Published on : Friday, May 6, 2016
In advance of its Annual General Meeting today, BBA Aviation plc, the market-leading provider of global aviation support and aftermarket services, is issuing a trading statement for the period from 1 January to 31 March 2016, unless otherwise stated.
The Group is trading in-line with expectations, with revenue up 12% year-on-year, reflecting acquisitions and organic growth at Signature and Legacy. On a like-for-like basis (constant currency, adjusting for lower fuel prices and before acquisitions), revenue was down 6%.
In Flight Support, total revenue growth adjusting for fuel prices was up 33%. On an organic basis, Flight Support’s revenues fell 3%.
Signature Flight Support grew revenues 1.8% on an organic basis to outperform its market, despite an unusually mild winter impacting both de-icing revenues and traffic in some locations, and continued to deliver strong drop-through. North American B&GA flight movements continue their recovery, up 1% in the quarter (same period last year: 1%).
The $2.1bn acquisition of Landmark Aviation completed on 5 February. Integration is ahead of plan and we remain confident in delivering at least the $35 million of synergies previously identified. US Department of Justice approval for the transaction required the disposal of six FBOs, and a sale for $190 million was announced on 30 March with completion expected before the end of June.
Signature’s greenfield development project at Mineta San Jose International Airport opened officially in February, while the redevelopment at London Luton is progressing on track towards an expected completion in November. In April, we announced the acquisition of a majority share in four FBOs to add to Signature’s European network – Milan-Linate, Milan-Malpensa, Rome-Ciampino and Venice Marco-Polo.
Elsewhere in Flight Support, ASIG’s revenues were down 12% on an organic basis both as a result of previously announced contract losses and lower de-icing activity. Underlying operational performance was good and as referenced in our 2015 preliminary results announcement, we are making good progress in reviewing our value maximisation alternatives for ASIG.
Aftermarket Services revenue fell 11% on an organic basis. Conditions in ERO markets remain challenging. We are making good progress on both our footprint rationalisation programme and on the additional actions identified and referred to in our 2015 preliminary results announcement to further reduce the cost and complexity of the ERO business. In contrast, Legacy Support continues to perform well, with increased demand for product under existing licences as well as new adoptions contributing to growth versus the comparator period.
Commenting on the trading statement, Simon Pryce, BBA Aviation Group Chief Executive said:
“Despite marginally softer than anticipated markets and unseasonably warm weather in the north eastern United States, the Group as a whole is performing in line with expectations. Importantly, the Signature Flight Support network continues to outperform its markets with strong margin drop through, and we see increasing long term opportunity through the application of Signature’s industry leading customer focus, quality and breadth of service across our network of nearly 200 FBOs. Our Legacy Support business continues to deliver, ASIG’s underlying operational performance is solid and ERO is demonstrating operational improvements despite challenging markets. The Group has got off to a good start in what will be a transformational year for BBA Aviation.”
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