3rd Feb 2014 09:49
LONDON (Alliance News) - BBA Aviation PLC Monday said it is considering returning some cash to shareholders after it completed the sale of its APPH operations for USD128 million in cash, a move that disposes of most of its manufacturing operations, leaving it focused on airport and airline services.
In a statement, the provider of airport services like refuelling and ground handling as well as aircraft engine repairs and component support, said it had sold the landing gear and hydraulics maker to Héroux-Devtek Inc.
"In accordance with the group's disciplined approach to capital management, the board is considering an appropriate return of cash to shareholders and will make a further announcement regarding this in conjunction with the group's final results on 5th March. In the meantime, the proceeds of the disposal will be used to reduce the group's net borrowings," it said in a statement.
"APPH is the only part of BBA Aviation that is focused on product design and development, with significant manufacturing activities and a higher fixed cost base than the rest of the group," BBA Chief Executive Simon Pryce said in a statement.
Jefferies analyst Joe Spooner said the deal was positive as it streamlines the business and BBA had achieved a good price. He also noted latest US data showing an 8% increase in business jet movements in December, which should be good news for BBA.
Jefferies has a buy rating on BBA with a 345 pence price target.
BBA Aviation shares were up 1.7% at 313.7 pence Monday morning, one of the top gainers on the FTSE250.
By Steve McGrath; [email protected]; @SteveMcGrath1
(Jon Darby contributed to this article.)
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