BBA Aviation profits dip despite Signature's outperformance
BBA Aviation reported a drop in interim profits on Monday, but the results were broadly in line with expectations as the core Signature division outperformed the US business and general aviation (B&GA) market.
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Profit before tax slipped to $132m for the six months ended 30 June, down 6% on the same period last year, following changes to the company's debt structure.
However, overall revenue came in 23% higher at $1.3bn, while operating profit was up 13% at $131.1m and BBA hiked its interim dividend by 5% to 4.2 cents.
The Signature segment, which includes businesses that provide refuelling, ground handling, line maintenance and other services to the B&GA and commercial aviation markets, saw revenue climb by 23% as it launched new commercial initiatives which contributed to its outperformance against a strong prior year comparative.
Organic growth in the signature FBO business was 1.0%, ahead of total organic revenue growth of 0.4% across the entirety of BBA.
The Ontic aircraft parts business also finished the period ahead of expectations, as its revenue rose 28%, though the FTSE 250 company said it will focus on the Signature business after announcing the $1.37bn sale of Ontic at the end of last week.
Chief executive Mark Johnstone said: "Looking forward, Signature is focused on maintaining its level of performance against the US B&GA market in the second half. Post the proposed disposals, BBA Aviation will be focused on the cash generative Signature business which will enable us to maintain our progressive dividend policy, coupled with the prospect of returns to shareholders as we maintain our target leverage range. The board is confident of delivering market outperformance through our Signature strategic growth initiatives."
BBA Aviation's shares were down 4.96% at 299.00p at 0809 BST.