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Trading statements

BBA Aviation on course

08 November 2016 09:12

BBA Aviation says trading and cash flow remains in-line with expectations, with revenue up 27% year-on-year, reflecting the contribution from the Landmark acquisition completed in February and good organic growth at Signature.

In Flight Support, the enlarged Signature revenues grew 56% and 4.1% on a like-for-like basis (constant currency, adjusting for lower fuel prices and before acquisitions).

Signature continued to deliver good market outperformance and drop-through and Landmark is on track.

North American B&GA flight movements remain modestly up, recording 0.6% growth in the year to end September (same period last year: 0.7%). BBA Aviation says the integration of Landmark Aviation continues to progress well, with systems roll-out to new US FBO locations completed in September, ahead of schedule. The vast majority of actions required to achieve at least $35 million of annual cost savings are now complete. Signature development projects are also on track, and new Signature Select locations were added in Farmingdale, Long Island in September, and since 31 October, in Bogota, Columbia.

Aftermarket Services revenue was lower than the prior year period due to decline in ERO sales.

Ontic, the group's legacy support business, continues to perform well, with increased activity materialising as expected in the second half of this year, and a good contribution from licences acquired in 2015.

Ontic continues to assess a pipeline of opportunities in relation to new products and licence adoptions, signing a new agreement in the period, in addition to agreeing the acquisition detailed below. Conditions in ERO's markets remain challenging and while organic revenues were down 10.7%, we did see a small improvement in ERO's operating performance since the half year.

In September, the group announced the sale of ASIG, its commercial aviation services company, for $202 million. The transaction is subject to customary approvals and completion is expected around the end of 2016.

ASIG, now classified as a discontinued operation, reported organic revenue growth of 1.0%, with continued good operational performance.

BBA Aviation says this disposal further enhances the group's focus as a high quality, strongly cash generative market leader in the provision of business and general aviation and maturing aerospace platform services. BBA Aviation also announced that Ontic has reached agreement to acquire a portfolio of legacy avionics products from GE Aviation, for a cash consideration of $61.5 million on a cash and debt free basis, paid from existing financial resources.

At 9:12am: (LON:BBA) BBA Aviation PLC share price was +2.9p at 250p

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