Avation plc
LSE : AVAP

February 24, 2012 02:00 ET

Avation PLC Interim Results

FOR:  AVATION PLC

LSE SYMBOL:  AVAP

February 24, 2012

                                                    Avation PLC Interim Results


LONDON, UNITED KINGDOM--(Marketwire - Feb. 24, 2012) - AVATION PLC (the "Company") (LSE:AVAP) and its subsidiaries (the
"Group")

REGISTERED NUMBER: 05872328 (ENGLAND & WALES)

CHAIRMAN'S STATEMENT AND INTERIM MANAGEMENT REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2011

The highlights are:


-  Commenced deliveries of a series of Aircraft to Skywest and Virgin
    Australia;
-  Consolidated net profit after tax increased by 30% to GBP 2,057,004 for
    the period;
-  Revenues increased by 21% to GBP 10,060,035;
-  Total assets increased to GBP 150,751,710; and
-  Earnings per share of: 5.29 pence.


Jeff Chatfield, Chairman said "This period demonstrated that the business strategy of Avation Plc is working and
producing reportable increasing profits. I am pleased with current trading as the Company is in the process of
profitably and substantially increasing the number of aircraft owned by the Company."


Enquiries:

Avation PLC
Jeff Chatfield, Chairman                 +44 7783 942 553

Financial Public Relations
Cubitt Consulting                        +44 20 7367 5118
Nicholas Nelson/Chris Lane

Websites
www.avation.net


Business Summary

Avation was formed in 2006 initially to support Skywest Airlines Ltd and was admitted to the Official List of the London
Stock Exchange in November 2010. The Company's main activity is an operating lessor of commercial passenger aircraft to
airlines across Europe, the US and Australia and currently is lessor of 19 passenger aircraft. Early this year the
company entered into the ARAN Agreement to provide a fleet of up to 18 new aircraft which will operate along the East
Coast of Australia. In the opinion of the directors, this was a transformational agreement for the Company.

Results Summary

I am pleased to present the Company's consolidated interim results for the six months ended 31 December 2011 (the
"Period"). Total consolidated revenue for the Period was GBP 10.0 million which was an increase of 21% over the
comparative period (31 December 2010: GBP 8.3 million). The increase was primarily a result of the commencement of a
stream of aircraft deliveries to Virgin Australia. As at 31 December 2011, three aircraft had been delivered. As at the
date of writing this report, six aircraft have been delivered with a further nine aircraft planned for delivery over the
next two years.

The Group's net profit after income tax attributable to the shareholders was recorded as GBP 2.05 million; a 30 per cent
increase over the comparative period (31 December 2010: GBP 1.6 million).

The Group has invested GBP 45.0 million on new aircraft during the Period. These aircraft were leased to Skywest
Airlines (Australia) Pty Ltd ("Skywest") and Virgin Blue Airlines Pty Ltd ("Virgin") pursuant to the Australian Regional
Airline Agreement entered into by the Company with Skywest and Virgin on 10 January 2011 (the "ARAN Agreement"). As a
result, the Group's portfolio of aircraft has expanded by approximately 50% with total assets increasing to GBP 150.8
million. The directors are pleased with this rapid rate of growth in asset base and revenues.

Current Trading

As at the date of this report there is significant business growth occurring with nine aircraft scheduled for delivery.
Four ATR72-600s are scheduled for mid-2012 and a further five option aircraft to be delivered up to 2013/2014, the
combined value of which is approximately GBP 115m. Accordingly, the Company enjoys a visible growth profile stretching
into the mid-term. The Company also owns option and purchase rights for further aircraft which provides further scope
for additional expansion. The Company is also benefiting from the current market low base interest rates.

Subsequent Event

Subsequent to the end of the Period and prior to the date of this announcement, the Company purchased a further 12% of
the issued share capital (the "Transaction") of a subsidiary, Capital Lease Aviation Plc (AIM: CLA) ("CLA"). This price
per share of the Transaction was less than the value of CLA's per share net tangible assets and the Transaction is
earnings accretive to the Company by way of reducing the number of minority interests within the groups capital
structure. Following the Transaction, the Company owns 62.07% of CLA. The Company issued 1,647,781 new ordinary shares
in the Company as consideration for this purchase.

Business Risks

The Group's principal risks and uncertainties are consistent with those set put in the Prospectus submitted to the
London Stock Exchange. It should be noted that the Company has a concentration of assets in a small number of customers.

I am pleased with current trading as the Company is in the process of profitably and substantially increasing the size
of its asset base. I would like to take this opportunity to thank you, the owners of this enterprise, for your support
over this important period and look forward to updating you on the growth in the enterprise in the future.


Jeff Chatfield,
Group Chairman
France, 23 February 2012

AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
FOR THE SIX MONTHS ENDED 31 DECEMBER 2011

                                                      31            31
                                                December      December
                                       Note         2011          2010
                                              -----------   -----------
Continuing operations                               GBP           GBP

Revenue                                   4   10,060,035     8,282,327

Cost of sales                                   (466,219)     (362,361)
                                              -----------   -----------

Gross profit                                   9,593,816     7,919,966

Other income                              5      118,450        67,582

Other operating expenses                  6   (3,604,550)   (3,049,001)

Expenses
- Administrative expenses                       (692,403)     (601,387)
- Finance expenses                        7   (2,191,412)   (1,548,472)
                                              -----------   -----------

Profit before taxation                         3,223,901     2,788,688

Taxation                                        (521,921)     (531,147)
                                              -----------   -----------

Profit from continuing operations for
 the year                                      2,701,980     2,257,541

Other comprehensive income
Currency translation differences
 arising on consolidation                      1,431,818      (874,418)
                                              -----------   -----------
Other comprehensive income for the
 year, (net of tax)                            1,431,818      (874,418)
                                              -----------   -----------

Total comprehensive income                     4,133,798     1,383,123
                                              -----------   -----------

Profit attributable to:
Equity holders of the parent                   2,057,004     1,584,826
Non-controlling interest                         644,976       672,715
                                              -----------   -----------
                                               2,701,980     2,257,541
                                              -----------   -----------

Total comprehensive income attributable
 to:
Equity holders of the parent                   2,967,931     1,033,096
Non-controlling interest                       1,165,867       350,027
                                              -----------   -----------
                                               4,133,798     1,383,123
                                              -----------   -----------

Earnings per share
- Basic - continuing and total
 operations                                   5.29 pence    5.86 pence
                                              -----------   -----------
- Fully Diluted - continuing and total
 operations                                   5.29 pence    5.69 pence
                                              -----------   -----------


AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
CONSOLIDATED BALANCE SHEET (UNAUDITED)
AS AT 31 DECEMBER 2011
                                               31 December           30 June
                                    Note              2011              2011
                                             -------------   ---------------
                                                      GBP               GBP
ASSETS
------

Current assets:
Cash and cash equivalents                        8,660,473         5,626,771
Trade and other receivables                      9,995,343         7,542,395
Inventories                                          2,794             1,946
Total current assets                            18,658,610        13,171,112
                                           ---------------   ---------------

Non-current assets:
Property, plant and equipment          8       130,768,559        84,896,190
Goodwill                                         1,324,541         1,324,541
                                           ---------------   ---------------
Total non-current assets                       132,093,100        86,220,731
                                           ---------------   ---------------

Total assets                                   150,751,710        99,391,843
                                           ---------------   ---------------

LIABILITIES AND EQUITY
----------------------

Current liabilities:
Trade and other payables                         3,126,974         3,331,862
Provision for taxation                             559,969            38,748
Loans and borrowings                            15,287,103         9,865,455
Short-term provisions                            3,458,322         2,849,839
                                           ---------------   ---------------
Total current liabilities                       22,432,368        16,085,904
                                           ---------------   ---------------

Non-current liabilities:
Trade and other payables                         2,376,664           942,009
Loans and borrowings                            65,749,571        28,091,394
Deferred tax liabilities                         4,997,096         4,811,938
                                           ---------------   ---------------
Total non-current liabilities                   73,123,331        33,845,341
                                           ---------------   ---------------

Equity attributable to shareholders:
Share capital                          9           407,267           386,072
Share premium                                   12,550,424        10,543,750
Assets revaluation reserve                       7,436,517         7,436,517
Capital redemption reserve                           7,000             7,000
Warrant reserve                                     55,393            74,381
Foreign currency translation reserve             3,299,656         2,388,729
Retained earnings                               16,540,064        14,890,326
                                           ---------------   ---------------
Parent interests                                40,296,321        35,726,775
Non-controlling interests                       14,899,690        13,733,823
                                           ---------------   ---------------
                                                55,196,011        49,460,598
                                           ---------------   ---------------

Total liabilities and equity                   150,751,710        99,391,843
                                           ---------------   ---------------

AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
FOR THE SIX MONTHS ENDED 31 DECEMBER 2011


                                                                            
                                               Assets    Capital            
                                             revalua-    Redemp-            
                       Share       Share         tion       tion    Warrant 
                     capital     premium      reserve    reserve    reserve 
                 -----------------------------------------------------------
                        GBP         GBP          GBP        GBP        GBP  
Group                                                                       
Balance at 1                                                                
 July 2011           386,072  10,543,750    7,436,517      7,000     74,381 
                                                                            
                 -----------------------------------------------------------
Profit for the                                                              
 year                      -           -            -          -          - 
Other                                                                       
 comprehensive                                                              
 income                    -           -            -          -          - 
                 -----------------------------------------------------------
Total                                                                       
 comprehensive                                                              
 income                    -           -            -          -          - 
                                                                            
Dividend related                                                            
 to 2011 paid              -           -            -          -          - 
                                                                            
Increase of                                                                 
 issued share                                                               
 capital              21,195   2,128,748            -          -    (18,988)
                                                                            
Share issue                                                                 
 expenses                  -    (122,074)           -          -          - 
                                                                            
                 -----------------------------------------------------------
Balance at 31                                                               
 December 2011       407,267  12,550,424    7,436,517      7,000     55,393 
                 -----------------------------------------------------------
                                                                            
Balance at 1                                                                
 July 2010           262,190   1,249,258    6,760,372      7,000          - 
                                                                            
                 -----------------------------------------------------------
Profit for the                                                              
 year                      -           -            -          -          - 
Other                                                                       
 comprehensive                                                              
 income                    -           -            -          -          - 
                 -----------------------------------------------------------
Total                                                                       
 comprehensive                                                              
 income                    -           -            -          -          - 
                                                                            
Dividend related                                                            
 to 2010 paid              -           -            -          -          - 
                                                                            
Increase in                                                                 
 issued share                                                               
 capital              23,132      76,868            -          -          - 
                                                                            
                 -----------------------------------------------------------
Balance at 31                                                               
 December 2010       285,322   1,326,126    6,760,372      7,000          - 
                 -----------------------------------------------------------
                                                                            
                                                                                                  
                                                                           
                   Foreign                                                 
                  currency                                Non-             
                  transla-                            Control-             
                      tion    Retained                    ling       Total 
                   reserve    earnings       Total    Interest      Equity 
                -----------------------------------------------------------
                      GBP         GBP         GBP         GBP         GBP  
Group                                                                      
Balance at 1                                                               
 July 2011       2,388,729  14,890,326  35,726,775  13,733,823  49,460,598 
                                                                           
                -----------------------------------------------------------
Profit for the                                                             
 year                    -   2,057,004   2,057,004     644,976   2,701,980 
Other                                                                      
 comprehensive                                                             
 income            910,927           -     910,927     520,891   1,431,818 
                -----------------------------------------------------------
Total                                                                      
 comprehensive                                                             
 income            910,927   2,057,004   2,967,931   1,165,867   4,133,798 
                                                                           
Dividend related                                                           
 to 2011 paid            -    (407,266)   (407,266)          -    (407,266)
                                                                           
Increase of                                                                
 issued share                                                              
 capital                 -           -   2,130,955           -   2,130,955 
                                                                           
Share issue                                                                
 expenses                -           -    (122,074)          -    (122,074)
                                                                           
                -----------------------------------------------------------
Balance at 31                                                              
 December 2011   3,299,656  16,540,064  40,296,321  14,899,690  55,196,011 
                -----------------------------------------------------------
                                                                           
Balance at 1                                                               
 July 2010       3,563,359  11,434,226  23,276,405  12,755,521  36,031,926 
                                                                           
                -----------------------------------------------------------
Profit for the                                                             
 year                    -   1,584,826   1,584,826     672,715   2,257,541 
Other                                                                      
 comprehensive                                                             
 income           (551,730)          -    (551,730)   (322,688)   (874,418)
                -----------------------------------------------------------
Total                                                                      
 comprehensive                                                             
 income           (551,730)  1,584,826   1,033,096     350,027   1,383,123 
                                                                           
Dividend related                                                           
 to 2010 paid            -    (171,193)   (171,193)          -    (171,193)
                                                                           
Increase in                                                                
 issued share                                                              
 capital                 -           -     100,000           -     100,000 
                                                                           
                -----------------------------------------------------------
Balance at 31                                                              
 December 2010   3,011,629  12,847,859  24,238,308  13,105,548  37,343,856 
                -----------------------------------------------------------



AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED 31 DECEMBER 2011

                                               31 December      31 December
                                                      2011             2010
                                             --------------   --------------
                                                      GBP              GBP
Cash flows from operating activities:
Profit before taxation                           3,223,901        2,788,688
Adjustments for:
  Depreciation expense                           2,950,475        2,387,116
  Claim on maintenance reserve                     691,670          661,885
  Interest expense                               2,191,412        1,468,697
  Interest income                                   (1,086)          (1,242)
                                             --------------   --------------
Operating profit before working capital
 changes                                         9,056,372        7,305,144

Movement in working capital:
  Trade and other receivables                   (2,452,948)        (136,631)
  Inventories                                         (848)            (402)
  Trade and other payables                         822,501         (222,372)
  Short-term provisions                            (83,187)        (137,248)
                                             --------------   --------------
Cash from operations                             7,341,890        6,808,491

Interest paid                                   (1,852,061)      (1,468,697)
Interest received                                    1,086            1,242
Corporation tax paid                              (260,229)         (96,776)
                                             --------------   --------------
Net cash from operating activities               5,230,686        5,244,260
                                             --------------   --------------

Cash flows used in investing activities:
  Purchase of property, plant and equipment    (44,650,840)         (17,504)
                                             --------------   --------------
Net cash used in investing activities          (44,650,840)         (17,504)
                                             --------------   --------------

Cash flows from financing activities:
  Net proceeds from issuance of ordinary
   shares                                        2,008,881          100,000
  Dividends paid                                         -         (171,193)
  Proceeds from borrowings                      45,408,208        1,278,100
  Repayment of borrowings                       (4,214,372)      (4,028,934)
  Capital element of finance lease repayments     (927,906)        (665,090)
                                             --------------   --------------
Net cash used in financing activities           42,274,811       (3,487,117)
                                             --------------   --------------

Effects of exchange rates on cash & cash
 equivalents                                       179,045           86,883
                                             --------------   --------------

Net increase in cash and cash equivalents        3,033,702        1,826,522
Cash and cash equivalents at beginning of
 financial period                                5,626,771        1,227,881
                                             --------------   --------------
Cash and cash equivalents at end of financial
 period                                          8,660,473        3,054,403
                                             --------------   --------------



AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO THE FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED 31 DECEMBER 2011


The Interim Report for Avation PLC for the six months ended 31 December 2011 was approved by the Directors on 23
February 2012.

1 CORPORATE INFORMATION

Avation PLC (the Company) is a public limited company incorporated and domiciled in England and Wales under the
Companies Act 2006 (Registration Number 05872328).

The principal activities of the Company and its subsidiaries are the holding of investments involved in owning, leasing
aircraft and trading of broadcasting equipment and procurement business. The Company also owns and leases aircraft in
its own right. During the six month period ended 31 December 2011, the Group has commenced leasing aircraft to Skywest
Airlines (Australia) Pty Ltd and Virgin Blue Airlines Pty Ltd pursuant to an agreement signed with Skywest Airlines
(Australia) Pty Ltd and Virgin blue Airlines Pty Ltd on 10 January 2011.

2 BASIS OF PREPARATION AND ACCOUNTING POLICIES

This Interim Report has been prepared in accordance with the Disclosure and Transparency Rules (DTR) of the Financial
Services Authority and in accordance with International Accounting Standard (IAS) 34 'Interim Reporting'.

The Interim Report does not include all the notes of the type normally included within the annual report and therefore
cannot be expected to provide as full an understanding of the financial performance, financial position and financial
and investing activities of the consolidated entity as the full financial report.

It is recommended that the Interim Report be read in conjunction with the annual report for the year ended 30 June 2011
and considered together with any public announcements made by Avation PLC during the six months ended 31 December 2011.

The accounting policies and methods of computation are the same as those adopted in the annual report for the year ended
30 June 2011.

The preparation of the Interim Report requires management to make estimates and assumptions that affect the reported
income and expense, assets and liabilities and disclosure of contingencies at the date of the interim Report, actual
results may differ from these estimates.

The statutory financial statements of Avation PLC for the year ended 30 June 2011, which carried an unqualified audit
report, have been delivered to the Registrar of Companies and did not contain section 498 of the Companies Act 2006.

The Interim Report is unaudited and not reviewed by the auditors.

The Interim Report does not constitute statutory financial statements within the meaning of section 434 of the Companies
Act 2006.

3 SEGMENT INFORMATION

a) Segment reporting policy

A segment is a distinguishable component of the Group within a particular economic environment (geographical segment)
and to a particular industry (business segment) which is subject to risks and rewards that are different from those of
other segments.

The primary format, business segments, is based on the Group's management and internal reporting structure. In
presenting information on the basis of business segments, segment revenue and segment assets are based on the nature of
the products or services provided by the Group, information for geographical segments is based on the geographical areas
where the customers are located.

Inter-segment pricing is determined on an arm's length basis. Segment results, assets and liabilities include items
directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items
comprise mainly of corporate assets and liabilities or profit or losses items that are not directly attributable to a
segment or those that cannot be allocated on a reasonable basis. Common expenses were allocated based on revenue from
the Group.

Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are expected to
be used for more than one year.

b) Primary reporting segment - business segments

During the six months ended 31 December 2011, the Group was organised into two main business segments which are aircraft
leasing and business procurement.

 Other operations of the Group mainly comprise investment holding which does not constitute a separate reportable
segment. There are no inter-segment transactions recorded during the financial period.


                                        Aircraft      Business
31 December 2011                         leasing   procurement        Total
----------------                      ----------   -----------   -----------
                                            GBP           GBP          GBP
Revenue & other income
  - External sales                    12,268,854       592,548   12,861,402
  - Other income                                                    224,787
                                                                 -----------
Total of all segments                                            13,086,189
Less: elimination                                                (2,907,704)
                                                                 -----------
Consolidated revenue & other income                              10,178,485
                                                                 -----------


                                           Aircraft    Business
31 December 2011                            leasing procurement       Total
----------------                        ----------- ----------- ------------
                                               GBP         GBP         GBP

Results
Segment results                           5,422,303      (8,076)  5,414,227
Finance income                                                        1,086
Finance expense                                                  (2,191,412)
Unallocated corporate expenses                                            -
Profit before taxation                                            3,223,901
Taxation                                                           (521,921)
Profit after taxation                                             2,701,980

Other segment items
Capital expenditure & valuation
 movement
- property, plant and equipment          44,650,238         602   4,465,840
Depreciation                              2,949,496         979   2,950,475

                                          Aircraft     Business
31 December 2011                           leasing  procurement        Total
----------------                       -----------  -----------  -----------
                                              GBP          GBP          GBP

Segment assets                         149,283,523      143,646  149,427,169
Unallocated assets                                                         -
                                                                 -----------
Consolidated total assets                                        149,427,169
                                                                 -----------

Segment liabilities
Trade and other payables                 5,381,098      122,540    5,503,638
Provisions of taxation                     559,969            -      559,969
Short term provisions                    3,458,322            -    3,458,322
Loans and borrowings                    81,036,674            -   81,036,674
Deferred tax liabilities                 4,997,096            -    4,997,096
Unallocated liabilities                                                    -
                                                                 -----------
Consolidated total liabilities                                    95,555,699
                                                                 -----------

                                          Aircraft     Business
31 December 2010                           leasing  procurement       Total
----------------                       -----------  -----------  ----------
                                              GBP          GBP         GBP
Revenue & other income
  - External sales                       8,586,668      424,176   9,010,844
  - Other income                                                     69,931
                                                                 -----------
Total of all segments                                             9,080,775
Less: elimination                                                  (730,866)
                                                                 -----------
Consolidated revenue & other income                               8,349,909
                                                                 -----------

                                        Aircraft     Business
31 December 2010                         leasing  procurement         Total
----------------                     -----------  ------------  ------------
                                            GBP          GBP           GBP

Results
Segment results                        4,349,853      (13,935)    4.335,918
Finance income                                                        1,242
Finance expense                                                  (1,548,472)
Unallocated corporate expenses                                            -
                                                                ------------
Profit before taxation                                            2,788,688
Taxation                                                           (531,147)
                                                                ------------
Profit after taxation                                             2,257,541
                                                                ------------
                                        Aircraft      Business
30 June 2011                             Leasing   procurement         Total
------------                        ------------  ------------  ------------
                                            GBP           GBP           GBP

Segment assets                        97,440,829       626,473    98,067,302
Unallocated assets                                                         -
                                                                ------------
Consolidated total assets                                         98,067,302
                                                                ------------

Segment liabilities
Trade and other payables               3,653,046       620,825     4,273,871
Provisions of taxation                    38,748             -        38,748
Short term provisions                  2,848,399             -     2,849,839
Loans and borrowings                  37,956,849             -    37,956,849
Deferred tax liabilities               4,811,938             -     4,811,938
Unallocated liabilities                                                    -
                                                                ------------
Consolidated total liabilities                                    49,931,245
                                                                ------------


c) Second reporting segment - geographical segments

 The following table provides an analysis of the revenues by geographical market, irrespective of the origin of the
goods:



                                                   31 December   31 December
                                                          2011          2010
                                                  ------------  ------------
Revenue                                                   GBP           GBP
-------

Australia                                            5,990,376     4,671,720
Denmark                                              2,826,900     2,875,725
United States                                          697,302       709,346
Others                                                 545,457        25,536
                                                  ------------  ------------
                                                    10,060,035     8,282,327
                                                  ------------  ------------

                                                                    Net Book
                                                         Total         Value
                                                        assets      Aircraft
                                                  ------------  ------------
31 December 2011                                          GBP           GBP
----------------

Australia                                           82,995,750    79,967,236
Denmark                                             43,744,626    43,744,626
Singapore                                           11,015,748             -
United States                                        7,057,596     7,057,596
United Kingdom                                       4,088,459             -
Malta                                                  516,224             -
Others                                                   8,766             -
                                                  ------------  ------------
                                                   149,427,169   130,762,459
                                                  ------------  ------------

                                                                    Net Book
                                                         Total         Value
                                                        assets      Aircraft
                                                  ------------  ------------
30 June 2011                                              GBP           GBP
------------

Denmark                                             42,619,016    42,619,016
Australia                                           35,628,465    35,197,379
United Kingdom                                       9,949,037             -
United States                                        7,074,476     7,074,476
Malta                                                  925,606             -
Others                                               1,870,702             -
                                                  ------------  ------------
                                                    98,067,302    84,890,871
                                                  ------------  ------------


4 REVENUE

                                                   31 December   31 December
                                                          2011          2010
                                                  ------------  ------------
                                                          GBP           GBP

Rental income                                        8,604,687     7,149,482
Maintenance rent revenue                               702,975       708,669
Management and service income                          180,069        45,755
Sales of finished goods                                572,304       378,421
                                                  ------------  ------------
                                                    10,060,035     8,282,327
                                                  ------------  ------------


5 OTHER INCOME

                                                   31 December   31 December
                                                          2011          2010
                                                  ------------  ------------
                                                          GBP           GBP

Interest income                                          1,086         1,242
Foreign currency exchange adjustment gain              117,302        66,340
Other income                                                62             -
                                                  ------------  ------------
                                                       118,450        67,582
                                                  ------------  ------------



6 OTHER OPERATING EXPENSES

                                                   31 December   31 December
                                                          2011          2010
                                                  ------------  ------------
                                                          GBP           GBP
Claim on maintenance reserve expense                   654,075       661,885
Depreciation of property, plant and equipment        2,950,475     2,387,116
                                                  ------------  ------------
                                                     3,604,550     3,049,001
                                                  ------------  ------------


7 FINANCE EXPENSES

                                                   31 December   31 December
                                                          2011          2010
                                                  ------------  ------------
                                                          GBP           GBP

Interest expense on secured borrowings               2,191,412     1,468,697
Guarantee and commitment fee                                 -        79,775
                                                  ------------  ------------
                                                     2,191,412     1,548,472
                                                  ------------  ------------


8 PROPERTY, PLANT AND EQUIPMENT

                                       Furniture
                                             and
                                       equipment      Aircraft         Total
                                    ------------  ------------  ------------
31 December 2011                            GBP           GBP           GBP
----------------
Cost or valuation:
 At 1 July 2011                            7,539    98,053,543    98,061,082
 Additions                                 1,776    44,649,064    44,650,840
 Currency realignment                        293     4,726,301     4,726,594
                                    ------------  ------------  ------------
 At 31 December 2011                       9,608   147,428,907   147,348,515
                                    ------------  ------------  ------------

Representing:
Cost                                       9,608    44,649,064    44,658,672
Valuation                                      -   102,779,843   102,779,843
                                    ------------  ------------  ------------
                                           9,608   147,428,907   147,438,515
                                    ------------  ------------  ------------

Accumulated depreciation:
 At 1 July 2011                            2,220    13,186,967    13,189,187
 Depreciation for the period               1,173     2,949,302     2,950,475
 Currency realignment                        115       530,179       530,294
                                    ------------  ------------  ------------
 At 31 December 2011                       3,508    16,666,448    16,669,956
                                    ------------  ------------  ------------

Net book value:
 At 1 July 2011                            5,319    84,866,576    92,520,577
                                    ------------  ------------  ------------
 At 31 December 2011                       6,100   130,762,459   130,768,559
                                    ------------  ------------  ------------

                                      Furniture
                                            and
                                      equipment      Aircraft         Total
                                    ------------  ------------  ------------
30 June 2011                               GBP           GBP           GBP
------------
Cost or valuation:
 At 1 July 2010                             995   101,640,622   101,641,617
 Additions                                6,652       913,768       920,420
 Revaluation surplus                          -    1,112,985-     1,112,985
 Currency realignment                      (108)   (5,613,934)   (5,613,942)
                                    ------------  ------------  ------------
 At 30 June 2011                          7,539    98,053,541    98,061,080
                                    ------------  ------------  ------------

Representing:
Cost                                      7,539             -         7,539
Valuation                                     -    98,053,541    98,053,541
                                    ------------  ------------  ------------
                                          7,539    98,053,541    98,061,080
                                    ------------  ------------  ------------

Accumulated depreciation:
 At 1 July 2010                             995     9,120,044     9,121,039
 Depreciation for the year                1,295     4,964,158     4,964,453
 Increase in revaluation                      -      (229,056)     (229,056)
 Currency realignment                       (70)     (691,476)     (691,546)
                                    ------------  ------------  ------------
 At 30 June 2011                          2,220    13,162,670    13,164,890
                                    ------------  ------------  ------------

Net book value:
 At 1 July 2010                               -    92,520,577    92,520,577
                                    ------------  ------------  ------------
 At 30 June 2011                          5,319    84,890,871    84,896,190
                                    ------------  ------------  ------------


9 SHARE CAPITAL


                                                   31 December       30 June
                                                          2011          2011
                                                  ------------  ------------
                                                          GBP           GBP
Allotted, called up and fully paid:
40,726,682 (30 June 2011: 38,607,220) ordinary
 shares of 1 penny each                                407,267       386,072
                                                  ------------  ------------

    On 9 December 2011, the Company issued 1,818,182 ordinary shares of 1
    penny each following a private placement exercise for GBP 2,000,000.

    On 13 December 2011, the Company issued 301,280 ordinary shares of 1
    penny each following the exercise of warrants by warrant holders for GBP
    130,954.


10 DIVIDENDS PAID

                                                   31 December   31 December
                                                          2011          2010
                                                  ------------  ------------
                                                          GBP           GBP

Dividend declared/paid during the 6 months ended
 31 December:

Final dividend of 1p (2010: 0.6p)                      407,266       171,193
                                                  ------------  ------------


    No dividends have been declared subsequent to 31 December 2011.

11 CONTINGENT LIABILITIES

     There were no material changes in contingent liabilities since 30 June
      2011.

12. TRANSACTIONS WITH RELATED PARTIES

    Significant related party transactions:

                                                   31 December   31 December
                                                          2011          2010
                                                  ------------  ------------
                                                          GBP           GBP


Sales of goods to a related party(1)                   125,639       306,428
Sales of goods to a related party(2)                     2,300             -
Services rendered to a related party(1)                 20,244        43,344
Maintenance rent received from a related party(1)      702,975       708,669
Rental income received from a related party(1)       4,971,086     3,569,349
Rental income received from a related party3           109,398             -
Service fee paid to a related party(4)                  10,939             -
Arrangement fee paid to a related party(5)              32,355             -
Service fee paid to a related party(6)                  61,260             -
Service fee paid to a related party(7)                  10,164             -
Service fee paid to a related party(8)                  10,000             -
Service fee paid to a related party(9)                  11,412             -
Service fee paid to a related party(10)                  2,033             -
Expenses rebilled from a related party(10)              17,613             -
Interest expense paid to a related party(5)              6,675             -
Interest expense paid to a related party(11)             2,821             -
Guarantee and commitment fee paid to a related
 party11                                                     -        79,775
                                                  ------------  ------------



1.   Received from Skywest Airlines (Australia) Pty Ltd in which a director
     of the Company is also a director of Skywest Airlines (Australia) Pty
     Ltd.
2.   Received from Skywest Airlines (S) Pte Ltd in which a director of the
     subsidiary is also a director of Skywest Airlines (S) Pte Ltd.
3.   Received from F11305 Pte Ltd in which a director of the Company is also
     a director of F11305 Pte Ltd.
4.   Paid to Loeb Aron & Company Ltd in which a director of a subsidiary is
     also a former director of Loeb Aron & Company.
5.   Paid to Fleet Solution Consulting Pte Ltd in which a director of a
     subsidiary is also a director of Fleet Solution Consulting Pte Ltd.
6.   Paid to Takeoff Services Pte Ltd in which a director of the Company is
     also a director of Takeoff Services Pte Ltd.
7.   Paid to Giant Mix Investment Ltd in which a director of the Company is
     also a director of Giant Mix Investment Ltd.
8.   Paid to Epsom Assets Limited in which a director of the Company is also
     a director of Epsom Assets Limited.
9.   Paid to Sinclair Management in which a director of the subsidiary is
     the sole proprietor of Sinclair Management.
10.  Paid to Skywest Airlines (S) Pte Ltd in which a director of the
     subsidiary is also a director of Skywest Airlines (S) Pte Ltd.
11.  Paid to CaptiveVision Capital Ltd in which a director of the Company is
     a director of CaptiveVision Capital Ltd.

The nature and contractual terms of key management compensation and inter-
company transactions during the period are consistent with the disclosures
in the Annual Report for the year ended 30 June 2011.



13 EVENTS AFTER THE BALANCE SHEET DATE

Subsequent to the balance sheet date, the followings occurred:


    a)  The Group has entered into an agreement to acquire an additional two new
        ATR72-500 aircraft. These aircraft will be leased to Australian carrier
        Skywest Airlines, which will operate the aircraft on behalf of Virgin
        Australia, pursuant to a 10-year wet-lease contract.

    b)  The Company has agreed to acquire 10,662,112 ordinary shares in aircraft
        lessor Capital Lease Aviation PLC ("CLA"), increasing its holding in
        CLA's issued share capital from 51.8% to 62.07%. The consideration for
        the acquisition of the CLA shares is the allotment of 1,647,781 new
        ordinary shares in the Company, representing 4.05% of the existing
        issued share capital of the Company.


PRINCIPAL RISKS

The Group's risk management processes bring greater judgement to decision making as they allow management to make
better, more informed and more consistent decisions based on a clear understanding of risks involved. We regularly
review the risk assessment and monitoring process as part of our commitment to continually improve the quality of
decision-making across the Group.

The Group's principal risks and uncertainties are consistent with those set put in the Prospectus submitted to the
London Stock Exchange.

The principal risks and uncertainties which may affect the Group in the second half of the financial year will include
the typical risks associated with the aviation business, including but not limited to any downturn in the global
aviation industry, fuel costs, finance costs, war and terrorism and the like which may affect our airline customers'
ability to fulfil their lease obligations.

The business also relies on its ability to source for finance on favourable terms. Should this supply of finance
contract, it would limit our fleet expansion and therefore growth.

GOING CONCERNS

After making enquiries, the directors have a reasonable expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. For this reason they continue to adopt the going concern basis in
preparing the financial statements. The financial risk management objectives and policies of the Group and the exposure
of the Group to credit risk and liquidity risk are discussed in the annual report for the Group for the year ended 30
June 2011.

DIRECTORS

The directors of Avation PLC are listed in its Annual Report for the year ended 30 June 2011. A list of the current
directors is maintained on the Avation PLC website: www.avation.net.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors confirm that, to the best of their knowledge, this condensed consolidated interim financial information
have been prepared in accordance with IAS 34 as adopted by the European Union and that the interim management report
herein includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8 namely


     -  an indication of important events that have occurred during the first
        six months and their impact on the Interim Report, and a description
        required by the principal risks and uncertainties for the remaining six
        months of the financial year; and

     -  material related party transactions in the first six months and any
        material changes in the related party transactions described in the last
        annual report.

By order of the Board

Jeff Chatfield
Chairman

23 February 2012

Contact Information

  • Avation plc