A colder winter in the US meant more de-icing work for BBA Aviation (BBA) and a 6 per cent increase in underlying operating profit to $94m (£61m). And in a flat market, organic revenue, which strips out lower fuel prices and acquisitions, grew 2 per cent. True, there's little evidence of a significant pick-up in activity, but it's a matter of when, not if, says chief executive Simon Pryce.
In the meantime, BBA has been helping itself. Slimming down the business from five to two divisions is beginning to show benefits, and there's more to come from operational improvements, says Mr Pryce. Organic revenue at the core flight support business increased 3 per cent and profit jumped 9 per cent to $58.6m, driven by a return to more normal demand for de-icing services. However, the engine repair and overhaul business failed to match last year's strong half and revenue there fell 7 per cent. That offset strong growth at the smaller landing gear and legacy platform services operations, nudging sales at the aftermarket services division down slightly, although profits edged up 2 per cent to $45.1m.
Broker N+1 Singer expects adjusted pre-tax profit of $173.4m and adjusted EPS of 30¢ (from $163m and 28.5¢ in 2012).
BBA AVIATION (BBA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 297p | MARKET VALUE: | £1.43bn | |
| TOUCH: | 296-297p | 12-MONTH HIGH: | 302p | Low: 177p |
| DIVIDEND YIELD: | 3.3% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 214¢* | NET DEBT: | 44% | |
| Half-year to 30 Jun | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2012 | 1.09 | 55.4 | 9.6 | 4.20 |
| 2013 | 1.11 | 63.2 | 11.4 | 4.40 |
| % change | +2 | +14 | +19 | +5 |
Ex-div: 18 Sep Payment: 1 Nov *Includes intangible assets of $1bn, or 209¢ a share £1=$1.54 | ||||
