BBA Aviation plc (LON:BBA), today announced half year results for the six months to 30 June 2018
Highlights
· Total underlying operating profit up 3.3% to $180.5 million; Signature network outperforming a soft market
· Continuing operations:
o Flight Support (87% of continuing Group underlying operating profit)
§ Organic revenue up 5.0% with network agreements contributing to outperformance
§ US B&GA market softer than the expected 3% growth, with Q1: 2.6% and April & May average of 1.9%
§ Operating profit up 1.8% with opex investment in technology on track for deployment in 2019
o Aftermarket Services (13% of continuing Group underlying operating profit)
§ Operating profit growth of 8.6% to $23.9m, driven by Ontic licence acquisitions
§ Licence acquisitions and FX more than offsetting prior year cyclical military orders
· Discontinued operations:
o Engine Repair and Overhaul excluding the Middle East (ERO) delivered further improvement in underlying operating profit performance of $3.8 million representing 39.6% growth over H1 2017
· Statutory total operating profit increased by 4% to £128.2 million (H1 2017: $122.7 million)
· Continuing statutory profit before tax was $76.2 million versus $85.8 million for the first half of 2017
· Strong free cash flow of $114.5 million (H1 2017: $56.6 million), leverage at 2.6x net debt/EBITDA
· Group ROIC increased by 30 basis points to 11.3% (Dec 2017: 11.0%)
· Underlying total adjusted basic EPS increased by 3% to 11.7¢. Total basic EPS increased by 27% to 6.5¢
· Interim dividend increased by 5% to 4.00 cents reflecting continued confidence in the Group’s future growth prospects
Mark Johnstone, BBA Aviation Group Chief Executive, commented:
“We are pleased with our operational achievements in the first half of 2018 and were delighted to announce the $88m acquisition of EPIC. Against the background of a softer US B&GA market that grew 2.3% during the first five months of the year, we delivered continued market outperformance and made progress in driving the benefits of Signature’s unique global network of FBOs. We have invested in technology to underpin the future growth and longer-term market outperformance and capture the potential we see to expand the offering of non-fuel services, improve yield management and further leverage our market leading network and service quality.
In Aftermarket Services, Ontic had a solid first half against a strong prior year comparative and is expected to perform in line with expectations for the full year. It has a growing portfolio of IP protected licences and continues to have a strong pipeline of growth opportunities as we look to leverage data analytics and expand on more platforms.
In summary, the continuing Group is focused on high ROIC and strongly cash generative market leading businesses and has a good pipeline of investment opportunities. The Board is confident of modest growth in 2018, through continued outperformance against a softer US B&GA market backdrop.”
