ALLIANCE AVIATION SERVICES LIMITED (AQZ)
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04/07/2025

1

Buy

$3.70

40.15%

Alliance Aviation Services announced asset sales for around $112m in cash over two transactions, including the sale of twelve GE CF34-10 engines to Beautech Power Systems for US$40.2m and the company's Embraer E190-E1 inventory to AVIAN for US$32.5m, Ord Minnett explains.

The cash injection will allow Alliance to reduce its net debt to an estimated $387m, the broker states, which equates to a leverage ratio of around 1.9 times — better than the recent guidance at the investor day of $425m–$430m.

Additionally, the sales give further support to net debt guidance of $315m–$360m at the end of FY26.

No change to Buy rating and $3.70 target price. The analyst's earnings forecasts are tweaked slightly.

FORECAST
Ord Minnett forecasts a full year FY25 dividend of 0.00 cents and EPS of 36.30 cents.
Ord Minnett forecasts a full year FY26 dividend of 0.00 cents and EPS of 36.30 cents.

30/06/2025

1

Overweight

$3.89

47.35%

Wilsons notes investors concerned with Alliance Aviation Services' debt profile will be comforted by the engine and inventory sales announcement, which will bring in around $62.3m.

The sales demonstrate the company's focus on capital efficiency and achieve a more rapid balance sheet deleveraging, the broker highlights.

Minor changes to FY25 forecasts. The broker now expects the company to reduce its first dividend in 1H26 vs the previous forecast of 2H26, with a payout ratio expected at 20%. This is forecast to rise to 50% in FY27.

Overweight. Target price $3.89.

FORECAST
Wilsons forecasts a full year FY25 dividend of 0.00 cents and EPS of 37.00 cents.
Wilsons forecasts a full year FY26 dividend of 7.50 cents and EPS of 35.80 cents.