Underlying pre-tax profits plunged 15 per cent to $71.7m at aviation services group BBA Aviation after its core flight support unit was hit by lower de-icing revenues and one-off costs for exiting operations at Miami and Tampa. Worryingly, chief executive Simon Pryce "doesn't anticipate any material improvement in markets in the second half". As a result, broker N+1 Brewin expects downgrades of 5 to 10 per cent on full-year forecasts of adjusted pre-tax profits of $174.7m and EPS of 27.8¢, implying a 13 per cent decline on the 29¢ of adjusted earnings BBA reported in 2011.
Flight support – BBAs biggest division – which handles and refuels private jets across a global network of airports through its Signature brand, reported overall revenues down 4 per cent to $668m and like-for-like revenues down 7 per cent. Cash flow generation in the business also took a nosedive, falling by a quarter, and there was margin pressure, too. This is a concern since Signature has been expanding its network opening new operations in Berlin, Omaha and Daytona, and after the period-end it made a $27m acquisition to expand operations across 16 locations in Canada.
On a positive note, aftermarket services, which overhauls jet engines, reported double-digit organic sales and profit growth.
BBA (BBA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 183p | MARKET VALUE: | £877m | |
| TOUCH: | 179.6-183p | 12-MONTH HIGH: | 220p | LOW: 153p |
| DIVIDEND YIELD: | 4.9% | PE RATIO: | 10 | |
| NET ASSET VALUE: | 204¢* | NET DEBT: | 46% | |
| Half-year to 30 Jun | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2011 | 1.06 | 79.6 | 13.7 | 3.99 |
| 2012 | 1.09 | 58.4 | 10.2 | 4.20 |
| % change | +3 | -27 | -26 | +5 |
Ex-div: 19 Sep Payment: 2 Nov *Includes intangible assets of $980m or 204¢ a share £1=$1.56 | ||||
