BBA Aviation (BBA) shareholders awaiting an update on the sale of the engine repair and overhaul (ERO) unit will be disappointed. The business was put up for sale in the first half of the financial year following a strategic review, and reclassified as a discontinued operation in May 2018. That said, the division reported a 45 per cent increase in underlying operating profit to $35m (£26.7m) over the year, excluding the Middle East. Management said an announcement about the outcome of the disposal process would be made “in due course”. At the half-year results chief executive Mark Johnstone said the division no longer fit with the wider group.
Meanwhile, Signature, the airport services business - and BBA’s largest division at 85 per cent of underlying operating profit - continued to outperform its market. This division reported organic revenue growth of 2.7 per cent, or a 29.5 per cent increase on a reported basis to $2.35bn. The latter was aided by the acquisition of EPIC in July, which contributed $293m to sales during the six months of ownership. Underlying operating profit in the division fell 3 per cent to $322m, due in part to higher fuel prices. Within flight support, a shortage of skilled technicians and lower repair activity on contracted accounts put pressure on the line maintenance business.
Analysts at Liberum expect 2019 pre-tax profits of €333m, giving EPS of 25.7¢, compared with €307m and 23.7¢ in 2018.
| BBA AVIATION (BBA) | ||||
| ORD PRICE: | 241p | MARKET VALUE: | £2.49bn | |
| TOUCH: | 240.8-241.2p | 12-MONTH HIGH: | 354p | LOW: 207p |
| DIVIDEND YIELD: | 4.5% | PE RATIO: | 24 | |
| NET ASSET VALUE: | 188¢* | NET DEBT: | 69% | |
| Year to 31 Dec | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
| 2014 | 2.29 | 152 | 17.4 | 11.5 |
| 2015 | 1.71 | 77 | 9.8 | 12.2 |
| 2016 | 2.15 | -82 | -9.6 | 12.8 |
| 2017** | 1.86 | 158 | 11.6 | 13.4 |
| 2018 | 2.35 | 147 | 13.4 | 14.1 |
| % change | +26 | -7 | +16 | +5 |
| Ex-div: | 11 Apr | |||
| Payment: | 24 May | |||
| *Includes intangible assets of $2.52bn, or 244¢ a share **Restated £1=$1.31 | ||||
