We advised offloading shares in flight support group BBA Aviation (BBA) ahead of these results, and the latest figures suggest that was the right move. If the fall in statutory pre-tax profits isn't worrying enough, flat adjusted pre-tax profits of $79.2m (£50.7m) were heavily flattered by the reclassification of an investment in Hong Kong, which led to a one-off accounting profit of $5.2m. Excluding this, adjusted pre-tax profits fell 6.5 per cent to $74m year on year, missing brokerage Liberum's forecast of $80m by 7.5 per cent.
Most of this miss can be put down to a poor performance from the group's aftermarket division. Despite a 6 per cent improvement in revenues, ongoing restructuring within the engine repair and overhaul business dragged operating profits down 33 per cent to $25.2m. This was partially offset by a better-than-expected performance from the flight support division, where operating profits rose 19 per cent to $79.4m. However, the $5.2m one-off gain helped offset $4m in operating losses in Singapore, following the termination of a contract there.
N+1Singer had expected pre-tax profits of $188m and EPS of 32.9ȼ this year, compared to $172m and 30.4ȼ in 2014, but the brokerage is likely to downgrade its numbers by as much as 5 per cent.
| BBA AVIATION (BBA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 294p | MARKET VALUE: | £1.38bn | |
| TOUCH: | 293.7-294p | 12-MONTH HIGH: | 362p | LOW: 290p |
| DIVIDEND YIELD: | 3.6% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 229ȼ* | NET DEBT: | 66% | |
| Half-year to 30 June | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (ȼ) | Dividend per share (ȼ) |
|---|---|---|---|---|
| 2014 | 1.15 | 92.0 | 18.7 | 4.62 |
| 2015 | 1.10 | 61.7 | 11.0 | 4.85 |
| % change | -5 | -33 | -41 | +5 |
Ex-div: 17 Sep Payment: 30 Oct *Includes intangible assets of $1.17bn, or 249ȼ a share £1=$1.56 | ||||
