TIDMAA4
RNS Number : 8199H
Amedeo Air Four Plus Limited
07 December 2020
AMEDEO AIR FOUR PLUS LIMITED (the "Company")
Legal Entity Identifier: 21380056PDNOTWERG107
HALF-YEARLY FINANCIAL REPORT
The Board of the Company is pleased to announce its results for
the period from 1 April 2020 to 30 September 2020.
To view the Company's half-yearly financial report please follow
the link below:
http://www.rns-pdf.londonstockexchange.com/rns/8199H_1-2020-12-7.pdf
The half-yearly financial report will also shortly be available
on the Company's website http://www.aa4plus.com .
In addition, to comply with DTR 6.3.5(1) please find below the
full text of the half yearly financial report.
For further information, please contact:
Administrative Enquiries:
JTC Fund Solutions (Guernsey) Limited
Tel: +44 (0) 1481 702400
Shareholder Enquiries:
Nimrod Capital LLP
Richard Bolchover
Marc Gordon
+44 (0) 207 382 4565
info@nimrodcapital.com
OF ANNOUNCEMENT
E&OE - in transmission
Amedeo Air Four Plus Limited
Consolidated
Half-Yearly Financial
Report (Unaudited)
From 1 April 2020 to 30 September 2020
Summary Information
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Trading The Specialist Fund Segment of the
London Stock Exchange's Main Market
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Ticker AA4
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SEDOL BKY41C6 (Effective from 28 September
2020)
BWC53H4 (Prior to compulsory redemption
on 28 September 2020)
ISIN GG00BKY41C61 (Effective from 28 September
2020)
GG00BWC53H48 (Prior to compulsory
LEI redemption on 28 September 2020)
21380056PDNOTWERG107
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Reporting Currency Sterling
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Launch Date / Share Price 13 May 2015 / 100p*
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Share Price 32.5p (as at 30 September 2020)
34.0p (as at 4 December 2020)
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Market Capitalisation GBP 146 million (as at 4 December
2020)
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Target Dividend The original target of 2.0625p per
share per quarter (8.25p per annum)
was suspended on 6 April 2020
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Dividend Payment Months January, April, July, October if
possible.
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Year End 31 March
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Stocks & Shares ISA Eligible
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Aircraft Registration Numbers A6-EEY, A6-EOB, A6-EOM, A6-EOQ, A6-EOV,
A6-EOX, A6-EPO, A6-EPQ, HS-THF, HS-THG,
HS-THH, HS-THJ
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Website www.aa4plus.com
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**On 28 September 2020, 214,083,243 ordinary shares (33.33%)
were compulsorily redeemed by the Company at 46 pence per share.
Key Advisers and Contact Information
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Directors Registered Office of the Company
Robin Hallam (Chairman) Ground Floor
David Gelber (Senior Independent Dorey Court
Director) Admiral Park
John Le Prevost St Peter Port
Laurence Barron Guernsey GY1 2HT
Contact details Telephone: +44 (0)1481 702400
Robin.Hallam@aa4plus.com
David.Gelber@aa4plus.com
John.LePrevost@aa4plus.com
Laurence.Barron@aa4plus.com
-----------------------------------------------
Asset Manager Liaison and Administration Oversight
Amedeo Limited Agent
The Oval Amedeo Services (UK) Limited
Shelbourne Road 29-30 Cornhill
Ballsbridge London
Dublin England EC3V 3NF
Ireland D04 T8F2
-----------------------------------------------
Administrator and Secretary Corporate and Shareholder Adviser
JTC Fund Solutions (Guernsey) Nimrod Capital LLP
Limited New Derwant House
Ground Floor 69 73 Theobalds Road
Dorey Court London
Admiral Park England WC1X 8TA
St Peter Port
Guernsey GY1 2HT
Telephone: +44 (0)1481 702400 Telephone: +44 (0)20 7382 4565
-----------------------------------------------
Registrar, Paying Agent and Transfer UK Transfer Agent
Agent JTC Registrars (UK) Limited
JTC Registrars Limited The Scalpel
Ground Floor 18th Floor
Dorey Court 52 Lime Street
Admiral Park London
St Peter Port England EC3M 7AF
Guernsey GY1 2HT
Telephone: +44 (0)1481 702 400
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Auditor Advocates to the Company (as
to Guernsey law)
KPMG
1 Harbourmaster Place Carey Olsen
IFSC Carey House
Dublin 1 Les Banques
DO1 F6F5 St Peter Port
Ireland Guernsey GY1 4BZ
-------------------------------------------
Solicitors to the Company (as Solicitors to the Company (as
to English law) to asset acquisition, financing
and leasing documentation)
Clifford Chance LLP
10 Upper Bank Street
Herbert Smith Freehills LLP London
Exchange House England
Primrose Street E14 5JJ
London
England Norton Rose Fulbright LLP
EC2A 2EG 3 More London Riverside
London
England
SE1 2AQ
-------------------------------------------
COMPANY OVERVIEW
Amedeo Air Four Plus Limited ("AA4" or the "Company") is a
Guernsey company incorporated on 16 January 2015. The Company
operates under the Companies (Guernsey) Law, 2008, as amended (the
"Law") and the Disclosure Guidance and Transparency Rules of the
UK's Financial Conduct Authority.
All of the Company's redeemable ordinary shares ("Shares") have
since 13 May 2015 been admitted to trading on the Specialist Fund
Segment ("SFS") of the London Stock Exchange's Main Market.
The initial and six subsequent share raisings resulted in the
issue and admission to trading on the SFS of 642,250,000 Shares
issued at an average offer price of 102 pence. On 28 September 2020
the Company compulsorily redeemed 214,083,243 Shares on a one for
three shares held basis as at 25 September 2020 paying a redemption
price of 46 pence per Share redeemed.
As at 4 December 2020, the last practicable date prior to the
publication of this report, the Company's total issued share
capital was 428,166,757 Shares trading at 34.0 pence per share
giving the Company a market capitalisation of GBP146 million.
Investment Objective and Policy
Since launch the Company's investment objective has been to
obtain income returns and a capital return for its shareholders by
acquiring, leasing and then selling aircraft (each an "Asset" and
together "Assets").
To pursue its investment objective, the Company sought to use
the net proceeds of placings and/or other equity capital raisings,
together with debt facilities, to acquire aircraft which it leased
to one of three major airlines. In February 2020 all aircraft
leased to Etihad Airways were disposed of and now the remaining
aircraft are leased either to Thai Airways International Public
Company Limited ("Thai Airways") or to Emirates.
Given the current COVID-19 crisis and the devastating affect it
has had upon the long-haul air travel industry, plus the fact that
one of the company's lessees, Thai Airways is now under bankruptcy
protection, the Board considers it unlikely that in the near term
there will be any further expansion of the Company but rather all
effort is concentrated on managing the current economic challenges
to ensure the Company's long term survival.
Investment Portfolio
As at the financial reporting date of 30 September 2020 the
Company had twelve wholly-owned aircraft owning subsidiaries and
two Irish leasing subsidiaries, see note 1 for further details.
Together the Company and its subsidiaries are known as the
"Group".
Distribution Policy
The Company aims to provide shareholders with a total return
comprising income from distributions through the period of the
Group's ownership of the Assets and a capital distribution upon the
sale, or other disposition of the Assets.
Up until December 2019 the Group regularly received income in
the form of lease payments and income distributions were made to
shareholders quarterly in accordance with the Company's then target
of a distribution to shareholders of 2.0625 pence per Share per
quarter.
However, on 6 April 2020, as a result of the impact of COVID-19
on the airline industry, the Company announced that the Board had
resolved to temporarily suspend the payment of any kind of
distribution to shareholders, as the Board's priority lay in
preserving the long-term financial stability of the Company for the
benefit of its shareholders and creditors. The Board considered
that maintaining the Company's liquidity was vital and prudent in
doing so .
On 13 October 2020, the Board declared a special dividend of
1.15 pence per Share and intends each quarter to assess what income
has been received which is appropriate and prudent for the Board to
pay to Shareholders by way of a dividend.
In the event that the Company is wound-up, shareholders may also
receive a capital return from the net proceeds of a sale of the
Assets.
Performance Overview
All payments due from Emirates were made in accordance with the
terms of the respective leases. However, Thai Airways are in
rehabilitation proceedings and Thailand's Central Bankruptcy Court
has appointed the Planning Committee to administer the formal
process. Discussions have commenced with the airline with the
potential for (limited) income and Amedeo Limited ("Amedeo" or the
"Asset Manager") has also arranged with lenders that debt servicing
can be limited to interest only on a three monthly basis and are
seeking to extend these arrangements. Please see the Chairman's
Statement and Asset Managers Report below for more information
regarding this process.
The Company declared no dividends during the period under
review. However one dividend of 1.15 pence per share was declared
after the end of the reporting period.
Return of Capital
Following the sale of an Asset the Board may, as it deems
appropriate at its absolute discretion, either return to
shareholders all or part of the net capital proceeds of such sale
(subject to satisfaction of the Solvency Test), or re-invest the
proceeds in accordance with the Company's investment policy,
subject to shareholder approval. Following the sale in February of
the two aircraft leased to Etihad, on 23 September 2020 the Company
announced the return to shareholders of GBP98.5 million of the
resultant proceeds by means of a compulsory redemption of one share
for every three shares held as at 25 September for a payment of 46
pence per each share redeemed. Accordingly, 214,083,243 ordinary
shares were redeemed and have now been cancelled.
Amedeo regularly monitors the market valuations of the Assets
and, subject to any lease obligations, will consider the most
appropriate time for the sale of any one or more of the Assets. The
Board will consider any recommendation from the Asset Manager as to
the sale of any Asset and proceed as the Board considers
appropriate.
Liquidation Resolution
Although the Company does not have a fixed life, the Articles
require that the Board convenes a Liquidation Proposal Meeting in
2029 or such other date as shareholders may approve by ordinary
resolution.
CHAIRMAN'S STATEMENT
I am pleased to report that we were able to return to
Shareholders c.GBP98.5 million on 28 September 2020 by way of a
compulsory redemption of one-third of the ordinary shares in the
capital of the Company at a redemption price of 46 pence per each
redeemed share. Due to the diversity of our shareholder base the
compulsory redemption route was considered the most equitable way
to treat all shareholders fairly. This resulted in the redemption
of 214,083,243 Shares.
Since the webinar we organised in June for our major
shareholders, which replaced the Factsheet we would normally have
produced at that time, we have continued to deal on a daily basis
with the issues facing the long-haul airline industry, to which
your company is mostly exposed. International travel has not
rebounded in the way predicted at the start of the COVID-19 crisis.
Airlines have used up much of the liquidity provided to them by
governments and shareholders, but the expected restoration in air
travel has been blighted by poor COVID-19 testing facilities, lack
of coordinated action by governments, increased infection rates and
the expected ending of many of the most generous furlough schemes.
More recently, many parts of the world have seen an increase in
rates of infection and it should be noted that many airlines are
now cutting rather than establishing their schedules and IATA has
noted that many airlines cannot cut costs to match their reduced
cash inflows.
In relation to the situation in Thailand, the country has not
reopened to tourism at present (its biggest industry). It expects
to have received 7m tourists this year, as opposed to 40m in 2019.
As the flag carrier for the country and an entity dependant on
tourist inflows, Thai Airways International Public Company Limited
("Thai Airways") has once again deferred restarting operations,
this time until 1 December 2020. Our A350-900 aircraft consequently
remain grounded. The aircraft have been recently inspected and at
the time of such inspection were being maintained in "flight ready"
status as opposed to long term storage status.
As previously noted, Thai Airways are in rehabilitation
proceedings and the Central Bankruptcy Court has now appointed the
Planning Committee to administer the formal process. The Asset
Manager, Amedeo Limited ("Amedeo" or the "Asset Manager") has
maintained dialogue with the airline operations staff and their
advisers and are now commencing dialogue with the Planners.
Discussions have commenced with the airline around the use of the
aircraft with the potential for (limited) income and Amedeo have
also arranged with lenders that debt service can be limited to
interest only on a three monthly basis and are seeking to extend
that arrangement. We therefore anticipate that we may have to fund
interest for a longer period from the existing arrangement in a
worst case scenario whilst the rehabilitation process is completed,
assuming the lenders are willing to grant principal deferrals for
that period in full.
We also wish to be in a position where, if negotiations with the
Planner about the ongoing use of our aircraft, prove
unsatisfactory, we are able to walk away from those negotiations
and take back the aircraft. The Board has therefore created a
contingency reserve of GBP30m to cover 18 months interest and funds
to allow us to repossess, store, remarket and return to service our
aircraft in 2022/23; if such becomes necessary. Overall, the
A350-900 has suffered one of the lowest value impairment of all
widebodies and we are focused on preserving your equity investment
in these aircraft with a view to weathering the storm, hopefully
reaching a satisfactory deal with a renewed and restored Thai
Airways. Repossession is very much a last resort and we would not
look to take such action without the most careful thought. However,
we regard the Planner's initial timeline of having a plan agreed
with all creditors within Q4 this year, and implemented and working
within Q1 next year, as being optimistic. We are working on the
basis that the timeline needs to be shifted at least two quarters
further out and that we will receive little or no income before the
end of Q2 next year from the Thai leases.
Emirates is a different story and we appreciate their
perseverance and wish them well in hopefully capturing market share
that will be left by shrinking airlines in the next few years.
Emirates continue to pay rent and they are returning aircraft to
service including some of the Company's own aircraft. However, we
believe the majority are B777-300ER aircraft operating for cargo
purposes. Only 12 A380s are back in service. Our two B777-300ER
aircraft have returned to service Emirates' operations, as well as
one of our A380 aircraft. As mentioned in a press release for the
carrier's Half-Year Financial Results, Emirates received a $2bn
equity injection and reported a solid cash position of AED 20.7bn
(US$ 5.6bn) as of 30 September 2020. We have assumed that Emirates
will continue to pay rent in full and we have seen some 1 hour
flights to keep the aircraft in a "flight ready" status.
More broadly, Qantas Airways have placed all their A380s into
long term storage, even the refurbished ones. The same applies to
Singapore International Airways, who will reportedly retire 7 of
its A380s. Lufthansa has announced that the B747-8 will be the
"flagship" of their long-haul fleet and the A380s will all be
stored. They evidently believe there may be a market for a 450 seat
aircraft but not a 550 seat aircraft. Etihad has removed its fleet
of Airbus A380s from its flight schedule until at least September
2021 and a return of these aircraft is uncertain. Finally Hi Fly
are returning their A380 to its owners and switching to their A330
aircraft at which point there will be no A380 operating under a
secondary lease of any kind.
Most appraisers have now adjusted their values to account for
COVID-19. We have held extensive and detailed discussions with
appraisers about the assumptions they have made about values. For
example, an appraisal which assumes a balance between supply and
demand is of no value if one's judgment is that the balance will be
heavily in favour of the buyer. The valuation results for the A380
are not pretty. The International Bureau of Aviation describe the
aircraft as "one of the worst casualties" of the downturn. One of
the advantages we may have, although making such a prediction is a
stab in the dark, is that as our first A380 comes off lease in
2026, it is possible that by then, international travel will have
come back to life as people realise that Zoom is no substitute for
human contact and seeing places with your own eyes. The contraction
in available supply as aircraft are permanently retired, as a
result of the pandemic and slow production rates, may create a need
for lift by the middle of the decade. However, much of the residual
value in scrapped aircraft is in its engines and there will be a
considerable oversupply of GP7270 engines in 2026 and thereafter.
We have had to manage our residual value expectations accordingly.
We are more positive about the A350-900 residuals because it is the
favourite, alongside the B787-9, to replace the "big" four engine
widebodies.
The B777-300ER remains the most successful widebody ever, with a
wide user base and now a freighter conversion programme.
Meanwhile, we have to manage a corporate structure which has 15
companies to be maintained, whilst only eight are producing income,
and we have to ensure that each borrowing entity can meet its
present and future obligations. The same structure, which was born
in rising markets, has very substantial long-term expenses which
are difficult to justify in the current crisis unless they are
providing a direct and verifiable benefit to shareholders. They eat
directly into funds available for paying off our debt before
leaving something for distribution to our shareholders.
Dividend
The Board declared an interim dividend in October 2020 of 1.15
pence per Share in respect of the financial year ending 31 March
2021. The Board well recognises that our shareholders have suffered
over the last few months by not receiving any income, and we wish
to restore this to the extent we can.
The landscape in which we are operating remains uncertain and
will throw up more changes and challenges before we are
finished.
I would like to thank Amedeo for their ceaseless efforts to do
the best they can for us, they have committed many resources to
this and they have, like JTC Fund Solutions (Guernsey) Limited,
responded to the many demands the Board has made on them over the
last six months.
Yours sincerely,
Robin Hallam
Chairman
Date: 7 December 2020
Asset M a nager's Report
On the invitation of the Directors of the Company, the following
commentary has been provided by Amedeo as Asset Manager of the
Company and is provided without any warranty as to its accuracy and
without any liability incurred on the part of the Company, its
Directors and officers and service providers. The commentary is not
intended to constitute, and should not be construed as, investment
advice. Potential investors in the Company should seek their own
independent financial advice and may not rely on this communication
in evaluating the merits of an investment in the Company. The
commentary is provided as a source of information for shareholders
of the Company but is not attributable to the Company.
CURRENT INVESTMENTS
Since launch in May 2015, Amedeo Air Four Plus Limited ("AA4" or
the "Company") has acquired eight Airbus A380, two Boeing 777-300ER
and four Airbus A350-900 aircraft. Two A380 aircraft were sold in
February 2020. The current fleet consists of six A380s and two
777-300ERs leased to Emirates and four A350-900 aircraft leased to
Thai Airways International Public Company Limited ("Thai"). All
aircraft are leased for a period of 12 years from each respective
delivery date. To complete the purchase of these aircraft,
subsidiaries of the Company entered into debt financing
arrangements which, together with equity proceeds, were used to
finance the acquisition of the twelve aircraft.
AA4 PORTFOLIO UPDATE
As set out in the Company's report to shareholders of 8 June
2020, discussions with Thai and the respective lenders around the
status of the Company's aircraft leased to Thai have been taking
place and remain in process. On 27 May, Thai submitted a petition
to Thailand's Central Bankruptcy Court to enter into a court
approved business rehabilitation procedure, which the Court
accepted. Following hearings on 17, 20 and 25 August that included
the presentation of objections and evidence from a small number of
creditors, the Court approved Thai's request on 14 September 2020.
From such time, the Court approved a seven-member "Planning
Committee", who will now proceed to strategize the carrier's
rehabilitation and seek to restructure Thai's debt and lease
obligations amongst other matters with a view to obtaining majority
creditor and Court approval. The Asset Manager has maintained
contact with the secured lenders of the four aircraft on lease to
Thai and awaits further news of the Planners' intentions, which
might not become clear until the end of 2020. In the meantime,
discussions have commenced around the potential for Thai to start
operation of certain aircraft, which could possibly include the
Company's aircraft, on a power by the hour (PBH) basis. While the
aircraft are in temporary storage, it would be preferable to see
these aircraft fly and earn some income for the Company.
Separately, the Thai government is involved in discussion with
eight other Thai airlines to provide potential COVID-19 related
support through a US$770m package. Thai Airways have been excluded
from this discussion at present due to the rehabilitation process,
but separate discussions may occur and further details are awaited
regarding this matter .
Further to the Company's report to shareholders of 8 June 2020,
no further discussion with Emirates and the respective lenders have
taken place. As indicated in the previous report, Amedeo initiated
discussions with Emirates and the Company's lending banks, however
an agreement could not be reached. At present, there are no further
updates from Emirates and the airline is not pushing for a deferral
of rental payment. Consequently, Amedeo considers the request to
have lapsed and the lending banks are no longer engaged. During
this time, Emirates has continued to fulfil its current lease
obligations .
T HE ASSETS
Lessee Model MSN REG Delivery Date Lease Expiry
Date
----------- ------------ ------- -------- --------------- --------------
A380-861 157 A6-EEY 04/09/2014 04/09/2026
Emirates
A380-861 164 A6-EOB 03/11/2014 03/11/2026
A380-861 187 A6-EOM 03/08/2015 03/08/2027
A380-861 201 A6-EOQ 27/11/2015 27/11/2027
A380-861 206 A6-EOV 19/02/2016 19/02/2028
A380-861 208 A6-EOX 13/04/2016 13/04/2028
B777-300ER 42334 A6-EPO 28/07/2016 28/07/2028
B777-300ER 42336 A6-EPQ 19/08/2016 19/08/2028
----------- ------------ ------- -------- --------------- --------------
A350-900 123 HS-THF 13/07/2017 13/07/2029
Thai
A350-900 130 HS-THG 31/08/2017 31/08/2029
A350-900 142 HS-THH 22/09/2017 22/09/2029
A350-900 177 HS-THJ 26/01/2018 26/01/2030
----------- ------------ ------- -------- --------------- --------------
The utilisation figures above represent the totals for each
aircraft from first flight to 31 October 2020.
RECENT TECHNICAL ACTIVITY
No significant technical events have been reported by Emirates
or Thai for this period. Emirates aircraft have been grounded from
the end of March 2020, with the exception of the B777-300ER
aircraft that have returned to service during this period. Fleet
last operated as per the dates listed below as of 31 October
2020:
-- MSN 157: 23 March 2020
-- MSN 164: 19 March 2020
-- MSN 187: 24 March 2020
-- MSN 201: 21 March 2020 (Local 1 hour flight on 18 August)
-- MSN 206: Now returned to service
-- MSN 208: 24 March 2020
-- MSN 42334: Now returned to service
-- MSN 42336: Now returned to service
Thai aircraft have been grounded from the end of March 2020.
Fleet last operated as per the dates listed below as of 31 October
2020:
-- MSN 123: 24 March 2020
-- MSN 130: 29 March 2020
-- MSN 142: 26 March 2020
-- MSN 177: 25 March 2020
Industry Update: COVID-19
On 28 September, The International Air Transport Association
(IATA) downgraded its traffic forecast for 2020 to reflect a
weaker-than-expected recovery, as evidenced by a dismal end to the
summer travel season in the Northern Hemisphere. IATA now expects
full-year 2020 traffic to be down 66% compared to 2019. The
previous estimate was for a 63% decline.
August passenger demand continued to be hugely depressed against
normal levels, with revenue passenger kilometres (RPKs) down 75.3%
compared to August 2019. This was only a slight improvement
compared to the 79.5% annual contraction in July. Domestic markets
continued to outperform international markets in terms of recovery,
although most domestic markets remained substantially down compared
to last year's performance. August capacity (available seat
kilometres or ASKs) was down 63.8% compared to a year ago, and load
factor plunged 27.2 points to an all-time low for August of 58.5%.
Based on flight data, the recovery in air passenger services was
brought to a halt in mid-August by a return of government
restrictions in the face of new COVID-19 outbreaks in a number of
key markets. Forward bookings for air travel in the fourth quarter
show that the recovery since the April low point will continue to
falter. Whereas the decline in year-on-year growth of global RPKs
was expected to have moderated to -55% by December, a much slower
improvement is now expected with the month of December forecast to
be down 68% on a year ago.
"August's disastrous traffic performance puts a cap on the
industry's worst-ever summer season. International demand recovery
is virtually non-existent and domestic markets in Australia and
Japan actually regressed in the face of new outbreaks and travel
restrictions. A few months ago, we thought that a full-year fall in
demand of -63% compared to 2019 was as bad as it could get. With
the dismal peak summer travel period behind us, we have revised our
expectations downward to -66%," said Alexandre de Juniac, IATA's
Director General and CEO.
EMIRATES
Half-Year 2020/21 Financial Results
Emirates gradually restarted scheduled passenger operations on
21 May. By 31 October, the airline was operating passenger and
cargo services to 104 cities and resumed A380 serviced flights to
select destinations. Customers can now enjoy the A380 experience on
flights to Cairo, Paris, London, Guangzhou, Toronto, Moscow, and
Amman with potentially more routes to be added, as the airline
continues to gradually deploy the A380 in line with increased
passenger demand.
In the first half of the 2020-21 financial year, Emirates loss
was AED 12.6bn (US$ 3.4bn), compared to last year's profit of AED
862m (US$ 235m). Emirates revenue, including other operating
income, of AED 11.7 billion (US$ 3.2bn) was down 75% compared with
the AED 47.3bn (US$ 12.9bn) recorded during the same period last
year. This result was due to severe flight and travel restrictions
around the world relating to the COVID-19 pandemic.
Reports that surfaced during March, of Emirates receiving an
equity injection were also confirmed in a press release from His
Highness (HH) Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief
Executive of Emirates and Group, in which he stated, "We have been
able to tap on our own strong cash reserves, and through our
shareholder and the broader financial community, we continue to
ensure we have access to sufficient funding to sustain the business
and see us through this challenging period. In the first half of
2020-21, our shareholder injected US$ 2 billion into Emirates by
way of an equity investment and they will support us on our
recovery path." Emirates Group, reported a solid cash position of
AED 20.7bn (US$ 5.6bn) as of 30 September 2020.
Overall capacity during the first six months of the year
declined by 67% to 9.8 billion Available Tonne Kilometres (ATK) due
to a substantially reduced flight programme over the past months,
including the suspension of passenger flights at Dubai
international airport for 8 weeks. Capacity measured in Available
Seat Kilometres (ASK), shrunk by 91%, whilst passenger traffic
carried measured in Revenue Passenger Kilometres (RPK) was down by
96% with average Passenger Seat Factor falling to 38.6%, compared
with last year's pre-pandemic figure of 81.1%.
Airline Operations
Emirates carried 1.5 million passengers between 1 April and 30
September 2020, down 95% from the same period last year. The volume
of cargo uplifted at 0.8 million tonnes has decreased by 35% while
yield has more than doubled by 106%. This reflects the
extraordinary market situation for air freight during the global
COVID-19 crisis, where drastically reduced passenger flights led to
limited available capacity while airfreight demand rose
strongly.
Emirates was able to uplift 65% of its cargo volumes compared to
the same period last year, which shows its cargo division's agility
in adapting its operations to provide air freight services in this
new environment. In a very short time, Emirates Skycargo completed
the partial retrofit of 10 Boeing 777-300ER passenger aircraft to
transport freight on the main deck, introduced new operation
protocols to enable the safe uplift of cargo in passenger cabins,
rapidly restarted and scaled up its global cargo network, and put
in place comprehensive bio-safety protocols for employees.
Currently around 500 tonnes of food items are transported every day
in the cargo hold of Emirates aircraft across the world.
Emirates has done well in analysing passenger demand and
monitoring countries' lockdown situation in order to target new
channels for growth. On 20 October 2020, Emirates and Airlink
announced an interline agreement, widening Emirates' reach into
Southern Africa as countries begin opening their borders for
travellers. Emirates' agreement with Airlink will provide its
customers enhanced connectivity via its gateways Johannesburg and
Cape Town to more than 25 domestic destinations in South Africa and
more than 20 regional destinations in Southern Africa. The unique
connections enabled by this new partnership provide customers
onward travel options not offered by other airlines.
The table below details the current fleet status for the week
starting 6 October 2020 and ending 12 October 2020 :
Aircraft Grounded Active
Type
A380 104 12
B777 9 142
Total 113 154
% 42% 58%
Source: Flightradar24
The Emirates Group. (c) 2020 All Rights Reserved.
THAI AIRWAYS INTERNATIONAL
Q3'2020 Financial Results
Total revenues of Thai and its subsidiaries were THB 3,727m
(c.US$ 118.9m), lower than the same quarter of last year by THB
41,289m (c. US$ 1.32bn) or 91.7%. The main reason was because both
revenue from passenger and cargo operations decreased by THB
37,654m (c. US$ 1.20bn) or 95.1%. Total expenses were of THB
19,375m (c. US$ 618.3m), THB 28,483m (c. US$ 908.89m) or 59.5%
lower than last year, mainly due to operating expenses that varied
with traffic production, traffic demand and number of passengers
decreased in line with production and traffic demand.
Moreover, fixed expense was still high while as revenue
decreased greater than its expenses, thus resulting in operating
loss of THB 15,648m (c. US$ 499.4m), higher loss of THB 12,806m (c.
US$ 408.6m) or 450.6% from the same quarter last year. Thai
reported a net loss of THB 21,531m (US$ 687.1m), more loss of THB
16,851m (US$ 537.7m) or 360.1% from the same quarter the previous
year. This amount takes Thai's total loss for the first 9 months of
the 2020/21 financial year to THB 49,560m (c. US$ 1.58bn).
As of September 30, 2020, total assets tallied THB 298,952m (c.
US$ 9.54bn), increased by THB 44,144m (c. US$ 1.41bn) or 17.3% from
as at December 31, 2019. Total liabilities as of September 30, 2020
were THB 338,897m (c. US$ 10.81bn), increased by THB 95,855m or (c.
US$ 3.06bn) or 39.4% from as of December 31, 2019. The Group had
loss from operations since year 2013 resulting in the Group having
a capital deficiency and lack of financial liquidity.
Airline Operations
In April 2020, the Thai government imposed strict travel
restrictions for those wishing to enter and leave the country. An
article published by FlightGlobal indicates that since restrictions
were set, the number of international flights plummeted as April
only saw 2,711 flights from Bangkok's Suvarnabhumi airport compared
to January's 26,000 international flights. For the quarter ended 30
June, tourist arrivals into Thailand fell to an unprecedented
zero.
In the third quarter of 2020, Thai recounted passenger
production (ASK(1) ) decreased by 95.0% while passenger traffic
(RPK(2) ) decreased by 97.8%. Average cabin factor was 34.9% lower
than last year which averaged 80.0%. Passengers carried were 0.49
million people, a decrease of 91.9% from the previous year. For
cargo transportation, freight production (ADTK(3) ) was 96.2% lower
than the previous year, while freight traffic (RFTK(4) ) was 93.6%
lower than the previous year. Average Freight load Factor was 91.2%
higher than the previous year at 52.2%.
Despite the lack of tourism, Thai have confirmed that they would
be operating "semi-commercial" international repatriation flights
in November to seven destinations (including London, Tokyo and
Sydney). The flights are being organized in conjunction with
Thailand's Ministry of Foreign Affairs and will be used to
repatriate Thai citizens and deliver cargo. The flights will
operate until the beginning of December and are open to passengers
with "travel, education and business needs", including special
tourist visa holders.
Domestic services carried out by its subsidiary "Thai Smile",
are improving since the carrier resumed operations on 1 June 2020.
Data from Flightradar24 indicates that Thai Smile was operating 14
out of 20 A320 aircraft between 20 - 27 of November. During the
same period of time, Thai Airways fleet comprised of the
following:
Aircraft Grounded Active
Type
A330 13 2
A350 9 3
A380 6 0
B747 8 0
B777 24 3
B787 8 0
Total 68 8
% 89% 11%
Source: Flightradar24
Thai Airways International Public Company Limited. (c) 2020 All
Rights Reserved
1. Available Seat Kilometres
2. Revenue Passenger Kilometres
3. Available Dead Load Ton-Kilometres
4. Revenue Freight-Ton Kilometres
DIRECTORS
As at 30 September 2020, the Company had four directors (the
"Directors"), all of whom are independent and non-executive. All
Directors held office throughout the period under review.
Robin Hallam (Chairman) (Independent non-executive)
Until 31 December 2015, Robin Hallam was a partner and co-head
of Asset Finance at international law firm Hogan Lovells LLP, where
he was a partner since 1995 specialising in aircraft finance,
particularly leasing, export credit and structured financing.
Between January and December 2016, Robin was a consultant at Hogan
Lovells LLP. He has represented financial institutions, operating
lessors, investors, airlines and export credit agencies. Robin
holds a degree in law from Trinity College, Cambridge, is a member
of the International Society of Transport Aircraft Trading
("ISTAT") and was ranked Band 1 for Asset Finance in Chambers UK
2015.
David Gelber (Senior independent non-executive)
David Gelber began his career with Citibank in London in 1974.
Over the course of the next twenty years he held a variety of
trading roles in foreign exchange, fixed income and derivatives at
Citibank, Chemical Bank and HSBC where he was Chief Operating
Officer of HSBC Global Markets. In 1994 he joined ICAP, an
inter-dealer broker, as COO and oversaw two mergers and a number of
acquisitions. He is currently the non-executive Chairman of Walker
Crips PLC, a stock broker and wealth manager; and a non-executive
director of IPGL, a holding company with investments in numerous
companies on several of which he serves as a director (DDCAP an
arranger of Sharia Compliant transactions, Tellimer Ltd an online
research platform for frontier markets, Veridium ID a biometric
identification provider, Opportunity Network a B2B CEO platform and
Singapore Life Ltd, a newly formed digital insurance company).
David holds a BSc in Statistics and Law from the University of
Jerusalem and an MSc in Computer Science from the University of
London.
John Le Prevost (Independent non-executive)
John Le Prevost has spent over forty years working in offshore
fund, trust and investment businesses during which time he has been
a managing director of subsidiaries in Guernsey for County NatWest
Investment Management, The Royal Bank of Canada and for Republic
National Bank of New York. John was then CEO of Anson Group Limited
from 1998 until he retired in 2019. He has during his career read
for a law degree and an MBA and is a Full Member of the Society of
Trust and Estate Practitioners. He is a trustee of the Guernsey
Sailing Trust and is resident in Guernsey.
Laurence Barron (Independent non-executive)
Having begun his career as a commercial lawyer in Paris and then
in Tokyo, where he first became involved in aircraft financing
transactions, Laurence joined Airbus in 1982 as an in-house lawyer
specialising in aircraft finance. He subsequently moved to the
business side when, in 1984, he was appointed Sales Finance
Director North America, becoming Head of Sales Finance in 1985, and
then, in 1987, Vice President of Customer Finance. In 1994, he was
asked to set up the Asset Management Organisation within Airbus and
that year became Vice President and Head of Asset Management.
Airbus Asset Management has full responsibility for all used
aircraft transactions at Airbus and acts as an in-house leasing
company for the used Airbus aircraft owned or controlled by the
Airbus group of companies. In 2001 he was promoted to Senior Vice
President of Airbus before assuming the role of President of Airbus
China in 2004, with responsibility for Airbus' overall activities
in the People's Republic of China. In January 2013, Laurence was
appointed Chairman of EADS China, now rebranded Airbus China.
Laurence retired from salaried Airbus employment at the end of
April 2016 and was non-executive Chairman of Airbus China until the
end of 2017. He holds an LLB from Bristol University Law
Faculty.
interim management report
A description of important events that have occurred during the
period under review, their impact on the financial statements and a
description of the principal risks and uncertainties facing the
Group, together with an indication of important events that have
occurred since the end of the period under review and are likely to
affect the Group's future development are included in the Company
Overview, the Chairman's Statement, the Asset Manager's Report and
the Notes to the consolidated financial statements contained below
and are incorporated herein by reference.
There were no other events or changes in the related parties and
transactions with those parties during the period under review
which had or could have had a material impact on the financial
position and performance of the Group, other than those disclosed
in this consolidated half-yearly financial report.
Principal Risks and Uncertainties
The principal risks and uncertainties faced by the Group are
unchanged from those disclosed in the Group's annual financial
report for the year ended 31 March 2020.
Going Concern
The Group's principal activities are set out within the Company
Overview above. The financial position of the Group is set out
below. In addition, note 17 to the consolidated financial
statements includes the Group's objectives, policies and processes
for managing its capital, its financial risk management objectives
and its exposures to credit risk and liquidity risk.
The Directors in consultation with the Asset Manager are
monitoring the effects of COVID-19 on the Group's financial
position. The Group's future performance can potentially be further
impacted should COVID-19 continue to have a pervasive and prolonged
impact on the aviation industry and on the business of its lessees
and also affect the residual values of the aircraft it owns. This
may lead to the inability of lessees to pay rents as they fall due.
These factors, together with wider economic uncertainty and
disruption, are likely to have an adverse impact on the future
value of the aircraft assets owned by the Group, as well as on the
sale, re-lease, refinancing or other disposition of the relevant
aircraft.
Any failure of a lessee to maintain its scheduled payments under
its existing leases means the payments received, if any, may not be
sufficient to meet the loan interest and regular capital repayments
of debt scheduled during the life of each loan and may not provide
surplus income to pay for the Group's expenses.
However, on the basis of (i) the Group's current liquid assets
and (ii) cash-flow projections and contingency reserves under
various scenarios (including default by Thai), the Directors
nevertheless believe that the going concern basis of accounting is
appropriate but there are material uncertainties.
Responsibility Statement
The D irectors confirm that to the best of their knowledge:
(a) the condensed set of consolidated financial statements,
prepared in accordance with International Accounting Standard 34
Interim Financial Reporting as adopted by the European Union, give
a true and fair view of the assets, liabilities, financial position
and profit or loss of the Group; and
(b) this interim management report (including the information
incorporated by reference) includes a fair review of the
development and performance of the business and the position of the
Group, together with a description of the principal risks and
uncertainties that the Group faces.
Signed on behalf of the Board of directors of the Company on 7
December 2020.
John Le Prevost
Director
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the period from 1 April 2020 to 30 September 2020
1 Apr 2020 to 1 Apr 2019 to
30 Sep 2020 30 Sep 2019
Notes GBP GBP
INCOME
US Dollar based rent income 4 86,639,389 109,536,552
British Pound based rent
income 4 17,312,742 22,758,325
Bank interest received 268,220 58,680
104,220,351 132,353,557
EXPENSES
Operating expenses 5 (4,734,513) (3,502,169)
Provision for rent debtor (22,969,273) -
impairment
Depreciation of Aircraft 9 (61,333,394) (73,573,585)
(89,037,180) (77,075,754)
Net profit for the period before
finance costs
and foreign exchange gains 15,183,171 55,277,803
FINANCE COSTS
Finance costs 10 (24,948,329) (49,405,288)
Foreign exchange gains 18b 463,367 22,329
(Loss)/profit before tax (9,301,791) 5,894,844
Income tax expense 23 (28,444) (30,899)
(Loss)/profit for the period
after tax (9,330,235) 5,863,945
-------------- --------------
OTHER COMPREHENSIVE (LOSS)/
INCOME
Translation adjustment on
foreign operations 2d (19,251,659) 40,259,905
Total Comprehensive (loss)/income
for the period (28,581,894) 46,123,850
============== ==============
Pence Pence
(Loss)/earnings per Share
for the period - Basic and
Diluted 8 (2.20) 0.91
-------------- --------------
In arriving at the results for the financial period, all amounts
above relate to continuing operations.
The Notes form an integral part of these consolidated financial
statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 September 2020
Notes 30 Sep 2020 31 Mar 2020
GBP GBP
NON-CURRENT ASSETS
Aircraft 9 1,588,043,255 1,714,508,850
1,588,043,255 1,714,508,850
CURRENT ASSETS
Accrued income 24 14,046,771 14,446,150
Short term investments 13 11,659,696 7,737,776
Receivables 12 8,179,065 7,478,539
Cash and cash equivalents 20 244,891,877 247,911,207
-------------- --------------
278,777,409 277,573,672
TOTAL ASSETS 1,866,820,664 1,992,082,522
============== ==============
CURRENT LIABILITIES
Payables 14 98,721,638 182,873
Deferred income 24 8,833,238 9,470,038
Borrowings 15 101,545,073 103,593,531
-------------- --------------
209,099,949 113,246,442
NON-CURRENT LIABILITIES
Financial liabilities at fair
value through profit and loss 17 14,279,764 12,783,866
Security deposits 21 13,466,651 14,150,289
Maintenance reserves 22 58,603,859 59,444,834
Borrowings 15 1,039,022,783 1,129,651,234
Deferred income 24 27,268,272 30,666,285
-------------- --------------
1,152,641,329 1,246,696,508
TOTAL LIABILITIES 1,361,741,278 1,359,942,950
============== ==============
TOTAL NET ASSETS 505,079,386 632,139,572
-------------- --------------
EQUITY
Share capital 16 549,160,405 647,638,697
Foreign currency translation
reserve 40,086,475 59,338,134
Retained deficit (84,167,494) (74,837,259)
-------------- --------------
505,079,386 632,139,572
Pence Pence
-------------- --------------
Net Asset Value Per Share based
on 428,166,757 (31 March 2020:
642,250,000) shares in issue 117.96 98.43
-------------- --------------
The financial statements were approved by the Board and
authorised for issue on 7 December 2020.
The Notes form an integral part of these consolidated financial
statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the period from 1 April 2020 to 30 September 2020
1 Apr 2020 1 Apr 2019
to to
Notes 30 Sep 2020 30 Sep 2019
GBP GBP
OPERATING ACTIVITIES
(Loss)/profit for the period after
tax (9,330,235) 5,863,945
Decrease in accrued and deferred income (26,380,116) (8,953,009)
Interest received (268,220) (58,680)
Depreciation of Aircraft 9 61,333,394 73,573,585
Provision for rent debtor impairment 22,969,274 -
Taxation expense 23 28,444 30,899
Loan and fair value adjustments on
financial assets 10 24,099,830 48,356,236
Increase in payables 98,513,668 6,606
Maintenance reserves received 2,987,102 12,601,804
(Increase) /decrease in prepayments (14,600) 1,385
Foreign exchange movement (463,367) (22,329)
Amortisation of debt arrangement costs 10 848,499 1,049,052
Taxation paid (3,347) -
NET CASH FROM OPERATING ACTIVITIES 174,320,326 132,449,494
-------------- --------------
INVESTING ACTIVITIES
Interest received 268,220 58,680
Investment in short term deposits 13 (3,921,920) -
NET CASH (USED IN) / RECEIVED FROM
INVESTING ACTIVITIES (3,653,700) 58,680
-------------- --------------
FINANCING ACTIVITIES
Dividends paid 7 - (26,492,812)
Repayments of capital on senior loans (45,233,511) (55,392,920)
Repayments of capital on junior loans (33,219,593) -
Payments of interest on senior loans (17,029,357) (27,772,899)
Payments of interest on junior loans (5,595,673) (6,241,552)
Security trustee and agency fees 10 (103,583) (143,642)
Share redemption proceeds (98,478,292) -
NET CASH USED IN FINANCING ACTIVITIES (199,660,009) (116,043,825)
-------------- --------------
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 247,911,207 91,070,150
(Decrease)/increase in cash and cash
equivalents (28,993,383) 16,464,349
Exchange rate adjustment 25,974,053 3,280,400
CASH AND CASH EQUIVALENTS AT OF
PERIOD 20 244,891,877 110,814,899
-------------- --------------
The Notes form an integral part of these consolidated financial
statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period from 1 April 2020 to 30 September 2020
Notes Share Capital Retained Foreign Total
Deficit Currency
Translation
Reserve
GBP GBP GBP GBP
Balance as at 1
April 2020 647,638,697 (74,837,259) 59,338,134 632,139,572
(Loss)/profit for
the year - (9,330,235) - (9,330,235)
Total Comprehensive
(loss) for the
period - - (19,251,659) (19,251,659)
Share redemption (98,478,292) - - (98,478,292)
-------------- ------------- ------------- -------------
Balance as at 30
September 2020 549,160,405 (84,167,494) 40,086,475 505,079,386
-------------- ------------- ------------- -------------
Notes Share Capital Retained Foreign Total
Earnings Currency
Translation
Reserve
GBP GBP GBP GBP
Balance as at 1
April 2019 647,638,697 11,636,798 43,302,960 704,578,455
Profit for the
year - 5,863,945 - 5,863,945
Total Comprehensive
income for the
period - - 40,259,905 40,259,905
Dividends paid 7 - (26,492,812) - (26,492,812)
-------------- ------------- ------------- -------------
Balance as at 30
September 2019 647,638,697 (8,992,069) 85,562,865 724,209,493
-------------- ------------- ------------- -------------
The Notes form an integral part of these consolidated financial
statements.
Notes to the Consolidated Financial Statements
For the period ended 30 September 2020
1. GENERAL INFORMATION
The consolidated financial information incorporates the results
of Amedeo Air Four Plus Limited (the "Company"), AA4P Alpha
Limited, AA4P Beta Limited, AA4P Gamma Limited, AA4P Delta Limited,
AA4P Epsilon Limited, AA4P Zeta Limited, AA4P Eta Limited, AA4P
Theta Limited, AA4P Lambda Limited, AA4P Mu Limited, AA4P Nu
Limited, AA4P Leasing Ireland Limited, AA4P Leasing Ireland 2
Limited and AA4P Xi Limited (each a "Subsidiary" and together the
"Subsidiaries") (together the Company and the Subsidiaries are
known as the "Group").
The Company was incorporated in Guernsey on 16 January 2015 with
registered number 59675. Its share capital consists of one class of
redeemable ordinary shares ("Shares"). The Shares are admitted to
trading on the SFS of the London Stock Exchange's Main Market.
The Company's investment objective is to obtain income returns
and a capital return for its Shareholders by acquiring, leasing and
then selling aircraft.
Since the completion of its initial public offering on 13 May
2015, the Company has acquired eight Airbus A380, two Boeing
777-300ER and four Airbus A350-900 aircraft. Eight of the aircraft
are leased to Emirates and four aircraft are leased to Thai
Airways. During the 31 March 2020 financial year, two Airbus A380
aircraft were sold to Etihad after which the related subsidiaries
were liquidated. All aircraft are leased for a period of 12 years
from each respective delivery date. In order to complete the
purchase of these aircraft, subsidiaries of the Company entered
into debt financing arrangements which together with the equity
proceeds were used to finance the acquisition of the aircraft.
Rental income received is used to pay loan interest and regular
capital repayments of debt. US Dollar lease rentals and loan
repayments, with the exception of the four Thai aircraft which
incorporate floating rate lease rentals, are furthermore fixed at
the outset of the Group's acquisition of an aircraft and are very
similar in amount and timing save for the repayment of bullet and
balloon repayments of principal due on the final maturity of a loan
to be paid out.
2. ACCOUNTING POLICIES
The significant accounting policies adopted by the Group are as
follows:
(a) Basis of preparation
The consolidated financial statements have been prepared in
conformity with the International Accounting Standard 34 Interim
Financial Reporting as adopted by the European Union ("EU"), and
applicable Guernsey law. The financial statements have been
prepared on a historical cost basis under International Financial
Reporting Standards.
This report is to be read in conjunction with the annual report
for the year ended 31 March 2020 which is prepared in accordance
with International Financial Reporting Standards as adopted by the
EU and any public announcements made by the Company during the
interim reporting period. The report does not include all of the
information required for a complete set of financial statements
prepared in accordance with IFRS Standards. However, selected
accounting policies and explanatory notes are included to explain
events and transactions that are significant to an understanding of
the changes in the Group's financial position and performance since
the last annual financial statements.
The comparative period for the Consolidated Statement of
Comprehensive Income, Consolidated Statement of Cash Flows,
Consolidated Statement of Changes in Equity and the related notes
was from 1 April 2019 to 30 September 2019. The accounting policies
adopted are consistent with those of the previous financial year,
except for the adoption of new and amended standards as set out
overleaf:
Changes in accounting policies and disclosure
New and amended IFRS Standards that are effective for the
current period
The following Standard and Interpretation issued by the
International Accounting Standards Board (the "IASB") and
International Financial Reporting Standards Interpretations
Committee ("IFRIC") has been adopted in the current period. The
adoption has not had any impact on the amounts reported in these
financial statements and is not expected to have any impact on
future financial periods:
IAS 1'Presentation of financial statements' and IAS 8
'Accounting policies, changes in accounting estimates and error' on
definition of material - These amendments to IAS 1, IAS 8 and
consequential amendments to other IFRSs: use a consistent
definition of materiality throughout IFRSs and the Conceptual
Framework for Financial Reporting; clarify the explanation of the
definition of material; and incorporate some of the guidance in IAS
1 about immateriality information. The effective date is for annual
periods beginning on or after 1 January 2020. The standard is not
expected to have a material impact on the financial statements or
performance of the Fund and is endorsed by the EU.
New and Revised Standards in issue but not yet effective
IFRS 16 'Leases' - Covid-19 related rent concessions. As a
result of the coronavirus (COVID-19) pandemic, rent concessions
have been granted to lessees. Such concessions might take a variety
of forms, including payment holidays and deferral of lease
payments. Lessees can elect to account for such rent concessions in
the same way as they would if they were not lease modifications. In
many cases, this will result in accounting for the concession as
variable lease payments in the period(s) in which the event or
condition that triggers the reduced payment occurs. The standard is
not expected to have a material impact on the financial statements
or performance of the Group as it is applicable to lessees. The
effective date is for annual periods beginning on or after June
2020. The standard is not expected to have a material impact on the
financial statements or performance of the Group and is not
endorsed by the EU.
IAS 1 'Presentation of financial statements' Classification of
Liabilities as Current or Non-current. The International Accounting
Standards Board issued amendments to paragraphs 69 to 76 of IAS 1
to specify the requirements for classifying liabilities as current
or non-current. The effective date is for annual periods beginning
on or after 1 January 2023. The standard is not expected to have a
material impact on the financial statements or performance of the
Group and is not endorsed by the EU.
(b) Basis of consolidation
The consolidated financial information incorporates the results
of the Company and the Subsidiaries. The Company owns 100% of all
the shares in the Subsidiaries which grants it exposure to variable
returns from the entities and the power to affect those returns,
granting it control in accordance with IFRS 10.
Intra-group balances and transactions, and any unrealised income
and expenses arising from intra-group transactions, are eliminated
in preparing the consolidated financial information.
(c) Taxation
The Company and the Guernsey Subsidiaries have been assessed for
tax at the Guernsey standard rate of 0%. Since AA4P Leasing Ireland
Limited and AA4P Leasing Ireland 2 Limited are Irish tax resident
trading companies, they will not be subject to Guernsey tax, but
their net lease rental income earned (after tax deductible
expenditure) will be taxable as trading income at 12.5% under Irish
tax regulations. Please refer to Note 23 for more information.
(d) Foreign currency translation
The currency of the primary economic environment in which the
Group operates (the functional currency) is Great British Pounds
("GBP") which is also the presentation currency. The Subsidiaries
of the Company all have the same functional currency being US
Dollar ("USD").
Transactions denominated in foreign currencies are translated
into GBP at the rate of exchange ruling at the date of the
transaction.
Monetary assets and liabilities denominated in foreign
currencies at the reporting date are translated into the functional
currency at the foreign exchange rate ruling at that date. Foreign
exchange differences arising on translation are recognised in the
Consolidated Statement of Comprehensive Income.
On consolidation the financial statements of foreign
subsidiaries whose functional currency is not GBP are translated
into GBP as follows: statement of financial position items are
translated into GBP at the period end exchange rate; statement of
income items are translated into GBP at the exchange rates
applicable at the transaction dates or at the average exchange
rates at each respective quarter end, as long as this is not
rendered inappropriate as a basis for translation by major
fluctuations in the exchange rate during the period; unrealised
gains and losses arising from the translation of the financial
statements of foreign subsidiaries are recorded under "Translation
adjustment on foreign operations" in other comprehensive income to
be recycled to income. The cumulative gains and losses arising from
the translation of the financial statements of foreign subsidiaries
are reclassified to profit and loss on disposal or liquidation of
foreign subsidiaries.
(e) Cash and cash equivalents
Cash at bank and short term deposits which are held to maturity
are carried at cost. Cash and cash equivalents are defined as call
deposits, short term deposits with a term of no more than three
months from the start of the deposit and highly liquid investments
readily convertible to known amounts of cash and subject to
insignificant risk of changes in value.
(f) Segmental reporting
The Directors have overall responsibility for the Group's
activities, including investment activity and are therefore
considered the chief operating decision maker.
The Directors are of the opinion that the Group is engaged in a
single segment of business, being acquiring, leasing and selling
aircraft (together the "Assets" and each an "Asset"). For more
information on segmental information please refer to note 26.
(g) Going concern
The Directors have prepared these financial statements for the
period ended 30 September 2020 on the going concern basis. However,
the Directors have identified the matters referred to below which
may indicate the existence of one or more material uncertainties
that may cast doubt on the Group's ability to continue as a going
concern and that the Group may, as a consequence, be unable to
realise its assets and discharge its liabilities in the normal
course of business.
Following the going concern assessment included in the annual
report for the year ended 31 March 2020, the Directors believe that
international travel has not rebounded in the way predicted at the
start of the COVID-19 crisis. Airlines have used up much of the
liquidity provided to them by governments and shareholders, but the
expected restoration in air travel has been blighted by poor
COVID-19 testing facilities, lack of coordinated action by
governments, increased infection rates and the expected ending of
many of the most generous furlough schemes.
In the case of materialisation of the risk related to the lessee
counterparty creditworthiness, the fixed rents receivable under the
leases may not be sufficient to meet the loan interest and regular
capital repayments of debt scheduled during the life of each loan
and may not provide surplus income to pay for the Group's
expenses.
As announced on 6 April 2020 the Board decided to temporarily
suspend the declaration of dividends until the future prospects of
the Group's two lessees becomes more assured. Such a decision was
made after the Board had carefully considered and assessed the
above mentioned factors against the background of the Company's
investment objectives and the maintenance of the long-term
financial stability of the Company for the benefit of all
shareholders as a class and the Group's creditors.
However, pursuant to the announcement released by the Company on
23 September 2020, the directors of the Company declared an interim
dividend of 1.15 pence per Redeemable Ordinary Share in respect of
the financial year ending 31 March 2021.
The Board will continue to monitor actively the financial impact
on the Company and its Group resultant from the evolving position
with its aircraft lessees and lenders whilst bearing in mind its
fiduciary obligations and the requirements of Guernsey law which
determine the ability of the Company to make dividends and other
distributions.
The Group's aircraft with carrying values of GBP1,588,043,255
(31 March 2020: GBP1,714,508,850) are pledged as security for the
Group's borrowings (see note 15).
Thai Airways
Thai Airways has deferred restarting operations, this time until
second quarter 2021 and the Group's A350-900 aircraft consequently
remain grounded. The aircraft have been recently inspected and at
the time of such inspection were being maintained in "flight ready"
status as opposed to long term storage status.
As noted in the annual report for the year ended 31 March 2020,
on 27 May 2020 the Central Bankruptcy Court of Thailand issued an
order to accept the rehabilitation petition for consideration and
set the date of 17 August for the first hearing on the
rehabilitation petition. Effectively, from 27 May an automatic stay
comes into effect which restricts Thai's right to pay and incur
debts and a moratorium affecting creditors' rights comes into
force. Thai Airways has not paid any lease payments to the
Company's subsidiaries since 22 May.
Following hearings on 17, 20 and 25 August that included the
presentation of objections and evidence
from a small number of creditors, the Court approved Thai's
request on 14 September 2020. From such time, the Court approved a
seven-member "Planning Committee", who will now proceed to
strategize the carrier's rehabilitation and seek to restructure
Thai's debt and lease obligations amongst other matters with a view
to obtaining majority creditor and Court approval.
T he Directors, together with the support of the Asset Manager,
are in discussions with Thai Airways and also the secured lenders
of the four aircraft on lease to Thai Airways following the non-
receipt of
rentals from Thai and the initial request for concessions. The
Asset Manager is also commencing dialogue with the Planners and has
maintained contact with the secured lenders of the four aircraft on
lease to Thai.
The Asset Manager awaits further news of the Planners'
intentions, which might not become clear until the end of 2020. In
the meantime, discussions have commenced around the potential for
Thai to start operation of certain aircraft, which could possibly
include the Group's aircraft, on a power by the hour (PBH) basis in
order for the Group to earn some income as opposed to the aircraft
remaining in temporary storage. Separately, the Thai government is
involved in discussion with eight other Thai airlines to provide
potential COVID-19 related support through a US$770m package. Thai
Airways have been excluded from this discussion at present due to
the rehabilitation process, but separate discussions may occur and
further details are awaited regarding this matter.
Going Concern Assessment
While the Group has made a loss in the current period, it is in
a current net asset position and continues to generate strong
positive operating cash flows. The Group's cash levels rose
significantly due to the sale of two A380-800 aircraft on 25
February 2020 in the prior financial year. The sales included the
full repayment of the financing arrangements on both aircraft,
including applicable swap breakage and facility prepayment
costs.
The Board decided to return to Shareholders c.GBP98.5 million on
25 September 2020 by way of a compulsory redemption of one-third of
the ordinary shares in the capital of the Company (being the
redemption of approximately 214,083,243 Shares) at a redemption
price of 46 pence per each redeemed share.
During the current period, due to the non-payment of lease
rentals by Thai Airways, a provision has been raised for the
impairment of amounts due in full (see the Consolidated Statement
of Comprehensive Income) as being considered prudent in the
circumstances.
The Asset Manager has also arranged with Thai lenders that debt
service can be limited to interest only on a three monthly basis
and are seeking to extend that arrangement. The Board therefore
anticipates that the Group may have to fund interest for a possibly
longer period from its existing liquidity in a worst case scenario
whilst the rehabilitation process is completed and assuming the
lenders are willing to grant principal deferrals for that period in
full. Due to the current economic climate and current negotiations
with lessees and lenders in process, the Board has decided to
create a contingency reserve of GBP30m to cover 18 months interest
and funds to allow the Group to repossess, store, remarket and
return to service its aircraft in 2022/23; if such became necessary
as a last resort.
The Board is also of the opinion that the Planner's initial
timeline of having a plan agreed with all creditors within Q4 this
year, and implemented and working within Q1 next year, as being
optimistic. The Board is therefore working on the basis that the
timeline should be realistically shifted at least two quarters
further out and that the Group will receive little or no income
before the end of Q2 next year from the Thai leases.
Whilst progress has been made, the Directors are uncertain as to
the final outcome of these matters.
However, on the basis of (i) the Group's current liquid assets
and (ii) cash-flow projections and contingency reserves as
described above under various scenarios (including default by
Thai), the Directors nevertheless believe that the going concern
basis of accounting is appropriate but there are material
uncertainties.
(h) Leasing and rental income
Rental income and advance lease payments from operating leases
are recognised on a straight-line basis over the term of the
relevant lease. Initial direct costs incurred in negotiating and
arranging an operating lease are added to the carrying amount of
the leased Asset and amortised on a straight-line basis over the
lease term. The four A350-900 aircraft have variable lease rentals,
the variable portion of which is treated as contingent rent.
Contingent rent is recognised in the period in which it is
earned.
The deferred income liability represents the difference between
actual payments received in respect of the lease income (including
some received in full upfront) and the amount to be accounted for
in the accounting records on a straight line basis over the lease
terms. This liability will reduce over time as the leases continue
and approach the end of the lease terms. In addition to the timing
of receipt of the various rental income streams, the liability is
impacted by the USD/GBP exchange rate at the period end and any new
leases entered into from new aircraft acquisitions during the
period.
(i) Maintenance reserve and security deposits liabilities
In many aircraft operating lease contracts, the lessee has the
obligation to make periodic payments which are calculated with
reference to utilisation of airframes, engines and other major
life-limited components during the lease. In most lease contracts,
upon presentation by the lessee of the invoices evidencing the
completion of qualifying work on the aircraft, the Group reimburses
the lessee for the work, up to a maximum of the advances received
with respect to such work.
The Group records such amounts as maintenance advances.
Maintenance advances not expected to be utilised within one year
are classified as non-current liabilities. Amounts not refunded
during the lease are recorded as lease revenue at lease
termination. Further details are given in note 22.
Security deposits represent amounts paid by the lessee as
security in accordance with the lease agreements. The deposits are
repayable to the lessees on the expiration of the lease agreements
subject to satisfactory compliance of the lease agreements by the
lessees.
(j) Property, plant and equipment - Aircraft
In line with IAS 16 Property Plant and Equipment, each Asset is
initially recorded at cost, being the fair value of the
consideration paid. The cost of the Asset is made up of the
purchase price of the Assets plus any costs directly attributable
to bringing it into working condition for its intended use. Costs
incurred by the lessee in maintaining, repairing or enhancing the
aircraft are not recognised as they do not form part of the costs
to the Group. Accumulated depreciation and any recognised
impairment losses are deducted from cost to calculate the carrying
amount of the Asset.
(a) Depreciation
Depreciation is recognised so as to write off the cost of each
Asset less the estimated residual value over the lease term of the
Asset of twelve years, using the straight line method. The
depreciation method is consistent with the depreciation method used
at 31 March 2020. The Group will again be carrying out a full and
thorough appraisal of residual values come the next March financial
year end.
(b) Impairment
At each audited reporting date, the Group reviews the carrying
amounts of its Assets to determine whether there is any indication
that those Assets have suffered an impairment loss. If any such
indication exists, the recoverable amount of the Asset is estimated
to determine the extent of the impairment loss (if any). Further
details are given in note 3.
Recoverable amount is the higher of fair value less costs to
sell and the value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the Asset for
which the estimates of future cash flows have not been
adjusted.
If the recoverable amount of an Asset is estimated to be less
than its carrying amount, the carrying amount of the Asset is
reduced to its recoverable amount. An impairment loss is recognised
immediately in profit or loss. Where an impairment loss
subsequently reverses, the carrying amount of the Asset is
increased to the revised estimate of its recoverable amount, but so
that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been
recognised for the Asset in prior years. A reversal of an
impairment loss is recognised immediately in profit or loss.
(k) Financial assets and financial liabilities at fair value
through profit or loss
(a) Measurement
At initial recognition, the Group measures a financial asset at
its fair value plus, in the case of a financial asset not at FVTPL,
transaction costs that are directly attributable to the acquisition
of the financial asset. Transaction costs of financial assets
carried at FVTPL are expensed in profit or loss.
Financial assets with embedded derivatives are considered in
their entirety when determining whether their cash flows are solely
payment of principal and interest.
Financial assets
Subsequent measurement of financial assets depends on the
Group's business model for managing the asset and the cash flow
characteristics of the asset. The Group classifies its financial
assets into the following measurement category:
Amortised cost: Assets that are held for collection of
contractual cash flows where those cash flows represent solely
payments of principal and interest are measured at amortised cost.
Interest income from these financial assets is included in finance
income using the effective interest rate method. Any gain or loss
arising on derecognition is recognised directly in profit or loss
and presented in other gains / (losses), together with foreign
exchange gains and losses. Provision for impairment losses are
included in the statement of profit or loss.
Financial assets currently measured at amortised cost are cash
and cash equivalents, receivables and short term investments. These
instruments meet the solely principal and interest criterion and
are held in a held-to-collect business model. Accordingly, they
will continue to be measured at amortised cost under IFRS 9.
Derivative instruments
Changes in the fair value of financial assets at FVPL are
recognised in the statement of profit or loss as applicable.
Financial assets and financial liabilities at fair value through
profit or loss are initially recognised at fair value. Transaction
costs are expensed in profit or loss in the Consolidated Statement
of Comprehensive Income. Subsequent to initial recognition, all
financial assets and financial liabilities at fair value through
profit or loss are measured at fair value. Gains and losses arising
from changes in the fair value of the 'financial assets or
financial liabilities at fair value through profit or loss'
category are presented in the Consolidated Statement of
Comprehensive Income in profit or loss in the period in which they
arise.
(b) Impairment
The Group assesses on a forward looking basis the expected
credit losses associated with its receivables or accrued income
carried at amortised cost. The impairment methodology applied
depends on whether there has been a significant increase in credit
risk.
For trade and other receivables, the Group applies the
simplified approach permitted by IFRS 9, which requires expected
lifetime losses to be recognised from initial recognition of the
receivables. Refer to note 12 for provision for impairment with
respect to trade and other receivables.
(l) Non-derivative financial liabilities
Financial liabilities consist of payables, security deposits and
borrowings. The classification of financial liabilities at initial
recognition will be at amortised cost to the extent it is not
classified at FVTPL. All financial liabilities are initially
measured at fair value, net of transaction costs. All financial
liabilities are recorded on the date on which the Group becomes
party to the contractual requirements of the financial
liability.
Amortised cost: Interest expenses from financial liabilities is
included in finance costs using the effective interest rate method.
Any gain or loss arising on derecognition is recognised directly in
profit or loss and presented in other gains / (losses), together
with foreign exchange gains and losses.
Financial liabilities are subsequently measured at amortised
cost using the effective interest method, with interest expense
recognised on an effective yield basis. The effective interest
method is a method of calculating the amortised cost of the
financial liability and of allocating interest expense over the
relevant period. The effective interest rate is the rate that
exactly discounts estimated future cash payments through the
expected life of the financial liability, to the net carrying
amount on initial recognition. Associated costs are subsequently
amortised on an effective interest rate basis over the life of the
loan and are shown net on the face of the Consolidated Statement of
Financial Position over the life of the lease.
(m) Net Asset Value
In circumstances where the Directors are of the opinion that the
NAV or NAV per Share, as calculated under prevailing accounting
standards, is not appropriate or could give rise to a misleading
calculation, the Directors, in consultation with the Administrator
may determine, at their discretion, an alternative method for
calculating a more useful value of the Group and shares in the
capital of the Company, which they consider more accurately
reflects the value of the Group.
3. SIGNIFICANT JUDGEMENTS AND ESTIMATES
In the application of the Group's accounting policies, which are
described in Note 2, the Directors are required to make judgements,
estimates and assumptions about the carrying amounts of assets and
liabilities that are not readily apparent from other sources. The
estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant.
Actual results may differ from these estimates. The estimates and
underlying assumptions are reviewed on an ongoing basis. Revisions
to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period or in
the period of the revision and future periods if the revision
affects both current and future periods.
The significant judgements made by management in applying the
Group's accounting policies and the key sources of estimation
uncertainty were the same as those described in the last annual
financial statements. As such only the significant judgements and
estimates are included that are significant to an understanding of
the changes in the Group's financial position and performance since
the last annual financial statements.
KEY SOURCES OF ESTIMATION UNCERTAINTY
Residual value of Aircraft used in depreciation calculation
As described in Note 2 (j), the Group depreciates the Assets on
a straight line basis over the term of the lease after taking into
consideration the estimated residual value. IAS 16 Property, Plant
and Equipment requires residual value to be determined as an
estimate of the amount that the Group would currently obtain from
disposal of the Asset, after deducting the estimated costs of
disposal, if it were of the age and condition expected at the end
of the lease.
The estimation of residual value remains subject to uncertainty.
If the estimate of residual value in USD terms, had for instance,
decreased by 20% with effect from the beginning of this period, the
net profit for the period and closing shareholders' equity would
have been decreased by approximately GBP8.76 million (30 September
2019: GBP9.76 million). An increase in residual value by 20% would
have had an equal but opposite effect. This reflects the range of
estimates of residual value that the Directors believe would be
reasonable at this time.
Impairment
Factors that are considered important which could trigger an
impairment review include, but are not limited to, significant
decline in the market value beyond that which would be expected
from the passage of time or normal use, significant changes in the
technology and regulatory environments, evidence from internal
reporting which indicates that the economic performance of the
asset is, or will be, worse than expected. The Board together with
the Asset Manager decided that it was prudent to conduct an
impairment test in the year ended 31 March 2020.
As described in note 2(j), an impairment loss exists when the
carrying value of an asset or cash generating unit exceeds its
recoverable amount, which is the higher of its fair value less
costs to sell and its value in use. The Directors review the
carrying amounts of the Assets at each audited reporting date and
monitor the Assets for any indications of impairment as required by
IAS 16 Property, Plant and Equipment and IAS 36 Impairment of
Assets.
The Board has considered the carry book value of its Aircraft
and discussed whether in light of recent announcements since 1
April 2020, whether an impairment review needs to be carried out
again at this juncture. On the advice of its Asset Manager, the
conclusion reached was that whilst it would be wise not to lay too
great a reliance on the current carry book value as a measure of
net asset value for investment purposes, there were still too few
new data points available on which a new appraisal post 31 March
2020 can be relied on at the 30 September 2020 period end. The
Group will again be carrying out a full and thorough appraisal of
residual values come the next March financial year end.
4. RENTAL INCOME
1 Apr 2020 1 Apr 2019
to to
30 Sep 2020 30 Sep 2019
GBP GBP
US Dollar based rent income 83,244,474 100,609,235
Revenue earned but not yet received 1,272,105 6,838,671
Revenue received but not yet earned (84,231) (133,411)
------------ ------------
84,432,348 107,314,495
Amortisation of advance rental income
(US Dollar) 2,207,041 2,222,057
------------ ------------
86,639,389 109,536,552
British Pound based rent income 17,296,815 22,732,633
Revenue earned but not yet received 55,369 75,002
Revenue received but not yet earned (39,442) (49,310)
------------ ------------
17,312,742 22,758,325
Total rental income 103,952,131 132,294,877
------------ ------------
Rental income is derived from the leasing of the Assets. US
Dollar based rent represents rent received in USD and British Pound
based rent represents rent received in "GBP". Rental income
received in USD is earned by the subsidiaries and is consolidated
by translating it into the functional currency (GBP) at the average
rate for the period.
An adjustment has been made to spread the actual total income
receivable over the term of the lease on an annual basis. In
addition, advance rentals received have also been spread over the
full term of the leases. The four A350-900 aircraft have variable
lease rentals, the variable portion of which is treated as
contingent rent. Contingent rent is recognised in the period in
which it is earned.
The contingent rent for the period ended 30 September 2020 is
GBP547,014 per annum (30 September 2019: GBP3,793,974).
5. OPERATING EXPENSES
1 Apr 2020 1 Apr 2019
to to
30 Sep 2020 30 Sep 2019
GBP GBP
Corporate and shareholder adviser
fee 1,239,061 1,206,969
Asset management fee 2,527,331 1,719,076
Administration fees 238,034 241,715
Bank charges 3,568 4,852
Registrar's fee 8,020 8,783
Audit fee 53,322 27,457
Directors' remuneration 134,532 134,532
Directors' and Officers' insurance 44,227 20,046
Legal and professional expenses 371,656 55,952
Annual regulatory fees 9,154 10,924
Sundry costs 105,608 71,863
4,734,513 3,502,169
============ ============
6. DIRECTORS' REMUNERATION
With effect from 1 January 2019, the directors fees are
GBP61,500 per annum with the Chairman receiving an additional fee
of GBP15,375 per annum and the Chair of the audit an additional
GBP7,688 per annum.
7. DIVIDS IN RESPECT OF SHARES
1 Apr 2020 to
30 Sep 2020
GBP Pence
per
Share
First dividend - -
Second dividend - -
- -
============ ======
1 Apr 2019 to
30 Sep 2019
GBP Pence
per
Share
First dividend 13,246,406 2.0625
Second dividend 13,246,406 2.0625
26,492,812 4.1250
=========== =======
Refer to note 27 for the dividend declared after the period
end.
8. (LOSS)/EARNINGS PER SHARE
(Loss)/earnings per Share ("EPS") is based on the loss for the
period of GBP9,330,235 and 423,487,339 shares (30 September 2019:
profit of GBP5,863,945 and 642,250,000 Shares) being the weighted
average number of Shares in issue during the period.
There are no dilutive instruments and therefore basic and
diluted EPS are identical.
9. PROPERTY, PLANT AND EQUIPMENT - AIRCRAFT
Aircraft Aircraft
30 Sep 2020 31 Mar 2020
GBP GBP
COST
Aircraft purchases
- opening balance 1,927,735,270 2,414,868,310
Acquisition costs -
opening balance 8,364,798 10,277,000
Disposals - (551,967,489)
Translation adjustment
on foreign operations* 164,537,883 312,026,871
-------------- --------------
Cost as at period/year
end 2,100,637,951 2,185,204,692
-------------- --------------
Aircraft Aircraft
30 Sep 2020 31 Mar 2020
GBP GBP
ACCUMULATED DEPRECIATION, IMPAIRMENT
AND AMORTISATION
Opening balance 470,695,842 360,615,169
Depreciation for the current period/year
based on previous year residual
values 61,144,782 141,530,508
Amortisation of acquisition costs
on aircraft 188,612 918,342
Adjustment due to movement in USD
residual values* - 16,156,765
Net depreciation charge on all aircraft
for the period/year 61,333,394 158,605,615
Disposals - (113,627,384)
Translation adjustment on foreign
operations* (19,434,540) 21,922,424
-------------- --------------
Accumulated depreciation as at period/year
end 512,594,696 427,515,824
-------------- --------------
Adjustment due to impairment - 43,714,477
Translation adjustment on foreign
operations* - (534,459)
Accumulated depreciation and impairment
as at period/year end 512,594,696 470,695,842
Carrying amount - opening balance 1,714,508,850 2,247,415,403
============== ==============
Carrying amount as at period/year
end 1,588,043,255 1,714,508,850
============== ==============
* The Group believes that the use of forecast market values
excluding inflation best approximates residual value as required
per IAS 16 Property, Plant and Equipment (refer to note 3). In 2019
the decision was made by the Board to re-designate the functional
currency of the subsidiaries to USD and to classify them as foreign
operations. Therefore the carrying values of the aircraft in the
subsidiaries in USD have been re-translated at the closing Sterling
/ US Dollar exchange rate at 30 September 2020 (and 31 March 2020)
for consolidation purposes through "Translation adjustment on
foreign operations".
In order to complete purchases of the aircraft, subsidiaries of
the Company have entered into debt financing agreements with a
senior fully amortising loan and junior balloon loan (see note 15).
The Company used the equity proceeds (see note 16) in addition to
the finance agreements to finance the acquisition of the aircraft.
Subject to the below, rentals under each lease are sufficient to
pay the senior loan payment (being capital and interest and junior
loan payments due (being interest only), also in USD.
Exceptions to the above include senior loans with an outstanding
balance of GBP308,997,913 (31 March 2020: GBP332,946,866) at period
end, which have balloon capital payments on maturity. Any junior
loan principal and senior loan capital due at maturity, is expected
to be repaid at lease expiry out of the proceeds of the sale,
re-lease, refinancing or other disposition of the relevant
Asset.
The Group can sell the Assets during the term of the leases
(with the lease attached and in accordance with the terms of the
transfer provisions contained therein). Under IAS 16 the direct
costs
attributed in negotiating and arranging the operating leases
have been added to the carrying amount of the leased Asset and
recognised as an expense over the lease term.
In the prior year on 25th February 2020, the Group announced its
completion of the sale of two A380-800 aircraft. The sales included
the full repayment of the financing arrangements on both aircraft,
including applicable swap breakage and facility prepayment
costs.
The Group's aircraft with carrying values of GBP1,588,043,255
(31 March 2020: GBP1,714,508,850) are pledged as security for the
Group's borrowings (see note 15).
Refer to note 3 for consideration by the Group with respect to
an impairment test for the period.
Change in estimate
The Group conducted a review on the aircraft held at 31 March
2020, which resulted in changes in the residual value of the
aircraft at the end of the lease. The effect of these changes on
depreciation are included in the 31 March 2020 reconciliation of
accumulated depreciation and amortisation table above where the
depreciation before and after the residual value adjustment is
noted.
10. FINANCE COSTS
1 Apr 2020 1 Apr 2019
to to
30 Sep 2020 30 Sep 2019
GBP GBP
Amortisation of debt arrangements
costs 848,499* 1,049,052*
Interest payable on loan ** 22,500,349* 34,527,664*
Security trustee and agency fees 103,583 143,642
Fair value adjustment on financial
assets at fair value through profit
and loss (see Note 17) 1,495,898 13,684,930
24,948,329 49,405,288
------------- -------------
*Included in Finance costs is interest on amortised cost
liability for the period of GBP23,348,848 (30 September 2019:
GBP35,576,716)
** This amount includes GBP219,141 interest income (30 September
2019: GBP87,907 interest income) from the interest rate swaps.
11. OPERATING LEASES
The amounts of lease receipts at the reporting date under non
cancellable operating leases are detailed below:
30 September 2020 30 September 2019
US Dollar British Pound US Dollar British Pound
based rent based rent based rent based rent
income income income income
Months Years Years Total
GBP GBP GBP GBP
Year 1 156,051,880 34,668,972 201,600,025 45,446,952
Year 2 162,145,892 34,769,655 199,712,165 45,446,952
Year 3 162,145,892 34,769,655 199,712,165 45,446,952
Year 4 162,145,893 34,769,655 199,712,165 45,446,952
Year 5 162,145,893 34,769,654 199,712,164 45,446,952
Year 6 onwards 440,160,835 66,435,360 766,596,539 149,982,057
-------------- -------------- -------------- --------------
1,244,796,285 240,182,951 1,767,045,223 377,216,817
-------------- -------------- -------------- --------------
The twelve (2019: fourteen) assets all have an initial lease
term of twelve years with lease end dates ranging from September
2026 to January 2030.
At the end of each lease the lessee has the right to exercise an
option to purchase the Asset at the discretion of the Company. If a
purchase option event occurs the Company and the lessee will be
required to arrange for a current market value appraisal of the
Asset to be carried out by three independent appraisers. The
purchase price will be equal to the average valuation of those
three appraisals.
12. RECEIVABLES
30 Sep 2020 31 Mar 2020
GBP GBP
Prepayments 149,560 140,087
Vat receivable 5,127 -
------------- ------------
154,687 140,087
Accrued rental income 30,993,651 7,338,452
Provision for impairment
of accrued rental income (22,969,273) -
8,024,378 7,338,452
============= ============
8,179,065 7,478,539
============= ============
The above carrying value of receivables is deemed to be
materially equivalent to fair value, given that they are short term
in nature.
13. SHORT TERM INVESTMENTS
Rate Maturity 31 Mar
30 Sep 2020 2020
Bank % date GBP GBP
Bank of Nova Scotia 0.84 6 Jul 2020 - 1,001,614
UBS AG 0.935 20 Oct 2020 - 1,705,105
Lloyds Bank 0.95 13 Nov 2020 - 1,705,060
Credit Suisse 0.98 18 Nov 2020 - 1,705,324
Santander UK plc 1.83 25 Jan 2021 787,858 811,090
Standard Chartered
Bank 1.73 12 Feb 2021 786,795 809,583
HSBC Bank plc 0.97 6 Jan 2021 151,431 -
Cooperatieve Rabobank 0.84 11 Jan 2021 201,235 -
Santander UK plc 0.09 1 Feb 2021 1,700,259 -
Santander UK plc 0.23 16 Mar 2021 1,001,308 -
HSBC Bank plc 0.65 4 May 2021 704,092 -
BNP Paribas London 18 Jun 2021 1,003,839 -
Branch
Skandinaviska Enskilda
Banken 0.26 24 Jun 2021 1,702,925 -
Barclays Bank 0.39 28 Jun 2021 1,705,147 -
HSBC Bank plc 0.25 6 Aug 2021 750,982 -
UBS AG 0.48 28 May 2021 776,250 -
Canadian Imperial
Bank of Commerce 0.4 6 Jul 2021 387,575 -
11,659,696 7,737,776
============ ==========
The above investments represent certificates of deposits and are
held by HSBC Securities Services in London under a custody
agreement between Ravenscroft Cash Management and HSBC Bank plc for
Global Custody Services.
14. PAYABLES
30 Sep 2020 31 Mar 2020
GBP GBP
Accrued administration
fees 34,107 44,117
Accrued audit fee 50,514 68,864
Accrued registrar fee 1,275 3,059
Other accrued expenses 65,782 262
Taxation payable 91,668 66,571
Share redemption payable 98,478,292 -
98,721,638 182,873
============ ============
The above carrying value of payables is equivalent to the fair
value due to their short term maturity period and nature as
repayable on demand.
15. BORROWINGS
30 Sep 2020 31 Mar 2020
Borrowings GBP GBP
Bank loans 1,153,264,666 1,247,317,838
Total associated costs (12,696,810) (14,073,073)
-------------- --------------
1,140,567,856 1,233,244,765
============== ==============
Consisting
of:
Senior loans ($1,201,565,049
at 30 September 2020, $1,259,670,653
at 31 March 2020 ) 930,003,908 1,014,227,579
Junior loans ($272,048,622
at 30 September 2020, ($272,019,345
at 31 March 2020) 210,563,948 219,017,186
1,140,567,856 1,233,244,765
============== ==============
Borrowings
Non-current portion 1,039,022,783 1,129,651,234
Current portion (senior
loans only) 101,545,073 103,593,531
-------------- --------------
1,140,567,856 1,233,244,765
============== ==============
The tables below detail the future contractual undiscounted cash
flows in respect of the senior and junior loans, including both the
principal and interest payments, and will not agree directly to the
amounts recognised in the Consolidated Statement of Financial
Position.
Borrowings: Amount due for
settlement within 12 months 141,857,962 151,651,846
============ ============
Consisting
of:
Senior loans covered by lease rental
receipts (capital
and interest) 130,792,763 140,139,040
Repayments of junior debt covered
by lease
rental receipts (interest only except
for B1 Junior loan) 11,065,199 11,512,806
------------ ------------
30 Sep 2020 31 Mar 2020
GBP GBP
Borrowings: Amount due for settlement
after 12 months and before 60 months 572,435,311 608,416,635
Consisting of:
Senior loans covered by lease rental
receipts (capital and interest) 528,206,931 562,396,143
Repayments of junior debt covered
by lease
rental receipts (interest only except
for B1 Junior loan) 44,228,380 46,020,492
------------ ------------
Borrowings: Amount due for settlement
after 60 months 641,738,918 701,713,951
============
Consisting
of:
Senior loans covered by lease rental
receipts (capital and interest) and
uncovered senior loans (for balloon
payment at maturity) 408,715,886 453,577,466
Repayments of junior debt covered
by lease rental receipts (interest
only except for one of the junior
loans) and uncovered (capital repaid
at maturity) 233,023,032 248,136,485
================ ============
Loans with an outstanding balance of GBP831,569,943 (31 March
2020: GBP904,088,779) have fixed interest rates over the term of
the loans. Of this total loans with an outstanding balance of
GBP293,037,264 (31 March 2020: GBP317,722,925) although having
variable rate interest, also have associated interest rate hedging
contracts issued by the lenders in effect fixing the loan interest
over the terms of the loans. Loans with an outstanding amount of
GBP308,997,913 (31 March 2020: GBP329,155,986) at period end are
variable rate with no associated hedge of the interest exposure,
although the related lease rentals are also floating rate to match,
and each senior loan has a USD 15,000,000 balloon capital payment
on maturity. Senior loans have both interest and capital repayments
whereas junior loans only have interest repayments with the capital
to be repaid on maturity.
Transaction costs of arranging the loans have been deducted from
the carrying amount of the loans and will be amortised over their
respective lives.
On 25th February 2020, the Group announced its completion of the
sale of two A380-800 aircraft. The sales included the full
repayment of the financing arrangements on both aircraft, including
applicable swap breakage and facility prepayment costs. This
included the settlement of the Ijarah Finance.
16. SHARE CAPITAL
The Share Capital of the Company is represented by an unlimited
number of redeemable ordinary shares of no par value.
Issued 30 Sep 2020 31 Mar 2020
Ordinary Ordinary
Shares Shares
Opening balance 642,250,000 642,250,000
Shares redeemed (214,083,243) -
Total number of shares as at period/year
end 428,166,757 642,250,000
============== ==============
Issued 30 Sep 2020 31 Mar 2020
Ordinary Ordinary
Shares Shares
GBP GBP
Ordinary Shares
Opening balance 655,585,000 655,585,000
Shares redeemed (98,478,292) -
Share issue costs (7,946,303) (7,946,303)
Total share capital as at period/year
end 549,160,405 647,638,697
============= ============
The Company's total issued Share capital at 30 September 2020
was 428,166,757 Shares, none of which were held in treasury.
Therefore the total number of voting rights in issue was
428,166,757.
Members holding Shares are entitled to receive, and participate
in the following: any dividends out of income attributable to the
Shares; other distributions of the Company available for such
purposes and resolved to be distributed in respect of any
accounting period; or other income or right to participate
therein.
On a winding up of the Company, shareholders are entitled to the
surplus assets attributable to the Share class remaining after
payment of all the creditors of the Company.
As announced on 23 September 2020, the Board of directors of the
Company resolved on that date to redeem one ordinary share for
every three existing ordinary shares of shareholders on the
register of members as at close of business on 25 September 2020
(the "Redemption Record Date"). Accordingly, 214,083,243 ordinary
shares were redeemed and have now been cancelled.
The redemption proceeds due on the redemptions of these ordinary
shares were paid on 9 October 2020.
17. FINANCIAL INSTRUMENTS
The Group's main financial instruments comprise:
(a) Cash and cash equivalents that arise directly from the Group's operations; and
(b) Debt secured on non-current assets.
(c) Interest rate swaps.
(d) Security deposits.
(e) Short term investments.
The Group's objective is to obtain income returns and a capital
return for its Shareholders by acquiring, leasing and then selling
aircraft.
The following table details the categories of financial assets
and liabilities held by the Group at the reporting date:
30 Sep 2020 31 Mar 2020
GBP GBP
Financial assets
Cash and cash equivalents 244,891,877 247,911,207
Short term investments 11,659,696 7,737,776
Accrued rental income* 8,024,378 7,338,452
264,575,951 262,987,435
============ ============
*This amount represents rent due but not yet received and net of
provision for impairment (see note 12) and is included within
Receivables on the Statement of Financial Position.
30 Sep 2020 31 Mar 2020
GBP GBP
Financial liabilities
Payables and security deposits 112,188,289 14,333,162
Financial liabilities at
fair value through profit
and loss 14,279,764 12,783,866
Debt payable (including
Ijarah financing in the
prior year) 1,153,264,666 1,247,317,838
1,279,732,719 1,274,434,866
============== ==============
Derivative financial instruments
The following table shows the Company's derivative position as
at 30 September 2020 with a comparative table as at 31 March
2020:
30 Sep 2020 31 March 2020
Financial liabilities
at fair value (GBP) 14,279,764 12,783,866
Notional amount (USD) 397,651,898 407,251,340
Notional amount (GBP) 307,780,107 327,899,630
The maturity dates range from 13 April 2028 to 21 August 2028
(31 March 2020: 13 April 2028 to 21 August 2028).
The decrease in the fair value of the Interest Rate Swaps for
the year of GBP1,495,898 (31 March 2020: decrease of GBP26,496,358)
is reflected in Finance Costs in note 10. The notional amount
amortises in line with the underlying liability.
18. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
These half yearly financial statements do not include all
financial risk management information and disclosures required in
the annual financial statements; as such they should be read in
conjunction with the Group's annual financial statements as at 31
March 2020.
The main risks arising from the Group's financial instruments
are capital management risk, foreign currency risk, credit risk,
liquidity risk and interest rate risk. The Board regularly review
and agrees policies for managing each of these risks and these are
summarised below:
(a) Capital management
The Group manages its capital to ensure ability to continue as a
going concern while maximising return to Shareholders through the
optimisation of debt and equity balances.
The capital structure of the Group consists of debt, which
includes borrowings disclosed in Note 15, cash and cash equivalents
and equity attributable to equity holders, comprising issued
capital and retained earnings.
The Group's Board of Directors reviews the capital structure on
a bi-annual basis.
Equity includes all capital and reserves of the Company that are
managed as capital.
On 6 April 2020 the Board announced that it was temporarily
suspending the declaration of dividends. However the Board
announced the declaration of a dividend subsequent to the period
end (refer to note 27).
The Board decided to return to Shareholders GBP98.5 million on
25 September 2020 by way of a compulsory redemption of one-third of
the ordinary shares in the capital of the Company (being the
redemption of approximately 214,083,243 Shares) at a redemption
price of 46 pence per each redeemed share. Accordingly, 214,083,243
ordinary shares were redeemed and have now been cancelled.
(b) Foreign currency risk
The Group endeavoured to mitigate the risk of foreign currency
movements by matching its USD rentals with USD debt to the extent
necessary.
Lease rentals (as detailed in Notes 4 and 11) are received in
USD and GBP. Rental income received in USD is used to pay loan
interest and regular capital repayments of debt (but excluding any
bullet or balloon repayment of principal), which are likewise
denominated in US Dollars. USD lease rentals and loan repayments
are furthermore fixed at the outset of the Company's life and are
very similar in amount and timing save for the repayment of bullet
and balloon repayments of principal due on the final maturity of a
loan to be paid out of the proceeds of the sale, re-lease,
refinancing or other disposition of the relevant aircraft and/or
any accumulated GBP rental income not distributed.
The matching of lease rentals to settle these loan repayments
therefore mitigates risks caused by foreign exchange
fluctuations.
The USD/GBP exchange rate was 1.2920 at 30 September 2020
(1.2420 at 31 March 2020).
On the eventual sale of the Assets, the Group may be subject to
foreign currency risk if the sale was made in a currency other than
British Pound. Transactions in similar assets are typically priced
in USD.
(c) Credit Risk
Credit risk refers to the risk that a counterparty will default
on its contractual obligations resulting in financial loss to the
Group.
The credit risk on cash transactions are mitigated by
transacting with counterparties that are regulated entities subject
to prudential supervision, or with high credit ratings assigned by
international credit rating agencies.
The Group's financial assets exposed to credit risk are as
follows:
30 Sep 2020 31 Mar 2020
GBP GBP
Cash and cash equivalents 244,891,877 247,911,207
Short term investments 11,659,696 7,737,776
Accrued rental income (gross
- see note 12) 30,993,652 7,338,452
------------ ------------
287,545,225 262,987,435
============ ------------
Surplus cash in the Group is held with Barclays, HSBC, Lloyds,
RBSI and Bank of Ireland, which have credit ratings given by
Moody's of P-1, P-1, P-1, P-1 and P-2 (31 March 2020: A1, Aa2, Aa2,
A3 and A2) respectively. Surplus cash in the Subsidiaries is held
in accounts with RBSI and Westpac, which have credit ratings given
by Moody's of P-1 and P-1 (31 March 2020: A3 and Aa2)
respectively.
Short term investments relate to deposits held with Bank of
Novia Scotia, UBS, Lloyds, Credit Suisse, Santander UK, Standard
Chartered, HSBC, Cooperatieve Rabobank, BNP Paribas, Skandinaviska
Enskilda, Barclays and Canadian Imperial which all have the same
credit rating given by Moody's of P-1(31 March 2020: P-1).
The credit quality and risk of lease transactions with
counterparty airlines is evaluated upon conception of the
transaction. In addition, ongoing updates as to the operational and
financial stability of the airlines are provided by the Company's
Asset Manager in its quarterly reports to the Company.
The COVID-19 pandemic has resulted in widespread restrictions on
the ability of people to travel and such has had a material
negative effect on the airline sector, and by extension the
aircraft leasing sector. This may lead to the inability of airlines
to pay rent as they fall due.
At the inception of each lease, the Company selected a lessee
with a strong Statement of Financial Position and financial
outlook. The financial strength of Emirates and Thai Airways is
regularly reviewed by the Directors and the Asset Manager. The
Group generally requires its customers to pay rentals in advance
and provide collateral in the form of cash or letters of credit as
security deposits for leases. Security deposits and maintenance
reserve liabilities are held in relation to funds received at the
period end for the timely and faithful performance of the lessees'
obligations under the lease agreements for the four A350-900
aircraft. However, the security deposits do not cover the full
value of the Group's obligations pursuant to the loan agreements in
the event of termination of the leases or default by Emirates or
Thai Airways.
In the case of materialisation of the risk related to the lessee
counterparty creditworthiness and described in more detail in note
2(g) Going Concern, the fixed rents receivable under the leases may
not be sufficient to meet the loan interest and regular capital
repayments of debt scheduled during the life of each loan and may
not provide surplus income to pay for the Group's expenses.
The Group's most significant counterparties are Emirates and
Thai Airways as lessees and providers of income. Both of the
Group's lessees do not currently have a credit rating.
Refer to note 2(g) Going Concern for further details on the
current status of the Group's lessees and 2(i) for further details
on the maintenance reserves and security deposits.
The Group assesses on a forward looking basis the expected
credit losses associated with its accrued rental income carried at
amortised cost. The impairment methodology applied depends on
whether there has been a significant increase in credit risk. The
Group has chosen to apply the simplified approach to measuring
expected credit losses which uses a lifetime expected loss
allowance for all trade receivables. During the current period, due
to non-payment of lease rentals by Thai Airways as explained in
note 2(g), a provision has been raised for the impairment of
amounts due in full (see the Consolidated Statement of
Comprehensive Income) as considered prudent in the circumstances.
Apart from the receivables from Thai Airways, the accrued rental
income and receivables at amortised cost at year end are short-term
(i.e. no longer than 12 months) and have been settled after year
end. Except for the accrued rental with respect to Thai Airways,
any identified impairment losses on such assets are not
significant.
The Group has considered the effects of the expected credit loss
on cash and is satisfied that no expected credit loss is required
as it is not considered material.
(d) Liquidity Risk
Liquidity risk is the risk that the Group will encounter
difficulty in realising assets or otherwise raising funds to meet
financial commitments such as capital repayments of junior debt at
the end of the lease. The Group's main financial commitments are
its ongoing operating expenses and repayments on loans.
Ultimate responsibility for liquidity risk management rests with
the Board of Directors.
Subsequent to the period end, a dividend was declared as
detailed in note 27 Subsequent Events. Consideration will given to
any future use of accumulated rental income, if the Board considers
that the Company will not be able to repay any balloon and bullet
repayments of debt falling due through the sale, refinancing or
other disposition of an Asset.
Refer to note 2(g) Going Concern for further details on the
current status of arrangements that are being put in place with
lenders.
As announced on 23 September 2020, the Board of Directors of the
Company resolved on that date to redeem one ordinary share for
every three existing ordinary shares of shareholders on the
register of members as at close of business on 25 September 2020
(the "Redemption Record Date"). Accordingly, 214,083,243 ordinary
shares were redeemed and have now been cancelled.
In addition to the bank loans, the Group may from time to time
use borrowings. To this end the Group may arrange an overdraft
facility for efficient cash management. The Directors intend to
restrict borrowings other than the bank loans to an amount not
exceeding 15 per cent. of the net asset value of the Group at the
time of drawdown. Borrowing facilities will only be drawn down with
the approval of the Directors on a case by case basis.
(e) Interest Rate Risk
Interest rate risk arises from the possibility that changes in
interest rates will affect future cash flows. It is the risk that
fluctuations in market interest rates will result in a variation in
deposit interest earned on bank deposits held by the Group or on
debt repayments.
With the exception of loans with an outstanding balance of
GBP308,997,913 (31 March 2020: GBP329,155,986) as at period end,
the Group mitigates interest rate risk by fixing the interest rate
on the bank loans (as well as in respect of loans with an
outstanding balance of GBP643,414,216 (31 March 2020:
GBP317,722,925) as at period end, which have an associated interest
rate swap to fix the loan interest).
If a reasonable possible change in interest rates had been 100
basis points higher/lower throughout the period and all other
variables were held constant, the Group's net assets attributable
to shareholders as at 30 September 2020 would have been
GBP2,289,312 (31 March 2020: GBP2,364,781) greater/lower due to an
increase/decrease in the amount of interest receivable on the bank
balances.
19. ULTIMATE CONTROLLING PARTY
In the opinion of the Directors, the Company has no ultimate
controlling party.
20. CASH AND CASH EQUIVALENTS
30 Sep 2020 31 March 2020
GBP GBP
Bank balances 244,891,877 247,911,207
244,891,877 247,911,207
============ ==============
Included in the cash and cash equivalents are secured cash
deposits of GBP72,070,510 (31 March 2020: GBP73,595,123) in respect
of security deposits and maintenance reserves.
21. SECURITY DEPOSITS
30 Sep 2020 31 March
2020
GBP GBP
Security deposit liability 13,466,651 14,150,289
13,466,651 14,150,289
============ ===========
The Security deposits are held in relation to funds received at
the period end for the timely and faithful performance of the
lessees' (Thai) obligations under the lease agreements for the four
A350-900 aircraft. Security deposits are contractually bound to be
repaid if not utilised. The deposits are repayable to the lessees
on the expiration of the lease agreements and have accordingly been
classified as non-current. Refer to note 2(i) for accounting
policies adopted on the security deposits.
22. MAINTENANCE RESERVES
30 Sep 2020 31 March
2020
GBP GBP
Balance at 1 April 59,444,834 32,365,575
Movements for the period/year (840,975) 27,079,259
Balance at period end 58,603,859 59,444,834
------------ -----------
The maintenance reserve liabilities are held in relation to
funds received at the period end for the timely and faithful
performance of the lessees' obligations under the lease agreements
for the four A350-900 aircraft. Amounts accumulated in the
maintenance reserve will be repaid only as re-imbursements for
actual maintenance expenses incurred by the lessee. Refer to note
2(i) for accounting policies adopted on the maintenance reserves.
The table below details the expected utilisation of maintenance
reserves.
1-3 3-12 1-2 2-5 Over 5 Total
Months Months Years Years Years
GBP GBP GBP GBP GBP GBP
30 Sep 2020 - - 47,048,689 141,888 11,413,281 58,603,859,
31 Mar 2020 - - 47,711,960 144,523 11,588,351 59,444,834
======= ======= =========== ======== =========== ==============
23. TAX
30 Sep 2020 30 Sep 2019
USD USD
Profit before tax of AA4P Leasing Ireland Limited and AA4P Leasing Ireland 2 Limited 286,036 352,383
------------ ------------
Irish tax at 12.5% 35,754 44,048
============ ============
GBP GBP
Tax expense (converted into GBP) 28,444 30,899
============ ============
Irish tax is charged at 12.5% on each of the AA4P Leasing
Ireland Limited and AA4P Leasing Ireland 2 Limited subsidiaries.
The Company and the Guernsey Subsidiaries have been assessed for
tax at the Guernsey standard rate of 0%. Since AA4P Leasing Ireland
Limited and AA4P Leasing Ireland 2 Limited are Irish tax resident
trading Companies, they will not be subject to Guernsey tax, but
their net lease rental income earned (after tax deductible
expenditure) will be taxable as trading income at 12.5% under Irish
tax regulations.
24. ACCRUED AND DEFERRED INCOME
The deferred and accrued income represents the difference
between actual payments received in respect of the lease income
(including some received in full upfront) and the amount to be
accounted for in the accounting records on a straight line basis
over the lease terms. The accrued and deferred income consists of
the following:
30 Sep 2020 31 March 2020
GBP GBP
Accrued income 14,046,771 14,446,150
Deferred income (36,101,510) (40,136,323)
============= ==============
25. RELATED PARTY TRANSACTIONS
Amedeo Limited is the Group's Asset Manager.
During the period, the Group incurred GBP2,521,812 (30 September
2019: GBP1,713,584) of fees with Amedeo, of which GBPNil (31 March
2019: GBPNil) was outstanding to this related party at 30 September
2020. This fee is included under "Asset management fee" in note
5.
Following the disposal of the "IPO Assets" (being collectively
the first four assets purchased), the Company shall pay to Amedeo
disposition fees calculated as detailed in the prospectus, which
can be found on the Group's website. Fees range from 1.75% to 3% of
the sale value. The fee for the remaining eight aircraft is 3%.
Amedeo Services (UK) Limited ("Amedeo Services") is the Group's
Liaison and Administration Oversight Agent (the agent is appointed
to assist with the purchase of the aircraft, the arrangement of
suitable equity and debt finance and the negotiation and
documentation of the lease and financing contracts).
During the period, the Group incurred GBP5,519 (30 September
2019: GBP5,492) of fees with Amedeo Services. As at 30 September
2020 GBPNil (31 March 2020: GBPNil) was outstanding. This fee is
included under "Asset management fee" in note 5.
Nimrod Capital LLP ("Nimrod") is the Company's Corporate and
Shareholder Adviser.
During the period, the Group incurred GBP1,239,061 (30 September
2020: GBP1,206,969) of fees with Nimrod. These expenses relate to
corporate and shareholder advisory fees as shown in note 5.
GBP65,530 (31 March 2020: GBPNil) was outstanding to this related
party at 30 September 2020.
JTC Registrars Limited ("JTCRL") is the Company's registrar,
transfer agent and paying agent. During the period the Group
incurred GBP8,020 (30 September 2019: GBP8,783) of costs with
JTCRL, of which GBP1,275 (31 March 2020: GBP3,059) was outstanding
as at 30 September 2020.
26. SEGMENT INFORMATION
The Directors are of the opinion that the Group is engaged in a
single segment of business, being acquiring, leasing and selling
aircraft.
Geographical analysis
30 Sep 2020 Middle East Asia Pacific Total
GBP GBP GBP
Rental income 77,453,145 26,498,986 103,952,131
============== ============= ==============
Net book value - aircraft 1,087,950,833 500,092,422 1,588,043,255
============== ============= ==============
31 March 2020 Middle East Asia Pacific Total
GBP GBP GBP
Rental income 198,732,556 57,827,781 256,560,337
============== ============= ==============
Net book value - aircraft 1,179,178,238 535,330,612 1,714,508,850
============== ============= ==============
Revenue from the Group's country of domicile, Guernsey, was
GBPNil (2020: GBPNil).
27. SUBSEQUENT EVENTS
On 13 October 2020 the Directors of the Company declared an
interim dividend of 1.15 pence per Share in respect of the 31 March
2021 financial year. This dividend of GBP4,923,918 was paid on 30
October 2020 to holders of record 23 October 2020.
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END
IR BLBDDRXGDGGR
(END) Dow Jones Newswires
December 07, 2020 11:44 ET (16:44 GMT)
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