TIDMBBA
RNS Number : 5844Y
BBA Aviation PLC
10 May 2019
10 May 2019
Trading update
In advance of its Annual General Meeting today, BBA Aviation
("the Group"), a market-leading provider of global aviation support
and aftermarket services, is pleased to announce a trading update
for the period 1 January to 30 April 2019, unless otherwise
stated.
The Group's trading performance remains in line with
expectations, with revenue for the continuing Group for the period
up 23.1% year-on year, reflecting organic growth along with the
acquisitions of EPIC, Firstmark and Ontic licences acquired during
2018. On a like-for-like basis (constant currency, adjusting for
fuel prices and before acquisitions) revenue was up 1.1%.
Signature
In Signature (Signature FBO, EPIC and TECHNICAir), revenues for
the period to end of April grew 22.7% and on a like-for-like basis
(constant currency, adjusting for fuel prices and acquisitions)
were up 0.4% against a strong comparative in 2018.
For the three months to 31 March 2019 US B&GA flight
movements grew 0.3% and like-for-like revenue growth in our
Signature FBO business was 1.2%. The 90 basis points of market
outperformance reflects a stable level of outperformance consistent
with the fourth quarter of 2018. In the year to date we have seen
similar trends in segmental activity with growth within the
fractional and owner-operator segments being offset by a continued
divergence of the more discretionary charter segment. Overall, the
US B&GA market performed as we expected in the first quarter,
with movements consistent with our guidance for a flat full year
2019 market backdrop.
2019 will see a full year contribution from EPIC which has
extended and fortified our network and has performed in line with
our expectations in the period.
We continue to progress our strategic initiatives in Signature
to deliver our medium-term B&GA market outperformance target of
250 basis points, as set out at the Capital Markets Days, and
remain confident with regard to the opportunities presented.
Ontic
In Ontic, revenue increased 33.6% and on a like-for-like basis
(adjusting for constant currency and acquisitions) delivered strong
organic growth of 14.4% in the first four months of the financial
year. The integration of the Firstmark business within Ontic is
proceeding well and to plan and it has contributed in line with our
expectations in the period. Ontic continues to have a strong order
book and to evaluate an attractive pipeline of future licence
opportunities; we remain on track to deliver the $100m EBITDA
target by the end of 2021.
Discontinued operations
Our ERO business has continued to perform in line with our
expectations during the period with revenue growth of 10.7%
compared to the prior year. On a like-for-like basis (adjusting for
constant currency) revenue was up 11.8%. The ERO disposal process
is ongoing and we expect to update the market in due course.
Mark Johnstone, BBA Aviation CEO commented "We are pleased with
the initial progress made as we advance our strategic growth
initiatives outlined at the Capital Markets Days in both Signature,
particularly in non-fuel and in Ontic, where we delivered strong
organic growth. The continuing Group is focused on high ROIC and
strongly cash generative market-leading businesses and the outlook
for the full year remains unchanged."
IFRS 16
The adoption of IFRS 16, effective 1 January 2019, has no impact
on the economic prospects, strategy or cash generative nature of
our businesses.
The long term FBO leases, to which the new accounting standard
applies, are granted by an airport to Signature and convey a long
term right to operate at the airfield from which Signature
generates long term cashflows.
Our interim results, to be published on 5 August, will be
reported on an IFRS 16 basis and as we have previously stated IFRS
16 will materially impact several key financial metrics with regard
to reported performance, financial position, financing costs and
associated financial leverage. Although we will not restate the
comparative disclosures for the impact of IFRS 16, to aid
comparability we will reconcile the IFRS 16 disclosure back to the
historical accounting treatment of leases which now becomes an
Adjusted Performance Measure (non-GAAP metric). This will ensure
consistency and comparability while also clearly disclosing the
impact of the new standard.
We have reproduced, and we reaffirm below the guidance
previously provided on the impact of IFRS 16 for FY19, based on the
FY18 lease portfolio at the date of adoption (1 January 2019).
Metric Increase/decrease No impact
Free cashflow FY 2019 - -
------------------- ----------- ------------------ ----------
Revenue FY 2019 - -
------------------- ----------- ------------------ ----------
Metric Increase/decrease Impact
----------- ------------------ ----------
Operating profit FY 2019 Increase c12%
EBITDA FY 2019 Increase c30%
----------- ------------------ ----------
Interest FY 2019 Increase c100%
------------------- ----------- ------------------ ----------
Profit before tax FY 2019 Decrease c10%
------------------- ----------- ------------------ ----------
Adjusted EPS FY 2019 Decrease c10%
------------------- ----------- ------------------ ----------
Total assets 1 Jan 2019 Increase c25%
------------------- ----------- ------------------ ----------
Total liabilities 1 Jan 2019 Increase c50%
------------------- ----------- ------------------ ----------
Operating cashflow FY 2019 Increase c35%
------------------- ----------- ------------------ ----------
Net debt 1 Jan 2019 Increase c85%
----------- ------------------ ----------
Debt covenants are unchanged and will continue to be tested on a
pre-IFRS16 basis.
Notes:
The Group will publish its interim results for the half year
ended 30 June 2019 on 5 August 2019.
Enquiries:
BBA Aviation plc
David Crook, Group Finance Director
Kate Moy, Head of Investor Relations and Communications
(020) 7514 3999
Tulchan Communications
David Allchurch
(020) 7353 4200
Information on BBA Aviation plc
BBA Aviation plc is a market leading, global aviation support
and aftermarket services provider, primarily focused on servicing
the Business and General Aviation (B&GA) market. We support our
customers through three principal businesses: Signature Flight
Support and Signature TECHNICAir(TM) and EPIC Fuels which provide
premium, full service flight and home base support including
refuelling, ground handling and MRO services through the world's
largest fixed base operation (FBO) network for B&GA users with
around 200 locations covering key destinations in North America,
Europe, South America, Caribbean, Africa and Asia. EPIC Fuels is a
global provider of aviation fuels, supplies and services. Ontic is
a leading provider of high-quality equipment and cost-effective
solutions for the continuing support of maturing and legacy
aerospace platforms with locations in the USA, Europe and Asia.
Engine Repair & Overhaul/Global Engine Services is a leading
independent engine service provider to global B&GA operators,
the rotorcraft market and regional airline fleets with locations in
the USA, Europe, South America, Asia and the Middle East.
On 1 March 2018 BBA Aviation announced that it was conducting a
strategic review of the ERO business and, at the end of May 2018,
management committed to a plan to sell substantially all of the
business and the relevant assets and liabilities were classified as
held for sale.
For more information, please visit www.bbaaviation.com
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London Stock Exchange. RNS is approved by the Financial Conduct
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of this information may apply. For further information, please
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END
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