Registration number:
European Aviation Limited
for the Year Ended 31 December 2024
European Aviation Limited
Contents
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Company Information |
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Strategic Report |
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Directors' Report |
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Statement of Directors' Responsibilities |
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Independent Auditor's Report |
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Profit and Loss Account |
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Statement of Comprehensive Income |
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Balance Sheet |
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Statement of Changes in Equity |
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Statement of Cash Flows |
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Notes to the Financial Statements |
European Aviation Limited
Company Information
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Directors |
P G Stoddart S E Aston T S Whetter S B Penton |
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Company secretary |
S E Aston |
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Registered office |
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Auditors |
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European Aviation Limited
Strategic Report for the Year Ended 31 December 2024
The directors present their strategic report for the year ended 31 December 2024.
Business overview and principal activities
The company operates in the global aviation sector with three principal activities:
• Aircraft trading & operations - sale of Airbus A340 and Boeing 737 aircraft together with lease, charter, operation and renovation
• Engine services - overhaul and sale of CFM56 series engines
• Parts & interiors - sale of aircraft spare parts and cabin/interiors components
Our model pairs asset trading (aircraft/engines/parts) with value-creation through refurbishment and overhauls.
Business Strategy
The company’s strategy remains focused on strengthening its position in the global aviation aftermarket through targeted growth, operational efficiency, and market resilience. Key strategic priorities include:
CFM56 Engine Growth
The company continues to invest in expanding overhaul capacity for the CFM56 engine platform, responding to sustained demand from operators maintaining legacy fleets. Initiatives to reduce turnaround times (TAT) and secure critical module and life-limited part (LLP) supply are central to improving service reliability and supporting long-term customer commitments.
Spares and Interiors Scaling
Deepening frame agreements with airline and MRO partners has enabled greater predictability in demand and enhanced collaboration. The company maintains a strategically positioned inventory of high-rotation rotable components and cabin interior assets, ensuring responsiveness to maintenance events and supporting fleet readiness across customer operations.
Operational Excellence
The company has implemented lean refurbishment workflows to drive efficiency and reduce cost. Data-led pricing models are being deployed to improve margin performance and competitiveness. In parallel, active management of foreign exchange and interest rate exposures remains a priority to mitigate financial risk and preserve profitability in a volatile macroeconomic environment.
Market Diversification
Efforts to broaden the customer base across geographies and operational segments-including passenger and cargo, operators-have strengthened the company’s resilience. This diversification supports revenue stability and positions the business to capture growth opportunities in emerging and underserved markets.
European Aviation Limited
Strategic Report for the Year Ended 31 December 2024
Key performance indicators
|
KPI |
Unit |
2024 |
2023 |
|
Turnover |
£ |
14,599,202 |
15,764,425 |
|
Operating profit |
£ |
5,002,160 |
2,772,638 |
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Operating profit margin |
% |
34 |
18 |
|
Stock held |
£ |
13,057,015 |
12,452,985 |
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Loans |
£ |
3,130,517 |
1,541,869 |
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Net assets |
£ |
81,008,249 |
63,849,398 |
Stakeholders and principal decisions
The directors have acted in a way they consider, in good faith, would most likely promote the success of the company for the benefit of its members as a whole. In doing so, they have had regard to the interests of the company’s key stakeholders, the long-term consequences of decisions, the desirability of maintaining high standards of business conduct, and the need to act fairly between members.
Key Stakeholders
The company’s operations are underpinned by a diverse stakeholder base, including:
• Employees, whose skills and engagement drive operational performance.
• Customers, primarily airlines and MROs, who rely on the company’s aftermarket services and inventory availability.
• Suppliers and lessors, who provide critical components, modules, and aircraft assets.
• Lenders and financial partners, who support liquidity and capital structure.
• Regulators, particularly civil aviation authorities, who oversee compliance and airworthiness.
• Local communities, where the company operates and contributes to employment and economic activity.
Engagement and consideration of interests
The Board and management team have embedded stakeholder engagement into decision-making processes through structured and ongoing dialogue:
Quarterly customer reviews were conducted to align engine shop throughput with airline schedules, ensuring responsiveness to operational needs.
Supplier forums facilitated collaboration on securing life-limited parts (LLPs) and modules, jointly managing lead times and mitigating supply chain risk.
Workforce listening sessions informed investment in training and tooling, particularly to enhance CFM56 engine shop capability and support career development.
Regular dialogue with lenders focused on liquidity planning, covenant compliance, and foreign exchange (FX) hedging strategies to preserve financial resilience.
Compliance engagement with regulators ensured continued adherence to airworthiness directives, export controls, and safety standards across jurisdictions.
European Aviation Limited
Strategic Report for the Year Ended 31 December 2024
Principal decisions in the year
The following decisions were made with full consideration of stakeholder interests and long-term business sustainability:
• Capital allocation was approved to support CFM56 engine events and expand inventory of high-turnover rotables, reducing exposure to supply disruption and enhancing service reliability.
• Parts pricing model was implemented to reflect real-time market conditions and currency movements, supporting margin integrity and customer transparency.
• Updated Health, Safety & Environment (HSE) standards were adopted across all facilities, reinforcing the Company’s commitment to safe and responsible operations.
Principal risks and uncertainties
The directors continually assess risks that could impact the company’s performance or stakeholder outcomes. Key mitigations include:
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Risk Area |
Mitigation Strategy |
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Residual value & market liquidity |
Conservative asset pricing, diversified exit channels, and remarketing agreements to preserve asset value. |
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Supply-chain constraints (LLPs/modules) |
Multi-sourcing strategies, strategic inventory holdings, and repair-vs-replace pathways to ensure continuity. |
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Regulatory & export controls |
Dedicated compliance team and audited processes to maintain full regulatory alignment. |
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FX & interest-rate volatility |
Use of natural hedging, forward contracts, and rate management tools to protect financial performance. |
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Credit risk |
Rigorous counterparty assessment, secured payment terms, and staged delivery models to reduce exposure. |
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Operational risk (safety/quality) |
Implementation of Safety Management Systems (SMS), Part-145/Part-M compliance, quality control gates, and incident reporting protocols. |
Related party balances
The company has a number of material balances outstanding with related undertakings. Details of these balances and the associated uncertainties are outlined below:
Skybus LLC. Skybus LLC is an associated company based in the USA that specialises in the sale of aircraft and engine spares worldwide. As of the balance sheet date, Skybus LLC owes the Company £2,151,246.
European Skybus Limited is a fellow subsidiary that holds essential regulatory approvals critical to the operations of European Aviation. As of the balance sheet date, the balance owed to the Company by European Skybus Limited is £7,028,036.
European Minardi Team Limited is a fellow subsidiary, and as of the balance sheet date, it owes European Aviation £6,136,540.
Approved and authorised by the
European Aviation Limited
Strategic Report for the Year Ended 31 December 2024
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European Aviation Limited
Directors' Report for the Year Ended 31 December 2024
The directors present their report and the financial statements for the year ended 31 December 2024.
Directors of the company
The directors who held office during the year were as follows:
Dividends
No dividends will be distributed for the period to 31 December 2024.
Future developments
European Aviation Limited has completed the sale of its 50.01% shareholding in European Cargo Limited (ECL) as of 19th November 2024. This transaction represents a significant milestone for the company, allowing it to focus on streamlining operations and leveraging its remaining business units for sustained growth.
Following the sale of ECL, the company remains committed to optimizing its aviation fleet and operational capabilities. In 2025, the company plans to acquire and refurbish aircraft to expand its charter operations and diversify revenue. Additional efforts will be made to broaden the customer base and route network.
Disclosure of information to the auditors
Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.
Reappointment of auditors
In accordance with section 485 of the Companies Act 2006, a resolution for the re-appointment of Wenn Townsend as auditors of the company is to be proposed at the forthcoming Annual General Meeting.
Approved and authorised by the
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European Aviation Limited
Statement of Directors' Responsibilities
The directors acknowledge their responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
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select suitable accounting policies and apply them consistently; |
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make judgements and accounting estimates that are reasonable and prudent; |
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state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and |
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prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
European Aviation Limited
Independent Auditor's Report to the Members of European Aviation Limited
Opinion
We have audited the financial statements of European Aviation Limited (the 'company') for the year ended 31 December 2024, which comprise the Profit and Loss Account, Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Statement of Cash Flows, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
• | give a true and fair view of the state of the company's affairs as at 31 December 2024 and of its profit for the year then ended; |
• | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
• | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the original financial statements were authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
European Aviation Limited
Independent Auditor's Report to the Members of European Aviation Limited
We have nothing to report in this regard.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
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the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
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the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception
In the light of our knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report and the Directors' Report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
• | adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or |
• | the financial statements are not in agreement with the accounting records and returns; or |
• | certain disclosures of directors' remuneration specified by law are not made; or |
• | we have not received all the information and explanations we require for our audit. |
Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities [set out on page 7], the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
European Aviation Limited
Independent Auditor's Report to the Members of European Aviation Limited
Auditor Responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which our procedures are capable of detecting irregularities, including fraud are detailed below:
• Enquiry of management, those charged with governance and the entity’s solicitors around actual and potential litigation and claims;
• Enquiry of entity staff in tax and compliance functions to identify any instances of non-compliance with laws and regulations;
• Reviewing minutes of meetings of those charged with governance;
• Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
• Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
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For and on behalf of
Oxford
OX1 3LE
European Aviation Limited
Independent Auditor's Report to the Members of European Aviation Limited
European Aviation Limited
Profit and Loss Account for the Year Ended 31 December 2024
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Note |
2024 |
2023 |
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|
Turnover |
|
|
|
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Cost of sales |
( |
( |
|
|
Gross profit |
|
|
|
|
Administrative expenses |
(1,818,325) |
(5,461,599) |
|
|
Operating profit |
|
|
|
|
Other gains/losses |
12,006,959 |
(4,523,602) |
|
|
Other interest receivable and similar income |
|
|
|
|
Interest payable and similar expenses |
( |
( |
|
|
Amounts written off investments |
- |
|
|
|
Profit before tax |
|
|
|
|
Profit for the financial year |
|
|
The above results were derived from continuing operations.
The company has no recognised gains or losses for the year other than the results above.
European Aviation Limited
Statement of Comprehensive Income for the Year Ended 31 December 2024
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2024 |
2023 |
|
|
Profit for the year |
|
|
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Total comprehensive income for the year |
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European Aviation Limited
(Registration number: 02496662)
Balance Sheet as at 31 December 2024
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Note |
2024 |
2023 |
|
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Fixed assets |
|||
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Tangible assets |
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Investments |
- |
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||
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Current assets |
|||
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Stocks |
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Debtors |
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Cash at bank and in hand |
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|
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||
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Creditors: Amounts falling due within one year |
( |
( |
|
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Net current assets |
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|
|
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Total assets less current liabilities |
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Creditors: Amounts falling due after more than one year |
( |
( |
|
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Provisions for liabilities |
( |
( |
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Net assets |
|
|
|
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Capital and reserves |
|||
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Called up share capital |
750,020 |
750,020 |
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Revaluation reserve |
2,959,965 |
2,959,965 |
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Profit and loss account |
77,298,264 |
60,139,413 |
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Shareholders' funds |
81,008,249 |
63,849,398 |
Approved and authorised by the
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European Aviation Limited
Statement of Changes in Equity for the Year Ended 31 December 2024
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Share capital |
Revaluation reserve |
Profit and loss account |
Total |
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At 1 January 2024 |
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Profit for the year |
- |
- |
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At 31 December 2024 |
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Share capital |
Revaluation reserve |
Profit and loss account |
Total |
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At 1 January 2023 |
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Profit for the year |
- |
- |
|
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At 31 December 2023 |
750,020 |
2,959,965 |
60,139,413 |
63,849,398 |
European Aviation Limited
Statement of Cash Flows for the Year Ended 31 December 2024
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Note |
2024 |
2023 |
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Cash flows from operating activities |
|||
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Profit for the year |
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|
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Adjustments to cash flows from non-cash items |
|||
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Depreciation and amortisation |
|
|
|
|
Profit on disposal of tangible assets |
( |
- |
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Profit from disposals of investments |
( |
- |
|
|
Finance income |
( |
( |
|
|
Finance costs |
|
( |
|
|
( |
( |
||
|
Working capital adjustments |
|||
|
(Increase)/decrease in stocks |
( |
|
|
|
Decrease in trade debtors |
|
|
|
|
Increase/(decrease) in trade creditors |
|
( |
|
|
Decrease in provisions |
( |
( |
|
|
Cash generated from operations |
|
|
|
|
Income taxes paid |
( |
( |
|
|
Net cash flow from operating activities |
|
|
|
|
Cash flows from investing activities |
|||
|
Interest received |
|
|
|
|
Proceeds from sale of subsidiaries |
|
- |
|
|
Acquisitions of tangible assets |
( |
( |
|
|
Proceeds from sale of tangible assets |
|
|
|
|
Net cash flows from investing activities |
|
|
|
|
Cash flows from financing activities |
|||
|
Interest paid |
( |
( |
|
|
Proceeds from bank borrowing draw downs |
( |
( |
|
|
Payments to finance lease creditors |
( |
( |
|
|
Net cash flows from financing activities |
( |
( |
|
|
Net increase in cash and cash equivalents |
|
|
|
|
Cash and cash equivalents at 1 January |
|
|
|
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Cash and cash equivalents at 31 December |
41,585,902 |
5,748,538 |
|
European Aviation Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
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General information |
The company is a private company limited by share capital, incorporated in England and Wales.
The address of its registered office is:
United Kingdom
The principal place of business is:
European Hall
Bromyard Road
Ledbury
Herefordshire
HR8 1LG
United Kingdom
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Accounting policies |
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Statement of compliance
These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.
Basis of preparation
These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.
The company's functional currency is GBP. Monetary amounts in these financial statements are rounded to the nearest £. The company operates using three primary currencies - $USD, GBP and Euros. The majority of trade is conducted using $USD, however a significant proportion of borrowings and most overhead expenses and fixed assets are denominated in sterling. The company has judged that sterling is the most appropriate functional currency for the purpose of these financial statements.
European Aviation Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Judgements
A. Airframe, engine and spares stock |
The Directors are continually reviewing stock values and estimates of the company's stock. Valuing A340 airframes and associated engine stock is particularly challenging as there is a limited market for them. The directors acknowledge the inherent uncertainty in valuing this stock. The value of airframes and related engines stock reflected in these financial statements at 31 December 2024 is £1,532,111 (after impairment). Total stock is broken down as airframe stock and related engines £5,029,888 and spares and components of £8,027,127 (after impairment). |
B. Cost of sales adjustment |
Specific elements of stock with a balance sheet value of £1,887,846 have been valued using a "Cost of Sales Adjustment". In these cases the deduction of cost of sales is calculated by reference to a percentage of the sales value achieved in the period/year. The percentages used are based on estimates that have been carefully considered by the directors using their knowledge of the stock and the state of the market. |
C. Balance due from Skybus LLC |
Note 25 to the financial statements discloses a balance due from Skybus LLC ("LLC") a related undertaking, of £2,151,246. The amount stated is after an impairment provision of £1,600,000 brought forward. The recovery of the amount shown on the balance sheet is dependent upon the future transfer of aviation stock items and equipment from LLC to the company, as well as the successful outcome of a proposed restructuring of LLC. The directors acknowledge that the treatment they have adopted in respect the balance is based on their judgement of the outcome of future events. They recognise that the amount that may be recoverable is uncertain, and that further impairments may be necessary in future accounting periods. |
D. Balance due from European Minardi Team Limited
Note 25 to the financial statements discloses a balance due from European Minardi Team Limited ("EMT") a fellow subsidiary, of £6,136,540. The amount stated is after an impairment provision of £1,100,000 brought forward. EMT's principal activities are unrelated to the core activities of European Aviation Limited, and recoverability has been determined from estimated net realisable values of the assets of EMT. One of EMT's main assets is a loan to European Skybus Inc. European Skybus Inc. has a substantial equity stake in Skybus LLC above. The directors acknowledge that the treatment they have adopted in respect the balance is based on their judgement of the outcome of future events and that further impairments may be necessary in future accounting periods.
European Aviation Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
E. Balance due from, and transactions with, European Skybus Limited
Note 25 to the financial statements discloses a balance due from European Skybus Limited ("ESL") a fellow subsidiary, of £7,028,036. The amount stated is after an impairment provision of £388,140 brought forward. One of ESL's principal balance sheet assets is a loan to European Skybus Inc. European Skybus Inc. has a substantial equity stake in Skybus LLC above. ESL's activities are closely related to those of European Aviation Limited and the two companies are mutually dependent from a regulatory and financial standpoint. There is a considerable volume of trading between the two companies (see note 25) . For these reasons the directors have assessed that an impairment provision is necessary and that further impairments may be necessary in future accounting periods. ESL has charged European Aviation Limited £2,000,000 for aircraft fleet management services during the period (2023: £1,500,000). The Directors have used an element of judgment in arriving at this figure which in their opinion reflects market rates for the services supplied.
Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Sale of goods
Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
• the company has transferred the significant risks and rewards of ownership to the buyer;
• the company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
• the amount of revenue can be measured reliably;
• it is probable that the company will receive the consideration’due under the transaction; and
• the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
• the amount of revenue can be measured reliably;
• it is probable that the company will receive the consideration due under the contract;
• the stage of completion of the contract at the end of the reporting period can be measured reliably; and
• the costs incurred and the costs to complete the contract can be measured reliably.
European Aviation Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Foreign currency transactions and balances
Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.
On consolidation, the results of overseas operations are translated into Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.
Tax
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
• The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
• Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
• Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the company can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Tangible assets
Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.
European Aviation Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Depreciation
Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:
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Asset class |
Depreciation method and rate |
|
Freehold property |
2% straight line |
|
Long-term leasehold property |
2% straight line, based on building of 50 years |
|
Short-term leasehold property |
5% straight line |
|
Plant and machinery |
8.33-15% straight line |
|
Motor vehicles |
10-25% straight line |
|
Office equipment |
10-25% straight line |
|
Other fixed assets |
8.33-10% straight line |
Revaluation of tangible fixed assets
Individual freehold and leasehold properties are carried at current year value at fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are undertaken with sufficient regularity to ensure the carrying amount does not differ materially from that which would be determined using fair value at the balance sheet date.
Fair values are determined from market based evidence normally undertaken by professionally qualified valuers.
Revaluation gains and losses are recognised in other comprehensive income unless losses exceed the previously recognised gains or reflect a clear consumption of economic benefits, in which case the excess losses are recognised in profit or loss.
Business combinations
Business combinations are accounted for using the purchase method. The consideration for each acquisition is measured at the aggregate of the fair values at acquisition date of assets given, liabilities incurred or assumed, and equity instruments issued by the group in exchange for control of the acquired, plus any costs directly attributable to the business combination. When a business combination agreement provides for an adjustment to the cost of the combination contingent on future events, the group includes the estimated amount of that adjustment in the cost of the combination at the acquisition date if the adjustment is probable and can be measured reliably.
Investments
Investments in subsidiaries are measured at cost less accumulated impairment.
Investments in equity shares which are publicly traded or where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss. Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.
European Aviation Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Cash and cash equivalents
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
In the consolidated statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the company's cash management.
Trade debtors
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
Stocks
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a weighted average basis. Work in progress and finished goods include labour and attributable overheads.
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
The company's stock is valued at the lower of cost and net realisable value.
For further details see "Judgments in applying accounting policies and key sources of estimation uncertainty".
Trade creditors
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.
Trade creditors are measured at the transaction price.
Borrowings
Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss account over the period of the relevant borrowing.
Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.
Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.
European Aviation Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Provisions
Provisions are recognised when the company has an obligation at the reporting date as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
Leases
Fixed assets under hire purchase contracts or finance leases are capitalised in the balance sheet and depreciated over their estimated useful lives. The interest element is charged to income and expenditure over the relevant period. The capital element of the future payments is treated as a liability.
Rentals payable under operating leases are charged to income on a straight line basis over the term of
relevant lease.
Share capital
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.
Defined contribution pension obligation
A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.
Financial instruments
Classification
Recognition and measurement
Impairment
European Aviation Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Consolidated statement of comprehensive income.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the company would receive for the asset if it were to be sold at the balance sheet date.
Leased assets: the Company as lessor
Where assets leased to a third party give rights approximating to ownership (finance lease), the lessor recognises as a receivable an amount equal to the net investment in the lease i.e. the minimum lease payments receivable under the lease discounted at the interest rate implicit in the lease. This receivable is reduced as the lessee makes capital payments over the term of the lease.
A finance lease gives rise to two types of income: profit or loss equivalent to the profit or loss resulting from outright sale of the asset being leased, at normal selling prices, reflecting any applicable discounts, and finance income over the lease term.
|
Turnover |
The analysis of the company's turnover for the year by class of business is as follows:
|
2024 |
2023 |
|
|
Sale of stock |
|
|
|
Engines and aircraft |
|
|
|
Repairs |
|
|
|
Recharges |
1,402,238 |
- |
|
|
|
The analysis of the company's turnover for the year by market is as follows:
|
2024 |
2023 |
|
|
United Kingdom and EU States |
|
|
|
North America, Middle East, Africa and other |
|
|
|
|
|
|
Operating profit/(loss) |
Arrived at after charging/(crediting)
European Aviation Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
2024 |
2023 |
|
|
Depreciation expense |
|
|
|
Foreign exchange (gains)/losses |
( |
|
|
Other gains and losses |
The analysis of the company's other gains and losses for the year is as follows:
|
2024 |
2023 |
|
|
Gain on sale of investment |
|
- |
|
Gain on disposal of tangible assets and stock |
|
- |
|
Loss on loan waiver |
(8,597,000) |
(4,523,602) |
|
12,006,959 |
(4,523,602) |
|
Other interest receivable and similar income |
|
2024 |
2023 |
|
|
Interest income on bank deposits |
|
|
|
Other finance income |
|
|
|
|
|
|
Interest payable and similar expenses |
|
2024 |
2023 |
|
|
Interest on bank overdrafts and borrowings |
|
|
|
Interest on obligations under finance leases and hire purchase contracts |
|
|
|
Interest expense on other finance liabilities |
|
|
|
|
|
|
Staff costs |
The aggregate payroll costs (including directors' remuneration) were as follows:
|
2024 |
2023 |
|
|
Wages and salaries |
|
|
|
Social security costs |
|
|
|
Pension costs, defined contribution scheme |
|
|
|
|
|
European Aviation Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:
|
2024 |
2023 |
|
|
Administration |
|
|
|
Stores |
|
|
|
Sales |
|
|
|
|
|
|
Directors' remuneration |
The directors' remuneration for the year was as follows:
|
2024 |
2023 |
|
|
Remuneration |
|
|
|
Contributions paid to money purchase schemes |
|
|
|
498,590 |
493,196 |
During the year the number of directors who were receiving benefits and share incentives was as follows:
|
2024 |
2023 |
|
|
Accruing benefits under money purchase pension scheme |
|
|
In respect of the highest paid director:
|
2024 |
2023 |
|
|
Remuneration |
|
|
|
Company contributions to money purchase pension schemes |
|
|
|
Auditors' remuneration |
|
2024 |
2023 |
|
|
Audit of the financial statements |
|
|
European Aviation Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
Taxation |
The tax on profit before tax for the year is lower than the standard rate of corporation tax in the UK (2023 - lower than the standard rate of corporation tax in the UK) of
The differences are reconciled below:
|
2024 |
2023 |
|
|
Profit before tax |
|
|
|
Corporation tax at standard rate |
|
|
|
Tax (decrease)/increase from effect of capital allowances and depreciation |
( |
|
|
Effect of expense not deductible in determining taxable profit (tax loss) |
|
( |
|
Effect of revenues exempt from taxation |
( |
- |
|
Decrease from tax losses for which no deferred tax asset was recognised |
- |
( |
|
Tax decrease arising from group relief |
( |
( |
|
Total tax charge/(credit) |
- |
- |
The main rate of corporation tax increased from 19% to 25% on 1 April 2023.
Deferred tax
Deferred tax assets and liabilities
|
2024 |
Asset |
Liability |
|
Tax due on rollover relief claimed |
- |
|
|
- |
|
|
2023 |
Asset |
Liability |
|
Tax due on rollover relief claimed |
- |
|
|
- |
|
European Aviation Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
Tangible assets |
|
Land and buildings |
Plant and machinery |
Motor vehicles |
Fleet aircraft |
||
|
Cost or valuation |
|||||
|
At 1 January 2024 |
|
|
|
|
|
|
Additions |
|
|
- |
- |
|
|
Disposals |
- |
- |
- |
( |
|
|
At 31 December 2024 |
|
|
|
- |
|
|
Depreciation |
|||||
|
At 1 January 2024 |
|
|
|
|
|
|
Charge for the year |
|
|
|
- |
|
|
Eliminated on disposal |
- |
- |
- |
( |
|
|
At 31 December 2024 |
|
|
|
- |
|
|
Carrying amount |
|||||
|
At 31 December 2024 |
|
|
|
- |
|
|
At 31 December 2023 |
|
|
|
|
|
|
Total |
|||||
|
Cost or valuation |
|||||
|
At 1 January 2024 |
|
||||
|
Additions |
|
||||
|
Disposals |
( |
||||
|
At 31 December 2024 |
|
||||
|
Depreciation |
|||||
|
At 1 January 2024 |
|
||||
|
Charge for the year |
|
||||
|
Eliminated on disposal |
( |
||||
|
At 31 December 2024 |
|
||||
|
Carrying amount |
|||||
|
At 31 December 2024 |
|
||||
|
At 31 December 2023 |
|
||||
Included within the net book value of land and buildings above is £10,468,735 (2023 - £6,757,413) in respect of freehold land and buildings, £141,750 (2023 - £145,250) in respect of long leasehold land and buildings and £383,750 (2023 - £403,750) in respect of short leasehold land and buildings.
European Aviation Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Assets held under finance leases and hire purchase contracts
The net carrying amount of tangible assets includes the following amounts in respect of assets held under finance leases and hire purchase contracts:
|
2024 |
2023 |
|
|
Motor vehicles |
27,822 |
43,297 |
European Aviation Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Revalued assets
Freehold properties with a net book value of £4,007,389 (2023: £4,095,693) were valued to £4,900,000 on 22 April 2016 on an open market basis by an independent valuer.
A freehold property with a net book value of £805,000 (2023: £825,000) was valued to £1,000,000 on 25 April 2016 on an open market basis by an independent valuer.
The long leasehold properties were valued to £175,000 on 22 July 2016 on an existing use basis by an independent valuer.
If the freeholds/long leaseholds had not been included at valuation they would have been included under the historical cost convention as follows:
|
2024 |
2023 |
|
|
Cost |
5,573,501 |
5,573,501 |
|
Accumulated depreciation |
(3,572,753) |
(3,461,283) |
|
Net book value |
2,000,748 |
2,112,218 |
|
Investments |
|
2024 |
2023 |
|
|
Investments in subsidiaries |
- |
|
|
Subsidiaries |
£ |
|
Cost or valuation |
|
|
At 1 January 2024 |
|
|
Disposals |
( |
|
At 31 December 2024 |
- |
|
Carrying amount |
|
|
At 31 December 2024 |
- |
|
At 31 December 2023 |
|
European Aviation Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Details of undertakings
Details of the investments (including principal place of business of unincorporated entities) in which the company holds 20% or more of the nominal value of any class of share capital are as follows:
|
Undertaking |
Registered office |
Holding |
Proportion of voting rights and shares held |
|
|
2024 |
2023 |
|||
|
Subsidiary undertakings |
||||
|
|
No. 1 Enterprise Way
United Kingdom |
|
|
|
|
Subsidiary undertakings |
|
European Cargo Limited The principal activity of European Cargo Limited is |
In November 2024, the Group completed the sale of its investment in its cargo airline subsidiary, European Cargo Limited. The disposal was undertaken in line with the Board’s strategic objective to focus resources on the Group’s core aviation services operations.
|
Stocks |
|
2024 |
2023 |
|
|
Air frames |
|
|
|
Engines |
|
|
|
Spares and components |
|
|
|
|
|
The difference between purchase price or production costs of stocks and their replacement cost is not considered material.
Valuation of the company's stock is subject to "Judgements in applying accounting policies and key sources of estimation uncertainty" (note 2).
The carrying value of stocks are stated net of impairment losses.
Impairment of stocks
The amount of impairment loss included in profit or loss is £1,730,116 (2023 - £Nil). The impairment loss is included in cost of sales. Considering these market conditions, the adjustment in 737-300 stock aircraft values reflects the realigned market valuation, reduced demand, and increasing operational costs associated with these aging assets. This ensures that the financial statements more accurately represent the aircraft's fair market value and aligns with industry trends in aircraft asset management.
European Aviation Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
Debtors |
|
Note |
2024 |
2023 |
|
|
Trade debtors |
|
|
|
|
Amounts owed by group undertakings |
|
|
|
|
Other debtors |
|
|
|
|
Prepayments |
|
|
|
|
|
|
||
|
Less non-current portion |
( |
( |
|
|
|
|
|
Cash and cash equivalents |
|
2024 |
2023 |
|
|
Cash at bank |
|
|
|
Bank overdrafts |
( |
- |
|
Cash and cash equivalents in statement of cash flows |
41,585,902 |
5,748,538 |
European Aviation Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
Creditors |
|
Note |
2024 |
2023 |
|
|
Due within one year |
|||
|
Loans and borrowings |
|
|
|
|
Trade creditors |
|
|
|
|
Social security and other taxes |
|
|
|
|
Other payables |
|
|
|
|
Accruals |
|
|
|
|
Income tax liability |
169,534 |
263,604 |
|
|
|
|
||
|
Due after one year |
|||
|
Loans and borrowings |
|
|
|
Provisions for liabilities |
|
Legal proceedings |
Deferred tax |
Total |
|
|
At 1 January 2024 |
|
|
|
|
Provisions used |
( |
- |
( |
|
Unused provision reversed |
( |
- |
( |
|
At 31 December 2024 |
- |
|
|
|
|
|||
The legal proceedings provision relates to a claim which was settled in the year.
|
Pension and other schemes |
Defined contribution pension scheme
The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £
Contributions totalling £
|
Share capital |
Allotted, called up and fully paid shares
European Aviation Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
2024 |
2023 |
|||
|
No. |
£ |
No. |
£ |
|
|
|
|
750,020 |
|
750,020 |
|
Loans and borrowings |
Non-current loans and borrowings
|
2024 |
2023 |
|
|
Bank borrowings |
|
|
|
HP and finance lease liabilities |
86,034 |
221,621 |
|
|
|
|
Current loans and borrowings
|
2024 |
2023 |
|
|
Bank overdrafts |
|
- |
|
Bank borrowings |
|
|
|
HP and finance lease liabilities |
129,828 |
192,621 |
|
|
|
|
Bank borrowing
At the 31 December 2024 the bank borrowing facilities of the company were secured by specific legal charges over all the company's freehold properties, with the exception of freehold property with a total net book value of £805,000.
Holding company
Gannet Investments Limited (the holding company) also has a specific charge over a company freehold property with a net book value of £742,219 securing £495,000 and all other monies due or to become due from the company.
European Aviation Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Included in the loans and borrowings are the following amounts due after more than five years:
|
2024 |
2023 |
|
|
After more than five years by instalments |
|
|
|
- |
- |
Borrowings due after five years
Bank loan with interest charged at a variable rate of no more than 2% above the base rate. Repayments are £829 per month expiring October 2030.
|
Obligations under leases and hire purchase contracts |
Finance leases
The total of future minimum lease payments is as follows:
|
2024 |
2023 |
|
|
Not later than one year |
|
|
|
Later than one year and not later than five years |
|
|
|
|
|
|
Analysis of changes in net debt |
|
At 1 January 2024 |
Financing cash flows |
At 31 December 2024 |
|
|
Cash and cash equivalents |
|||
|
Cash |
5,748,538 |
38,196,197 |
43,944,735 |
|
Borrowings |
|||
|
Long term borrowings |
(872,468) |
482,336 |
(390,132) |
|
Short term borrowings |
(669,401) |
287,849 |
(381,552) |
|
Lease liabilities |
(414,242) |
198,380 |
(215,862) |
|
(1,956,111) |
968,565 |
(987,546) |
|
|
|
|
|
|
|
|
|||
European Aviation Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
Related party transactions |
|
Transactions with directors |
|
2024 |
At 1 January 2024 |
Advances to director |
At 31 December 2024 |
|
P G Stoddart |
|||
|
|
|
|
|
|
2023 |
At 1 January 2023 |
Advances to director |
At 31 December 2023 |
|
P G Stoddart |
|||
|
|
|
|
|
The balance is unsecured and interest free.
The balances outstanding in respect of the above balances have been provided for in full. The company has not released the director from his obligation to repay the debt.
In the event that Mr P G Stoddart is released from his obligation to repay the balance above, it is estimated that a company National Insurance charge of £581,052 (2023: £533,655) would arise. No provision for this amount has been made in the financial statements.
Amounts owed to group and related companies
The company had balances owing to the following group, and other companies which are related by common directorships and/or shareholding, as follows:
|
2024 |
2023 |
|
|
Group companies |
||
|
Gannet Investments Limited |
83,659 |
84,131 |
|
2024 |
2023 |
|
|
Related companies |
||
|
Autoquad Limited |
67,486 |
67,486 |
Amounts owed by group and related companies
The company had balances owing from the following group and related companies:
European Aviation Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
2024 |
2023 |
|
|
Group companies |
||
|
European Minardi Team Limited (EMT) |
6,136,540 |
6,450,075 |
|
Trans Europa Trading Limited (TET) |
494,124 |
325,311 |
|
European Skybus Limited (ESL) |
7,028,036 |
7,838,802 |
|
2024 |
2023 |
|
|
Related companies |
||
|
Skybus LLC |
2,151,246 |
1,866,512 |
|
European Cargo Limited (ECL) |
93,288 |
5,519,264 |
The above balances are unsecured and interest free.
Skybus LLC is 50% owned by European Skybus Inc. At the year end (and at 31 December 2023) European Skybus Inc. and European Aviation Limited were subject to common beneficial ownership (see note 25).
The company's balances with Skybus LLC, EMT and ESL are subject to "Judgements in applying accounting policies and key sources of estimation uncertainty" (note 2).
Transactions with group and related companies
The company purchased stock and utilised engineering services including fleet management services from ESL for £2,426,581 (2023: £1,938,754). An element of these charges are regarded as being subject to "Judgements in applying accounting policies and key sources of estimation uncertainty" (note 2).
The rental income receivable in respect of the company's long leasehold properties of £257,200 (2023: £251,658) is reflected in the income statement of ESL.
Sales of £48,469 (2023: £31,120) have been made to Skybus LLC.
Wages costs of £77,473 (2023: £152,959) were recharged from TET to EAL.
ECL was a subsidary of the company until 19 November 2024 and is now deemed to be a related company. The company had the following transactions with ECL in the year:
Sales of £1,402,238 (2023: £1,260,186) made to ECL.
Interest income of £Nil (2023: £305,226) received from ECL.
Loss on loan waiver of £Nil (2023: £4,523,602) in relation to loans made to ECL (these loans were settled on sale of the investment in ECL).
|
Controlling party |
The holding company is Gannet Investments Limited, a company registered in Liberia. The entire issued share capital of Gannet Investments Limited is owned by The Cosmar Settlement, a discretionary trust registered in the Isle of Man and administered from the UK. In August 2018 Companies House was notified that Mr P G Stoddart is a person with significant control.