Avation plc
LSE : AVAP

Avation plc

February 11, 2013 05:01 ET

Half Yearly Report

                                            AVATION PLC (the "Company")
                                                         
                                                 FINANCIAL RESULTS
                                     FOR THE SIX MONTHS ENDED 31 DECEMBER 2012
                                           and Interim Management Report
                                                         
                                                         

Avation  PLC  (LSE:  AVAP)  the  commercial passenger aircraft leasing company is  pleased  to  announce  unaudited
financial statements for the Company and its subsidiaries for the six-month period ended 31st December 2012.

The financial highlights are:

    *   Consolidated net profit after tax attributable to shareholders of Avation PLC increased  by  38.7%  to
        £2,853,844;
    *   Revenues increased by 26.4% to £12,713,862;
    *   Earnings per share of 6.44 pence were recorded representing an increase of 21.7%;
    *   Increased number of aircraft in the fleet from 15 to 19 with a value of £174 Million;
    *   Fulfilled the delivery of the initial ten ATR72 aircraft into the Australian Regional Airline  Network
        Alliance ("ARAN");
    *   Placed a firm order for seven additional ATR72 for delivery in 2014;
    *   Secured commercial funding for the five ATR72 aircraft scheduled for delivery in 2013;
    


Commenting today, Avation PLC Chairman, Jeff Chatfield said:

"The  Board of Directors are pleased with the development of the Avation business, in particular the core  aircraft
delivery program of 22 ATR72 aircraft for firm delivery in 2013 and 2014, and remains committed to the build-out of
the ARAN Alliance and other identified fleet opportunities in the Australian and Asian regions.

The  business  continues to perform strongly, providing consistent and defined IRR's, cash yields  and  predictable
capital  returns  from  aircraft  investments. Looking forward, we are confident that  our  business  provides  for
continued and sustainable growth in 2013 and beyond."

Further information on Avation PLC can be seen at: www.avation.net.  Avation PLC is registered in England and Wales
with its Operational Headquarters in Singapore.



Enquiries:

Avation PLC                                       
Jeff Chatfield, Chairman                          +44 7783 942 553
                                                  
                                                  
                                                  
Cadogan PR                                        
Alex Walters                                      +44 20 7839 9260
                                                  +44 (0) 7771 713 608


Statement by the Chairman, Jeff Chatfield:

Dear Fellow Shareholder,
        
Introduction
------------
Your  Board  is  pleased to report that during the six month period ended 31st December 2012 the  consolidated  net
profit  after tax moved ahead to £2,853,844 on increased revenues of £12,713,862 with earnings per share rising  to
6.44  pence.  Returns  principally comprise cash yield (income) from aircraft lease  payments  after  repayment  of
associated debt obligations.

The  ARAN  Alliance continues to provide a solid operating platform for the continued asset and earnings growth  of
the Avation business.

The  revenue growth increase to £12,713,862 is consistent with the expectations of 30th June 2012 and a  result  of
the  build-out and significant investment in the ATR72 fleet. With the recent announcement of further additions  to
this fleet, lease revenues are expected to grow by an additional  £2.3 million in the six months to 30th June 2013.

As  at  31st  December  2012,  total  assets  increased by £46,646,007 to £204,777,910.  Corresponding  liabilities
increased by £43,173,407 to £148,784,254 resulting in a net asset increase of 6.6% to £55,993,656.

The  Company has at this time secured committed funding of some US$82 million covering senior debt requirements for
the five ATR72 deliveries for 2013.


Fleet Development
-----------------
The  Company's aircraft fleet currently comprises nineteen aircraft which are 100% utilised and generate  a  rental
yield  of 14.6% from a current customer base of airlines in Australia, Europe and North America (based on the  last
full year).

The  fleet is comprised of a diverse range of commercial passenger aircraft, with new ATR72 aircraft, Airbus A320s,
Airbus  A321s  and Fokker 100s. In addition to leasing these aircraft, Avation provides active fleet and  financial
management to ensure the retention of asset values and the maximisation of earnings.

The  ATR72  fleet related to the ARAN Alliance now stands at ten delivered, with five additional aircraft scheduled
for  delivery in 2013 and a further four aircraft scheduled for 2014. The Company has secured a potential  pipeline
of a total of 30 additional aircraft, meaning it is well placed to maintain a high level of growth in the future.

Funding
-------
As  stated above, the Company has at this time secured committed debt funding for the ATR72 deliveries for 2013 and
it  is  well  positioned to obtain access to the necessary debt for the purchase of further aircraft for  2014  and
beyond.  Access  to  funding  nevertheless remains a risk, which is common  to  all  businesses  that  are  capital
intensive.  Specific  aviation  based industry risks are also present and include the  creditworthiness  of  client
airlines.

Dividend
--------
As  announced at the Annual General Meeting held on 4 December 2012 the company will pay a final dividend  of  1.05
pence per share on 22nd February 2013.

Outlook
-------
The  Board of Directors is strongly committed to developing the Avation business further and confident that it  can
achieve  continued  and  sustainable growth in 2013 and beyond. Looking forward, the Directors  anticipate  further
increases in lease revenues if, as and when additional aircraft are delivered.



Jeff Chatfield,
Chairman
Singapore,
11th February 2013


AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
FOR THE SIX MONTHS ENDED 31 DECEMBER 2012

                                                                                     31 December        31 December
                                                                         Note               2012               2011
                                                                                     -------------      -------------
Continuing operations                                                                          £                  £
                                                                                                                   
Revenue                                                                   4           12,713,862         10,060,035
                                                                                                    
Cost of sales                                                                           (245,287)          (466,219)
                                                                                     -------------      -------------
Gross profit                                                                          12,468,575          9,593,816
                                                                                                    
Other income                                                              5              773,589            118,450
                                                                                                    
Other operating expenses                                                  6           (4,655,994)        (3,604,550)
                                                                                                    
Expenses                                                                                            
- Administrative expenses                                                             (1,017,554)          (692,403)
- Finance expenses                                                        7           (3,610,726)        (2,191,412)
                                                                                     -------------      -------------
                                                                                     
Profit before taxation                                                                 3,957,890          3,223,901
                                                                                                    
Taxation                                                                                (616,423)          (521,921)
                                                                                     -------------      -------------
                                                                                     
Profit from continuing operations for the year                                         3,341,467          2,701,980
                                                                                                    
Other comprehensive income                                                                          
Currency translation differences arising on consolidation                             (1,295,172)         1,431,818
                                                                                     -------------      -------------
Other comprehensive income for the year, (net of tax)                                 (1,295,172)         1,431,818
                                                                                     -------------      -------------
                                                                                                    
Total comprehensive income                                                             2,046,295          4,133,798
                                                                                     -------------      -------------
                                                                                     -------------      -------------
                                                                                                    
Profit attributable to:                                                                             
Equity holders of the parent                                                           2,853,844          2,057,004
Non-controlling interest                                                                 487,623            644,976
                                                                                     -------------      -------------
                                                                                       3,341,467          2,701,980
                                                                                     -------------      -------------
                                                                                     -------------      -------------
                                                                                                    
Total comprehensive income attributable to:                                                         
Equity holders of the parent                                                           1,909,566          2,967,931
Non-controlling interest                                                                 136,729          1,165,867
                                                                                     -------------      -------------
                                                                                       2,046,295          4,133,798
                                                                                     -------------      -------------
                                                                                     -------------      -------------

Earnings per share                                                                                                 
- Basic - continuing and total operations                                             6.44 pence         5.29 pence
                                                                                     -------------      -------------
                                                                                     -------------      -------------
- Fully Diluted - continuing and total operations                                     6.44 pence         5.29 pence
                                                                                     -------------      -------------
                                                                                     -------------      -------------

AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
CONSOLIDATED BALANCE SHEET (UNAUDITED)
AS AT 31 DECEMBER 2012

                                                                                      31 December             30 June
                                                                           Note              2012                2012
                                                                           ----      -------------      -------------
                                                                                                £                   £
ASSETS                                                                                                               
------                                                                                                               

Current assets:                                                                                                      
Cash and cash equivalents                                                              13,525,546           5,824,099
Trade and other receivables                                                             4,311,012           5,770,332
Prepayments                                                                               667,538             297,904
Inventories                                                                                            
                                                                                            2,181               9,168
                                                                                     -------------      -------------
Total current assets                                                                   18,506,277          11,901,503
                                                                                     -------------      -------------
Non-current assets:                                                                                    
Trade and other receivables                                                             4,690,872           5,403,585
Prepayments                                                                             5,560,627           2,452,619
Property, plant and equipment                                               8         174,695,593         137,049,655
Goodwill                                                                                1,324,541           1,324,541
                                                                                     -------------      -------------
Total non-current assets                                                              186,271,633         146,230,400
                                                                                     -------------      -------------

Total assets                                                                          204,777,910         158,131,903
                                                                                     -------------      -------------
                                                                                     -------------      -------------

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

Current liabilities:                                                                                   
Trade and other payables                                                                3,663,279           3,242,101
Deferred lease income                                                                      80,898              58,519
Provision for taxation                                                                    754,975             332,421
Loans and borrowings                                                                   14,694,753          12,522,177
Short-term provisions                                                                   2,090,623           1,901,456
                                                                                     -------------      -------------
Total current liabilities                                                              21,284,528          18,056,674
                                                                                     -------------      -------------
                                                                                                       
Non-current liabilities:                                                                               
Trade and other payables                                                                8,744,258           3,883,863
Deferred lease income                                                                     568,624             468,156
Loans and borrowings                                                                  114,356,266          79,402,426
Deferred tax liabilities                                                                3,830,578           3,799,728
                                                                                     -------------      -------------
Total non-current liabilities                                                         127,499,726          87,554,173
                                                                                     -------------      -------------
                                                                                                       
Equity attributable to shareholders:                                                                   
Share capital                                                               9             443,745             423,745
Share premium                                                                          16,062,928          14,192,267
Assets revaluation reserve                                                              5,465,206           5,465,206
Capital redemption reserve                                                                  7,000               7,000
Warrant reserve                                                                           120,779             120,779
Capital reserve                                                                         1,636,511           1,636,511
Foreign currency translation reserve                                                    1,571,156           2,515,434
Retained earnings                                                                      20,179,673          17,790,185
                                                                                     -------------      -------------
Parent interests                                                                       45,486,998          42,151,127
Non-controlling interests                                                              10,506,658          10,369,929
                                                                                     -------------      -------------
                                                                                       55,993,656          52,521,056
                                                                                     -------------      -------------
                                                                                                       
Total liabilities and equity                                                          204,777,910         158,131,903
                                                                                     -------------      -------------
                                                                                     -------------      -------------

AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
FOR THE SIX MONTHS ENDED 31 DECEMBER 2012

                                                                                                                                                                  
                                                                                                                    Foreign                                       
                                                                Assets        Captial                              currency                                        Non-              
                                      Share        Share   revaluation     Redemption    Warrant       Capital  translation      Retained                   Controlling         Total
                                    capital      premium       reserve        reserve    reserve       Reserve      reserve      earnings          Total       Interest        Equity
                                    -------------------------------------------------------------------------------------------------------------------------------------------------
                                          £            £             £              £          £             £            £             £              £              £             £
Group                                                                                                                                                                    
-----
Balance at 1 July 2012              423,745   14,192,267     5,465,206          7,000    120,779     1,636,511    2,515,434    17,790,185     42,151,127     10,369,929    52,521,056
                                                                                                                                                                         
                                    -------------------------------------------------------------------------------------------------------------------------------------------------
Profit for the year                       -            -             -              -          -             -            -     2,853,844      2,853,844        487,623     3,341,467
Other comprehensive income                -            -             -              -          -             -     (944,278)            -       (944,278)      (350,894)   (1,295,172)
                                    -------------------------------------------------------------------------------------------------------------------------------------------------
Total comprehensive income                -            -             -              -          -             -     (944,278)    2,853,844      1,909,566        136,729     2,046,295
                                                                                                                                                                         
Dividend related to 2012 paid             -            -             -              -          -             -            -      (464,356)      (464,356)             -      (464,356)
                                                                                                                                                                                     
Increase of issued share             
capital                              20,000    1,980,000             -              -          -             -            -             -      2,000,000              -     2,000,000
                                                                                                                                                                                     
Share issue expenses                      -     (109,339)            -              -          -             -            -             -       (109,339)             -      (109,339)
                                    -------------------------------------------------------------------------------------------------------------------------------------------------
Balance at 31 December 2012         443,745   16,062,928     5,465,206          7,000    120,779     1,636,511    1,571,156    20,179,673     45,486,998     10,506,658    55,993,656
                                    -------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                         
Balance at 1 July  2011             386,072   10,543,750     7,436,517          7,000     74,381             -    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                              21,195    2,128,748             -              -    (18,988)            -            -             -      2,130,955              -     2,130,955
                                                                                                                                                                                     
Share issue expenses                      -     (122,074)            -              -          -             -            -             -       (122,074)             -      (122,074)
                                                                                                                                                                         
                                    -------------------------------------------------------------------------------------------------------------------------------------------------
Balance at 31 December 2011         407,267   12,550,424     7,436,517          7,000     55,393             -    3,299,656    16,540,064     40,296,321     14,899,690    55,196,011
                                    -------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                     
.
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED 31 DECEMBER 2012


                                                                                    31 December             31 December
                                                                                           2012                    2011
                                                                                      ----------              ----------
                                                                                              £                       £
Cash flows from operating activities:                                                                                     
Profit before taxation                                                                3,957,890               3,223,901
Adjustments for:                                                                                           
    Depreciation expense                                                              3,466,920               2,950,475
    Claim on maintenance reserve                                                        869,992                 691,670
    Amortisation of loan premium                                                        229,569                       -
    Amortisation of deferred lease expense                                              122,260                       -
    Interest expense                                                                  3,258,897               2,191,412
    Interest income                                                                     (10,161)                 (1,086)
                                                                                      ----------              ----------
Operating profit before working capital changes                                      11,895,367               9,056,372
                                                                                                              
Movement in working capital:                                                                                  
    Trade and other receivables                                                      (1,657,438)             (2,452,948)
    Inventories                                                                           6,987                    (848)
    Trade and other payables                                                          5,163,630                 822,501
    Deferred lease income                                                               122,847                       -
    Short-term provisions                                                              (680,825)                (83,187)
                                                                                      ----------              ----------
Cash from operations                                                                 14,850,568               7,341,890
                                                                                                              
Interest paid                                                                        (3,140,954)             (1,852,061)
Interest received                                                                        10,161                   1,086
Corporation tax paid                                                                    (18,095)               (260,229)
                                                                                      ----------              ----------
Net cash from operating activities                                                   11,701,680               5,230,686
                                                                                      ----------              ----------
                                                                                                              
Cash flows used in investing activity:                                                                        
    Purchase of property, plant and equipment                                        (3,453,493)            (44,650,840)
                                                                                      ----------              ----------
Net cash used in investing activity                                                  (3,453,493)            (44,650,840)
                                                                                      ----------              ----------
                                                                                                              
Cash flows from financing activities:                                                                         
    Net proceeds from issuance of ordinary shares                                     1,890,661               2,008,881
    Proceeds from borrowings                                                          4,333,700              45,408,208
    Repayment of borrowings                                                          (6,525,739)             (4,214,372)
    Capital element of finance lease repayments                                      (1,168,204)               (927,906)
                                                                                      ----------              ----------
Net cash used in financing activities                                                (1,469,582)             42,274,811
                                                                                      ----------              ----------
                                                                                                                       
Effects of exchange rates on cash & cash equivalents                                    922,842                 179,045
                                                                                      ----------              ----------
                                                                                                              
Net increase in cash and cash equivalents                                             7,701,447               3,033,702
Cash and cash equivalents at beginning of financial period                            5,824,099               5,626,771
                                                                                      ----------              ----------
Cash and cash equivalents at end of financial period                                 13,525,546               8,660,473
                                                                                      ----------              ----------
                                                                                      ----------              ----------

AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO THE FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED 31 DECEMBER 2012




The  Interim Report for Avation PLC for the six months ended 31 December 2012 was approved by the Directors  on
11 February 2013.


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.
        
        
        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 2012 and considered together with any public announcements made by Avation  PLC  during
        the six months ended 31 December 2012.

        The  accounting policies and methods of computation are the same as those adopted in the annual  report
        for the year ended 30 June 2012.

        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 2012, 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 2012, 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                      
                                                               leasing     procurement                 Total
                                                               -------     -----------                 -----
       31 December 2012                                              £               £                     £
       ----------------
       Revenue & other income                                                                            
          - External sales                                  19,789,113         275,452            20,064,565
          - Other income                                                                             838,789
                                                                                                  -----------
       Total of all segments                                                                      20,903,354
       Less: elimination                                                                          (7,415,903)
                                                                                                  -----------
       Consolidated revenue & other income                                                        13,487,451
                                                                                                  -----------
                                                                                                  -----------


                                                              Aircraft        Business                      
                                                               leasing     procurement                 Total
                                                               -------     -----------                 -----
       31 December 2012                                              £               £                     £
       ----------------
       
       Results                                                                                                  
       Segment results                                       7,625,868         (67,413)            7,558,455
       Finance income                                                                                 10,161
       Finance expense                                                                            (3,610,726)
       Unallocated corporate expenses                                                                      -
                                                                                                  -----------
       Profit before taxation                                                                      3,957,890
       Taxation                                                                                     (616,423)
                                                                                                  -----------
       Profit after taxation                                                                       3,341,467
                                                                                                  -----------
                                                                                                  -----------
                                                                                                 
       Other segment items                                                                       
       Capital expenditure & valuation movement                                                  
       - property, plant and equipment                      45,463,146               -            45,463,146
       Depreciation                                          3,465,925             995             3,466,920
                                                                                                  -----------
                                                                                                  -----------


                                                              Aircraft        Business                      
                                                               leasing     procurement                 Total
                                                               -------     -----------                 -----
       31 December 2012                                              £               £                     £
       ----------------
       
       Segment assets                                      204,429,121         348,789           204,777,910
       Unallocated assets                                                                                  -
                                                                                                  -----------
       Consolidated total assets                                                                 204,777,910
                                                                                                  -----------
                                                                                                  -----------
                                                                                                 
       Segment liabilities                                                                       
       Trade and other payables                             12,022,073         385,464             12,407,537
       Deferred lease income                                   649,522                                649,522
       Provision of taxation                                   754,975               -                754,975
       Short term provisions                                 2,090,623               -              2,090,623
       Loans and borrowings                                129,051,019               -            129,051,019
       Deferred tax liabilities                              3,830,578               -              3,830,578
       Unallocated liabilities                                                                              -
                                                                                                  -----------
       Consolidated total liabilities                                                             148,784,254
                                                                                                  -----------
                                                                                                  -----------


                                                              Aircraft        Business                      
                                                               leasing     procurement                 Total
                                                               -------     -----------                 -----
       31 December 2011                                              £               £                     £
       ----------------
       
       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                      
                                                               leasing     procurement                 Total
                                                               -------     -----------                 -----
       31 December 2011                                              £               £                     £
       ----------------
      
       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            44,650,840
      Depreciation                                           2,949,496             979             2,950,475
                                                                                                  -----------
                                                                                                  -----------
                                                                                                  

                                                              Aircraft        Business                      
                                                               leasing     procurement                 Total
                                                               -------     -----------                 -----
      30 June 2012                                                   £               £                     £
      ------------
      
      Segment assets                                       157,335,380         796,523           158,131,903
      Unallocated assets                                                                                   -
                                                                                                 ------------
      Consolidated total assets                                                                  158,131,903
                                                                                                 ------------
                                                                                                 ------------
      Segment liabilities                                                                        
      Trade and other payables                               6,243,980         881,984              7,125,964
      Deferred lease income                                    526,675               -                526,675
      Provision of taxation                                    332,421               -                332,421
      Short term provisions                                  1,901,456               -              1,901,456
      Loans and borrowings                                  91,924,603               -             91,924,603
      Deferred tax liabilities                               3,799,728               -              3,799,728
      Unallocated liabilities                                                                               -
                                                                                                  -----------
      Consolidated total liabilities                                                              105,610,847
                                                                                                  -----------
                                                                                                  -----------

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
                                                                                   2012               2011
                                                                            ------------       ------------
         Revenue                                                                      £                  £
         -------                                                            
         
         Australia                                                            8,804,933          5,990,376
         Denmark                                                              2,826,135          2,826,900
         United States                                                          697,113            697,302
         Others                                                                 385,681            545,457
                                                                            ------------       ------------
                                                                             12,713,862         10,060,035
                                                                            ------------       ------------
                                                                            ------------       ------------
                                                                             

                                                                                   Total    Net Book Value
                                                                                  assets          Aircraft
                                                                            ------------       ------------
         31 December 2012                                                              £                 £
         ----------------                                                                        
         
         Australia                                                           131,678,702       130,067,998
         United States                                                         5,274,152         5,274,152
         Denmark                                                              39,349,126        39,349,126
         Malta                                                                   648,110                 -
         United Kingdom                                                       13,834,239                 -
         Others                                                               13,993,581                 -
                                                                            ------------       ------------
                                                                             204,777,910       174,691,276
                                                                            ------------       ------------
                                                                            ------------       ------------
                                                                             

                                                                                   Total    Net Book Value
                                                                                  assets          Aircraft
                                                                            ------------       ------------
         30 June 2012                                                                  £                 £
         ------------
         
         Australia                                                            90,946,768        89,698,256
         United States                                                         5,662,061         5,661,776
         Denmark                                                              41,684,917        41,684,917
         Malta                                                                   599,386                 -
         United Kingdom                                                       11,514,454                 -
         Others                                                                7,724,317                 -
                                                                            ------------       ------------
                                                                             158,131,903       137,044,949
                                                                            ------------       ------------
                                                                            ------------       ------------

4     REVENUE

                                                                        31 December          31 December
                                                                               2012                 2011
                                                                        ------------         ------------
                                                                                  £                    £

                                                                                              
       Rental income                                                     11,404,870            8,604,687
       Maintenance rent revenue                                             908,600              702,975
       Management and service income                                        132,428              180,069
       Sales of finished goods                                              267,964              572,304
                                                                        ------------         ------------
                                                                         12,713,862           10,060,035
                                                                        ------------         ------------
                                                                        ------------         ------------
                                                                                              


5       OTHER INCOME

                                                                        31 December          31 December
                                                                               2012                 2011
                                                                        ------------         ------------
                                                                                  £                    £

       Interest income                                                       10,161                1,086
       Foreign currency exchange adjustment gain                                  -              117,302
       Software licence repurchase by aircraft manufacturer                 681,010                    -
       Other income                                                          82,418                   62
                                                                        ------------         ------------
                                                                            773,589              118,450
                                                                        ------------         ------------
                                                                        ------------         ------------
                                                                                              

6       OTHER OPERATING EXPENSES

                                                                        31 December          31 December
                                                                               2012                 2011
                                                                        ------------         ------------
                                                                                  £                    £
                                                                                              
       Foreign currency exchange adjustment loss                            319,082                    -
       Claim on maintenance reserve expense                                 869,992              654,075
       Depreciation of property, plant and equipment                      3,466,920            2,950,475
                                                                        ------------         ------------
                                                                          4,655,994            3,604,550
                                                                        ------------         ------------
                                                                        ------------         ------------
                                                                                              

7       FINANCE EXPENSES

                                                                         31 December          31 December
                                                                                2012                 2011
                                                                        ------------         ------------
                                                                                   £                    £
                                                                                              
       Interest expense on secured borrowings                              3,258,897            2,191,412
       Amortisation of loan premium                                          229,569                    -
       Amortisation of deferred lease expense                                122,260                    -
                                                                        ------------         ------------
                                                                           3,610,726            2,191,412
                                                                        ------------         ------------
                                                                        ------------         ------------
                                                                                              

8     PROPERTY, PLANT AND EQUIPMENT

                                            Furniture and            
                                                equipment                   Aircraft                Total
                                             -------------              ------------          ------------
        31 December 2012                                £                          £                    £
        ----------------
        Cost or valuation:                                                                     
           At 1 July 2012                           9,521                155,872,270          155,881,791
           Additions                                1,248                 45,461,898           45,463,146
           Currency realignment                      (276)                (4,999,468)          (4,999,744)
                                             -------------              ------------          ------------
           At 31 December 2012                     10,493                196,334,700          196,345,193
                                             -------------              ------------          ------------
                                             -------------              ------------          ------------
                                                                                               
        Representing:                                                                          
        Cost                                       10,493                          -                10,493
        Valuation                                       -                196,334,700           196,334,700
                                             -------------              ------------          ------------
                                                   10,493                196,334,700           196,345,193
                                             -------------              ------------          ------------
                                             -------------              ------------          ------------
                                                                                               
        Accumulated depreciation:                                                              
           At 1 July 2012                           4,815                 18,827,321            18,832,136
           Depreciation for the period              1,527                  3,465,393             3,466,920
           Currency realignment                      (166)                  (649,290)             (649,456)
                                             -------------              ------------          ------------
           At 31 December 2012                      6,176                 21,643,424            21,649,600
                                             -------------              ------------          ------------
                                             -------------              ------------          ------------
                                                                                               
        Net book value:                                                                        
           At 1 July 2012                           4,706                137,044,949           137,049,655
                                             -------------              ------------          ------------
                                             -------------              ------------          ------------
           At 31 December 2012                      4,317                174,691,276           174,695,593
                                             -------------              ------------          ------------
                                             -------------              ------------          ------------


                                           Furniture and            
                                               equipment                   Aircraft                Total
                                            -------------              ------------          ------------
        30 June 2012                                   £                          £                    £
        ------------
        Cost or valuation:                                                                      
           At 1 July 2011                          7,539                 98,053,541             98,061,080
           Additions                               1,789                 69,338,834             69,340,623
           Disposal of subsidiary                      -                (13,904,233)           (13,904,233)
           Currency realignment                      193                  2,384,128              2,384,321
                                             -------------              ------------          ------------
           At 30 June 2012                         9,521                155,872,270            155,881,791
                                             -------------              ------------          ------------
                                             -------------              ------------          ------------
                                                                                                 
        Representing:                                                                            
        Cost                                       9,521                          -                  9,521
        Valuation                                      -                155,872,270            155,872,270
                                             -------------              ------------          ------------
                                                   9,521                155,872,270            155,881,791
                                             -------------              ------------          ------------
                                             -------------              ------------          ------------
                                                                                                
        Accumulated depreciation:                                                                
           At 1 July 2011                          2,220                 13,162,670             13,164,890
           Depreciation for the year               2,505                  6,512,830              6,515,335
           Impairment loss                             -                  5,551,385              5,551,385
           Disposal of subsidiary                      -                 (6,798,079)            (6,798,079)
           Currency realignment                       90                    398,515                398,605
                                             -------------              ------------          ------------
           At 30 June 2012                         4,815                 18,827,321             18,832,136
                                             -------------              ------------          ------------
                                             -------------              ------------          ------------
                                                                                                 
        Net book value:                                                                          
           At 1 July 2011                          5,319                 84,890,871             84,896,190
                                             -------------              ------------          ------------
                                             -------------              ------------          ------------
           At 30 June 2012                         4,706                137,044,949            137,049,655
                                             -------------              ------------          ------------
                                             -------------              ------------          ------------
                                             


9     SHARE CAPITAL

                                                                                                    
                                                                                       31 December            30 June
                                                                                              2012               2012
                                                                                       -----------           --------
                                                                                                 £                  £
     Allotted, called up and fully paid:                                                                             
     44,374,463 (30 June 2012: 42,374,463) ordinary shares of 1 penny each                 443,745            423,745
                                                                                       -----------           --------
                                                                                       -----------           --------
                                                                                       
      On  5  July  2012,  the  Company issued 2,000,000 ordinary shares of 1 penny  each  following  a  private
      placement exercise for £2,000,000.
      

10      DIVIDENDS PAID

                                                                         31 December          31 December
                                                                                2012                 2011
                                                                         -----------          -----------
                                                                                   £                    £
                                                                                              
       Dividend declared/paid during the 6 months ended 31 December:                          
                                                                                              
       Final dividend of 1.05p (2011: 1p)                                    464,356              407,266
                                                                         -----------          -----------
                                                                         -----------          -----------
                                                                                              

      No dividends have been declared subsequent to 31 December 2012.


11    CONTINGENT LIABILITIES

      There were no material changes in contingent liabilities since 30 June 2012.



12.   TRANSACTIONS WITH RELATED PARTIES
    
      Significant related party transactions:
      
                                                                         31 December          31 December
                                                                                2012                 2011
                                                                         ------------        --------------
                                                                                   £                    £
                                                                                              
                                                                                              
       Sales of goods to a related party(1)                                    8,798              125,639
       Sales of goods to a related party(2)                                      957                2,300
       Services rendered to a related party(1)                                     -               20,244
       Services rendered to a related party(2)                                 3,086                    -
       Maintenance rent received from a related party(1)                     908,600              702,975
       Rental income received from a related party(1)                      7,762,618            4,971,086
       Rental income received from a related party(3)                        119,004              109,398
       Interest income received from a related party(4)                          423                    -
       Interest income received from a related party(5)                        4,890                    -
       Interest income received from a related party(6)                          331                    -
       Service fee paid to a related party(7)                                  2,750               10,939
       Arrangement fee paid to a related party(8)                                  -               32,355
       Service fee paid to a related party(9)                                      -               61,260
       Service fee paid to a related party(10)                                     -               10,164
       Service fee paid to a related party(11)                                     -               10,000
       Service fee paid to a related party(12)                                     -               11,412
       Service fee paid to a related party(13)                               161,858                2,033
       Expenses rebilled from a related party(13)                             26,958               17,613
       Interest expense paid to a related party(8)                            63,282                6,675
       Interest expense paid to a related party(14)                                -                2,821
       Interest expense paid to a director of a subsidiary                     1,182                    -
                                                                                              
      
      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.   Received  from  Giant Mix Investment Ltd in which a director of the Company is also  a  director  of
           Giant Mix Investment Ltd
      5.   Received  from  Takeoff Services Pte Ltd in which a director of the Company is also  a  director  of
           Takeoff Services Pte Ltd.
      6.   Received  from  CaptiveVision  Capital Ltd in which a director of  the  Company  is  a  director  of
           CaptiveVision Capital Ltd.
      7.   Paid  to Leob Aron & Company Ltd in which a director of a subsidiary is also a director of Leob Aron
           & Company.
      8.   Paid to Fleet Solution Consulting Pte Ltd in which a director of a subsidiary is also a director  of
           Fleet Solution Consulting Pte Ltd.
      9.   Paid  to  Takeoff Services Pte Ltd in which a director of the Company is also a director of  Takeoff
           Services Pte Ltd.
      10.  Paid to Giant Mix Investment Ltd in which a director of the Company is also a director of Giant  Mix
           Investment Ltd.
      11.  Paid  to Epsom Assets Limited in which a director of the Company is also a director of Epsom  Assets
           Limited.
      12.  Paid  to  Sinclair  Management  in which a director of the subsidiary  is  the  sole  proprietor  of
           Sinclair Management.
      13.  Paid  to  Skywest Airlines (S) Pte Ltd in which a director of the subsidiary is also a  director  of
           Skywest Airlines (S) Pte Ltd.
      14.  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 2012.



13    EVENTS AFTER THE BALANCE SHEET DATE

      Subsequent to the balance sheet date, the followings occurred:
      
        a)  On 9 January 2013, the Company purchased 150,000 of its own ordinary shares at a price of 88 pence per
            ordinary share representing approximately 0.34 per cent of the Company's current issued share capital.  These
            150,000 ordinary shares are to be held in treasury.
            
        b)  On 25 January 2013, the Group has completed the purchase of a A320-200 which it had previously leased
            from another aircraft leasing 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 2012.


DIRECTORS

The  directors of Avation PLC are listed in its Annual Report for the year ended 30 June 2012.  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

11 February 2013

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