30th Apr 2009 07:00
April 30th 2009
ANNUAL GENERAL MEETING AND INTERIM MANAGEMENT STATEMENT
In advance of its Annual General Meeting today, BBA Aviation plc, the aviation services and systems support group, issues an Interim Management Statement for the period from 1 January 2009.
Trading for the first quarter ended 31 March 2009 was in line with our expectations. Total revenue for the Group was 8% higher than the prior period, with Flight Support up 2% and Aftermarket Services and Systems up 17%, reflecting the benefits of currency and acquisitions which more than offset reduced fuel prices. On an organic basis (at constant currency and fuel prices and excluding the impact of acquisitions/disposals) revenue, compared to the first quarter of 2008, was down 9%.
The cost base has continued to be flexed to match demand and additional cost reduction initiatives have been identified and executed at minimal incremental cost. The annualised impact of all cost reduction measures taken since the start of 2008 is now estimated at £18m per annum, some £2m higher than reported at the time of our preliminary results at the end of February.
In Flight Support, sales in Signature for the first quarter declined organically by 12% and have shown signs of stabilisation in recent weeks. This compares to a market that was down by approximately 26% compared to 22% during the last quarter of 2008. The out-performance against the market continues the trend established during the second half of 2008 and reflects the quality of the network and the continued effectiveness of new pricing programmes introduced in the middle of last year. After a strong January, ASIG experienced weak de-icing in February and March but trading overall was broadly in line with our expectations. The organic decline in ASIG's sales was limited to 2% against a market which is estimated to have contracted by 10% during the first quarter with the out-performance reflecting good contract retention and new business wins.
In Aftermarket Services and Systems, the Engine Repair business experienced, as anticipated, weaker market conditions across a range of engine programmes although there is an expectation of order inputs improving during the second quarter of the year. Legacy Support continues to grow strongly with stable operating margins. The adoption of the Honeywell APU licence is proceeding to plan. As anticipated, trading in APPH has been adversely impacted by the continued cut backs to the 2009 production schedules being implemented by the Business Aviation OEMs and a decline in demand for replacement parts and repair and overhaul services for the regional turboprop market in the US.
At the end of the first quarter net debt had reduced by £40m to £514m from £554m at the end of last year. At constant exchange rates the reduction was £27m. We continue to prioritise strong cash generation and debt reduction. Following the introduction of a scrip alternative shareholders have elected to take 28% of the final cash dividend in shares which, upon approval at the AGM would reduce the cash dividend payment in May by just over £6m.
Since the end of March trading has followed a similar trend to the first quarter of the year.
Commenting on the Interim Management Statement, Simon Pryce, Chief Executive said: 'As we indicated at the time of our preliminary results, we anticipate 2009 being a challenging year and we continue to have limited visibility on the impact of the global financial and economic environment on our markets. However, as expected, we are trading satisfactorily and delivering a strong relative performance. We continue to manage our businesses proactively to deliver a robust performance despite the current environment and to generate cash which positions us well to benefit from the recovery when it comes.'
Enquiries:
BBA Aviation plc
Andrew Wood, Finance Director
020 7514 3950
Brunswick Group LLP
Simon Sporborg / Victoria Pease
020 7404 5959
Notes to Editors
BBA Aviation plc is a world leader in the provision of Flight Support and Aftermarket Services and Systems for business aviation, regional airline, military and commercial aviation operators, including FBO services, fueling, ground handling, turbine engine repair and overhaul and aviation components, landing gear and hydraulic systems. BBA has leading positions, well-known and reputable brands and a proven track record of organic and acquisition-led growth. BBA Aviation companies include Signature Flight Support, ASIG, Executive Beechcraft, Ontic, International Governor Services, APPH, Dallas Airmotive, Premier Turbines, H&S Aviation, International Turbine Service and Barrett Turbine Engine Company. For more information, please visit www.bbaaviation.com.
Related Shares:
SIG.L