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05 Mar 2019 | 08:03

BBA Aviation profits inch higher as revenues jump 20% as Signature divisions outperforms

BBA Aviation said Tuesday pre-tax profits rose as revenues jumped by a fifth as its US business and general aviation arm shrugged off weakness in the broader market.

For the 12 months to 31 December, statutory pre-tax profit rose 3% to £174.3m a year earlier and reported revenue jumped 20% to £2.88bn. Signature, the US B&GA business, delivered revenue growth of 29.5%, against a backdrop of US B&GA movements which were up just 0.9% for the year to December 2018, with network agreements contributing to outperformance, the company said. 'Uncertainty around the US trade tariffs and a slowdown in China are believed to have contributed to a decline in business confidence in the second half, and a reduction in discretionary flying, which has been particularly notable in our charter customer segment,' the company said. Ontic revenue increased by 3.4% to $216.0m, ahead of expectations thanks to a growing portfolio of IP-protected licences and a strong pipeline of licence opportunities, both of which were expected to help the company deliver its stated EBITDA target of $100m by the end of 2021. Statutory operating profit increased by 10.2% to £261.5m. The final dividend was increased by 5% to 10.07 cents, reflecting 'continued confidence in the Group's future growth prospects and cash generation,' the company said. 'Against the backdrop of a US B&GA market that grew 0.9% during 2018, Signature FBO delivered continued market outperformance of 210 basis points and we made progress in strengthening our unique global network of FBOs and building on a range of commercial initiatives that will enhance the customer experience and help deliver our medium-term target of 250 basis points of market outperformance,' Mark Johnstone, BBA Aviation Group Chief Executive. 'We continue to execute against our strategic growth initiatives as outlined at our recent capital markets day which reflects our continued expectation for long-term structural growth in B&GA flying activity. We are investing in both people and technology to drive growth; continuing to lead change within the FBO industry while also expanding our offering of non-fuel services; improving yield management; and further leveraging our market-leading network and service quality.'

At 8:03am: (LON:BBA) BBA Aviation PLC share price was +0.8p at 254.8p

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