TIDMBBA
RNS Number : 7443U
BBA Aviation PLC
01 April 2019
Date of notification: 1 April 2019
BBA Aviation plc (the "Company")
Annual Financial Report and Notice of AGM
Further to the release of the Company's Final Results
announcement on 5 March 2019, the Company announces that it has
today published its Annual Financial Report 2018 ("Annual Report
2018").
The Company also announces that it has today posted to
shareholders notice of an Annual General Meeting to be held at
10.30am on Friday 10 May 2019 at the Royal Aeronautical Society,
No. 4 Hamilton Place, London W1J 7BQ.
The Annual Report 2018 can be viewed at or downloaded from the
Company's website at:
http://www.bbaaviation.com/investors
The Notice of Annual General Meeting 2019 can be viewed at or
downloaded from the Company's website at:
http://www.bbaaviation.com/investors/board-and-corporate-governance/agm
Copies of the documents listed below have also been submitted to
the National Storage Mechanism located at
www.morningstar.co.uk/UK/NSM:
-- Annual Report 2018
-- Chairman's Letter and Notice of Annual General Meeting
-- Notice of Availability of BBA Aviation plc Annual Report 2018
and Notice of Annual General Meeting
At the Annual General Meeting due to be held on 10 May 2019 it
is proposed that the Company seek, inter alia, general authority
from ordinary shareholders for the Company to make market purchases
of up to 14.99 per cent of the Company's existing issued ordinary
share capital. This renews the authority granted by shareholders at
the Annual General Meeting held on 11 May 2018. Any ordinary shares
purchased under the authority may be cancelled or held in
treasury.
The Company's Final Results announcement released on 5 March
2019 contained the responsibility statement of the directors on the
Annual Report 2018 and details of significant events occurring
during the period. For the purposes of compliance with DTR 6.3.5
set out below is the statement of principal risks and uncertainties
which is set out in the Annual Report 2018 and the text of note 27
to the consolidated financial statements in the Annual Report 2018
concerning related party transactions.
"Risk management
We are committed to effective risk management to support
delivery of our strategic objectives.
How we manage risk across BBA Aviation
Our risk management process is designed to improve the
likelihood of delivering our business objectives, protect the
interests of our shareholders and key stakeholders, and enhance the
quality of our decision making through the awareness of
risk-assessed outcomes. It also assists in the safeguarding of our
assets, including people, finances, property and reputation. We are
committed to conducting business in accordance with all applicable
laws and regulations and in a manner that is consistent with our
values.
BBA Aviation's risk appetite and risk mitigation strategy are
matters that are overseen by the Board, with the support of the
Audit and Risk Committee, which manages the processes that underpin
risk assessment and our systems of internal control.
The risk assessment process drives the Internal Audit scope,
which is agreed in February each year by the Audit and Risk
Committee. The Chief Risk Officer and Head of Internal Audit attend
Audit and Risk Committee meetings to provide regular updates and
discuss any proposed changes to the plan.
The Board has established a framework for assessing risk in the
context of likelihood and impact in financial and reputational
terms. Each risk within the Group is assessed against this
framework and the Board reassesses its risk appetite on a bi-annual
basis when the Group risk map is presented to the Audit and Risk
Committee.
Group policies, standards and internal controls, together with
our values and our focus on safety, underpin our approach to risk
management. We are committed to being a responsible values-led
business and our leaders are responsible for embedding this into
BBA Aviation's culture, our decision making and how we work.
Our employees are accountable for working to established
standards and for identifying and escalating encountered risks so
that they can be appropriately managed. The Group has comprehensive
training programmes to ensure that employees are appropriately
trained in BBA Aviation's ethics policies.
The bi-annual risk assessment process looks forward three years
to create BBA Aviation's risk profile. These key Group-level risks
are input into the scenario modelling for the Viability Statement,
which is explained further on page 49 [of the Annual Report].
Progress in 2018
We continue to evolve our risk management process to provide
practical insight into risks the business is facing. The risk
registers have been extended to:
-- Identify risk velocity - the speed at which a risk may impact us;
-- Collect emerging risk five and ten years out, which will be a
key input to our strategic planning process.
We have also improved the rigour in our data collection and
analysis to support the impact evaluation of our key risks. This
information is input to the scenario modelling that underpins the
Viability Statement (see page 49 [of the Annual Report]).
Cyber and data breach risk
We have completed a phase of work on cyber risk including an
assessment of likely business threats, data protection and
information security controls. The cyber case study below explains
how our businesses are working together with IT and our corporate
functions to manage cyber risk.
A Data Privacy Lead reporting to the Group General Counsel will
be appointed in 2019 to address our increasing compliance
obligations arising from data privacy regulations in the EU and
worldwide.
Business continuity
We have undertaken business continuity and crisis management
exercises at two of our major Signature FBO locations - Luton, UK
and Teterboro, USA - and simulated how we would react to a
potential data leak to a competitor at Ontic Chatsworth,
California. See page 32 [of the Annual Report] for more details of
the Signature exercises.
Brexit
We hold a fortnightly call with representatives from our
businesses and our tax and legal teams.
Any risk that we face concerns any changes to the open skies
arrangement that may impact B&GA travel, and a slow-down in
customs processes that may lead to delays in the cross-border flow
of fuel, materials and engines, both for BBA Aviation, our
suppliers and their upstream supply chains, and customers shipping
engines to ERO for repair and overhaul. Having considered these
risks and in the context of the Group's flight operations and
supply chains being largely outside Europe, we see only limited
potential risk.
Principal risks
We have identified 12 principal risks and uncertainties facing
BBA Aviation which are considered by the Board to be material to
the development, performance, position or future prospects of the
Group. These risks, mitigations and changes during the year are
summarised in the table below. They are not set out in priority
order. Supply chain disruption has been added to the list in 2018
and managing key resources across major projects removed.
Change during the year
Increasing
Stable
Declining
Risk Description and potential Mitigation action/Control Link to business model
impact and strategy
Economy Structural changes Active monitoring of Market-leading
in the global lead economic indicators. assets
economic environment, Strong financial controls Robust and flexible
or cycle fluctuations to monitor financial operating models
that drive down performance and provide Drive operational
B&GA and commercial a basis for corrective efficiency and
flying, and military action when required. process improvement
expenditure. Low fixed costs allow
cost base to be flexed
to meet demand.
------------------------------ --------------------------------- -----------------------
Terrorist Global terrorist Airport and internal Market-leading
activity events either in-flight, access security processes, assets
at or near major vetting of potential Robust and flexible
airports materially staff members in recruitment operating models
impacting global process. Drive operational
air travel. Low fixed costs allow efficiency and
cost base to be flexed process improvement
to enable corrective
action to be taken.
------------------------------ --------------------------------- -----------------------
Legislative Legislative changes Active participation Market intelligence
changes causing material in all relevant industry Robust and flexible
increase to cost bodies. operating models
of B&GA flight relative Ongoing monitoring of Drive operational
to alternatives all US and EMEA political efficiency and
such as commercial activity which may impact process improvement
flying, road or B&GA activity.
rail travel. In Internal policies including
2018, the major Data Protection and supporting
change has been training ensure GDPR
the introduction requirements are understood.
of General Data
Protection Regulation
(GDPR).
------------------------------ --------------------------------- -----------------------
Competitor Ongoing competitor Active monitoring of Barriers to entry
activity activity to replicate competitor activity. Market intelligence
market position Strong financial controls Customer and
of Signature network. to monitor financial partner relationships
performance. Technology
Fortify network
and expand portfolio
Improve customer
experience
------------------------------ --------------------------------- -----------------------
People Ability to attract Succession planning process Market-leading
and retain high-quality embedded with review assets
and capable people at Executive Management Vision, Mission
at senior and mid-management Committee and Board level and Values
levels. annually.
Remuneration structure
designed to reward superior
performance and promote
retention.
Proactive employee development
and key talent retention
processes.
------------------------------ --------------------------------- -----------------------
Products Potential liabilities Standard operating procedures Customer and
and services from defects in with routine root cause partner relationships
services and products. analysis of all incidents.
Liability insurance.
------------------------------ --------------------------------- -----------------------
Cyber Impact of a successful Operation of a specialist Technology
security cyber attack. Information Security Drive operational
team. efficiency and
Continual refreshment process improvement
of firewalls and endpoint
protection, laptop encryption,
mobile device management,
intrusion protection,
password policy, vulnerability
and penetration testing,
identity and security
event management.
Cyber insurance added
to insurance programme
in 2019.
------------------------------ --------------------------------- -----------------------
Ethics Intentional or inadvertent Clear values statement Vision, Mission
non-compliance with and ethical policies. and Values
company values and Semi-annual compliance Governance
legislation, both certification by all
within BBA Aviation senior management.
and with trading Rigorous third party
partners. vetting processes.
Robust internal control
environment and regular
review by internal and
external audit.
------------------------------ --------------------------------- -----------------------
Environment Environmental exposures. Strong procedural controls Vision, Mission
and physical containment and Values
when working with fuel Drive operational
or other hazardous chemicals. efficiency and
Active management of process improvement
known environmental matters
to minimise costs to
resolve.
Environmental insurance
where appropriate.
------------------------------ --------------------------------- -----------------------
Banking Non-compliance with Strong treasury management Vision, Mission
covenants banking covenants controls concerning liquidity and Values
caused by a tighter management. Governance
regulatory environment Rigorous third party
around sanctions vetting processes, which
compliance, which includes compliance with
is a key condition sanctions regulations.
of our banking covenants.
------------------------------ --------------------------------- -----------------------
Tax Changes in tax regulation Timely compliance with
in both the USA all international tax
and EMEA could impact requirements.
our effective tax Continuous monitoring
rate and our cash of changes to tax legislation,
tax liabilities. taking advice where appropriate
from reputable professional
advisers.
------------------------------ --------------------------------- -----------------------
Supply chain Delay in delivery Regular business reviews Customer and
disruption of parts from multi-tiered with major suppliers partner relationships
supply chains operating that address horizontal Drive operational
across multiple supply chain issues. efficiency and
countries Mitigate single sources process improvement
of supply where able
or incorporate supply
agreements that provide
protection against loss
and interruption.
------------------------------ --------------------------------- -----------------------
Related party transactions
Transactions between the Company and its subsidiaries, which are
related parties, have been eliminated on consolidation and are not
disclosed in this note. Details of transactions between the Group
and other related parties are detailed below.
Compensation of key management personnel
Key management are the directors and members of the Executive
Committee. The remuneration of directors and other members of key
management during the year was as follows:
2018 2017
$m $m
========================== ===== =====
Short-term benefits 8.0 8.8
-------------------------- ----- -----
Post-employment benefits 0.7 0.4
-------------------------- ----- -----
Share-based payments 1.1 2.0
-------------------------- ----- -----
9.8 11.2
Post-employment benefits include contributions of $0.7 million
(2017: $0.4 million) in relation to defined contribution
schemes.
The remuneration of directors and key executives is determined
by the Remuneration Committee having regard to the performance of
individuals and market trends. The directors' remuneration is
disclosed in the Directors' Remuneration Report on pages 66-92 [of
the Annual Report].
Other related party transactions
During the year, Group companies entered into the following
transactions with related parties which are not members of the
Group:
Sales of goods Purchase of goods Amounts owed Amounts owed
by to
related parties related parties
============ ================= ==================== =================== ===================
2018 2017 2018 2017 2018 2017 2018 2017
$m $m $m $m $m $m $m $m
------------ -------- ------- --------- --------- --------- -------- --------- --------
Associates 4.3 14.4 738.8 610.5 0.6 2.0 82.1 64.7
Purchases of goods principally relates to the purchase of
aviation fuel including excise taxes. Purchases were made at market
price discounted to reflect the quantity of goods purchased. The
amounts outstanding are unsecured and will be settled in cash. No
guarantees have been given or received.
At the balance sheet date, Group companies had loan receivables
from associates and joint ventures of $0.6 million (2017: $2.0
million). The loans are unsecured and will be settled in cash,and
were made on terms which reflect the relationships between the
parties.
The Group operates various pension and other post-retirement
benefit schemes for its employees. Details are set out in note
19."
The financial information set out in the Company's Final Results
announcement of 5 March 2019 does not constitute the Company's
statutory accounts for the year ended 31 December 2018. Statutory
accounts for 2018 will be delivered to the Registrar of Companies
in due course.
This announcement should be read in conjunction with, and is not
a substitute for, reading the full Annual Report 2018.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
ACSKMGGDKMRGLZM
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