Aircraft leasing trust reinstates dividend after difficult 18 months

Amedeo Air Four Plus targets 5p annual dividend which could increase depending on leases with Thai Airways


An aircraft leasing investment trust is to start repaying its dividend after a difficult 18 months for the aviation sector due to the Covid pandemic.

Amedeo Air Four Plus, which aims to achieve income returns and a capital return for shareholders by acquiring, leasing and selling aircraft, has reinstated its dividend with an annual target of 5p.

Analyst Stifel has maintained a positive rating on the trust despite its 17% dividend yield being below rival trust Doric Nimrod Air 2’s 26%.

“The underlying aircraft are likely to have more robust valuations than the A380. We maintain our positive recommendation,” said Stifel analyst Sachin Saggar in a note.

The company currently has a portfolio of six A380, two B777-300ER and four A350-900 aircraft, all on long-term leases to either Emirates or Thai Airways International. Stifel noted the trust had the potential to increase the dividend depending on the performance of the Thai leases.

In September last year, Stifel said the onset of the pandemic in 2020 left the aviation sector one of the most impacted and resulted in the share price of Amedeo Air Four Plus “languishing without any clear forecast on when dividends will resume”.

At the time, Stifel described shareholders as being “between a rock and a hard place” due to mixed messages from the board over the dividend which was reliant on the Emirates leases which continued to meet obligations whereas the Thai leases were still under negotiation.

The Emirates lease payments supported two reduced ad hoc dividends of 1.5p and 1.15p before the board backtracked and moved to a wait and see approach, Stifel noted, which gave shareholders false hope.

However, Stifel’s latest note flagged the new 1.25p quarterly dividend which the board is keeping under review, in the light of the actual performance of its leases, with a view to increasing the rate if prudent.

According to the Association of Investment Companies, the Amedeo Air Four Plus share price is trading on a 60% discount to net asset value. The trust’s share price is down 6% over the past year.


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