Capital Lease Aviation Plc: HALF YEAR RESULTS - 31 DECEMBER 2013 And Interim Management Report

Capital Lease Aviation Plc (LSE: CLA), the aircraft leasing company, today announces unaudited financial statements for the Company and its subsidiaries for the six month period ended 31 December 2013.

Highlights:
• Two key aircraft leases extended to 2021;
• CLA Group total assets of US$96,025,245; • Revenue of US$6,150,000;
• Group Net post-tax profits of US$1,228,918; • Net assets of US$46,297,527;
• EPS (fully diluted) of 1.26 cents.

Jeff Chatfield, Executive Chairman, said: “The Company has continued to grow net assets and has secured long term lease extensions on two key aircraft assets. These achievements provide both short and long term financial support for the company strategy, which is to expand the asset portfolio by buying aircraft, when transactions with a balance of high returns and acceptable risk can be achieved.”

Notes: For the convenience of international shareholders, an additional column is included to show an equivalent value in Pounds Sterling “GBP”.
1. In this announcement, the applicable exchange rate between US$ and GBP was taken to be the average exchange rate of 1: 0.6316 for Income Statement items and 1: 0.6064 for Statement of Financial Position items.

Directors’ Review of Operations and Strategy

Background and Outcome
The strategic targets for the management over the past six months were to strengthen our financial position, extend leases on key aircraft assets, confirm the long term sustainable business model, remain profitable, actively assess aircraft and pursue new aircraft acquisitions.

The period profit was in excess of US$1.2m for the period; earnings per share are 1.26 cents for the period. The financial position of the group remains strong and it has been able to maintain an adequate cash position of US$6.0m at the end of the period.

Key achievements in the period included:
The leases of the two most valuable aircraft in the fleet were extended out to 2021;
Operational, management and Board restructure;
Adoption of a management information system that improves lease
management capabilities.

The leases extensions to 2021 resulted in a slightly lower income yield from the aircraft however secured long term benefit for the Company. There were also non-recurring finance costs (legal fees) in the amount of US$114,810 associated with the addition of an aircraft to the fleet at the beginning of the period.

Outlook and Risks
To further develop CLA, we are taking a number of initiatives:
- Re-leveraging existing assets to free cash with a view to acquiring additional assets;
- Re-financing existing debt where the outcome is to lower the cost of capital;
- Prioritising repayment of junior debt to lower the cost of capital;
- Pursue individual and portfolio aircraft acquisitions in line with core
strategy.

The risks remain the typical risks of the aircraft leasing industry along with the risks associated with obtaining finance and the residual value risk and impairment in aircraft assets.

I would like to take this opportunity to thank all the shareholders for their continued support and look forward to creating more value for CLA as we continue on our development path.

Jeff Chatfield
Executive Chairman
Singapore, 14 Feb 2013