Avation plc (LON:AVAP), the commercial aircraft lessor, has reported an impressive set of results for the financial year ended 30 June 2025, highlighting its strategic focus on fleet optimisation and financial resilience. With a fleet of 33 aircraft and a clear commitment to maintaining high utilisation rates, Avation has entered FY26 with solid momentum.
In its latest research note, Zeus Capital analysts John Cummins and Charlie Cullen praised the company’s progress, particularly its strong revenue growth and improving balance sheet. Revenue for FY25 came in at $110.1 million, marking a 19.2% increase year-on-year and surpassing Zeus’s expectations of $102.3 million. The boost was driven by a combination of higher maintenance reserve revenue and improved lease income, notably through the addition of an A320-200 in March 2025.
EBITDA rose by 20.3% to $107.1 million, despite a decline in adjusted profit before tax (adj. PBT) to $4.2 million from $40.8 million the previous year, which had included significant one-off fair value gains. Net debt reduced by $47 million to $604 million, again beating Zeus’s forecast. These figures reflect Avation’s disciplined approach to capital allocation, including the sale of two ATR 72-600 aircraft and a strategic acquisition of a leased A320-200.
Analyst John Cummins of Zeus Capital remarked, “We continue to view Avation as very well placed, with positive market dynamics, balance sheet capacity to rebuild the fleet with further narrowbody purchases and ATR deliveries from the orderbook, alongside improving underlying trading.”
Avation’s active management of its fleet was a standout feature of FY25. The company acquired an A320-200 already leased to Etihad, took delivery of two ATR 72-600s that were immediately sold at a profit, and successfully completed lease transitions. Looking ahead, two additional ATR aircraft are scheduled for delivery and leasing in FY26.
Zeus has responded to the results by upgrading its FY26 forecasts, with revenue now expected to reach $97.1 million and adj. PBT forecast to climb to $11.2 million – an 18.2% increase over prior estimates. FY27 estimates have also been introduced, reflecting a cautious but steady growth trajectory.
FY25 Financial and Operational Highlights:
- Revenue: $110.1m, up 19.2% year-on-year
- EBITDA: $107.1m, up 20.3%
- Adj. PBT: $4.2m, impacted by prior-year fair value gains
- Net Debt: Reduced by $47m to $604m
- Dividend: Full-year dividend declared at 1.0 cent
- Fleet Developments: Acquired an A320-200; sold four ATR 72-600s; new lease placements secured
From a valuation perspective, Avation continues to trade at over a 40% discount to its reported NAV of 366 cents per share. Zeus notes that this is materially wider than peers and does not reflect the premium aircraft market valuations are currently attracting.
In Summary
Avation’s FY25 results underscore its strategic clarity and financial discipline. The business is well positioned to benefit from strengthening market conditions, with growing lease revenues and reduced leverage providing a strong foundation for future growth. Zeus Capital remains positive on the company’s prospects, noting both its undervaluation and its operational momentum.
