959,661) 1,891,747
Trade and other payables 5,956,384 (3,616,890)
Cash generated from operations 20,726,129 9,570,594
Interest paid (273,095) (456,701)
Interest received 835,086 471,544
Income tax paid (136,172) (199,610)
Net cash generated from operating activities 21,151,948 9,385,827
Investing activities
Acquisition of additional interest in subsidiary (16,156,796) -
Acquisition of available-of-sale financial assets (1,117,473) (80,404)
Acquisition of property plant and equipment (19,453,463) (8,539,642)
Proceeds from sales of property, plant and equipment 21,907 64,939
Net cash (used in) investing activities (36,705,825) (8,555,107)
Financing activities
Dividends paid on ordinary shares (1,716,230) (4,425,584)
Proceeds from borrowings 5,295,481 -
Proceeds from shares issued 1,882,132 24,939,148
Repayment of borrowings (86,517) (6,662,644)
Net cash generated from financing activities 5,374,866 13,850,920
Net (decrease)/ increase in cash and cash equivalents (10,179,011) 14,681,640
Net effect of exchange difference in consolidation of
foreign subsidiaries 164,690 (341,724)
Cash and cash equivalents at beginning of year 24,543,185 10,203,269
Cash and cash equivalents at end of year 14,528,864 24,543,185
Notes:
1. The company intends to declare a final dividend 1.8 cents (Singapore)
per share.
2. The results for the period are derived from continuing activities.
3. The audited results have been prepared on a going concern basis and on the
basis of the accounting policies adopted in the audited accounts for the
period ended 30 June 2007
This information is provided by RNS
The company news service from the London Stock Exchange
END
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