Interim Results

2011 Interim Financial Report

Results for the half year ended

30 June 2011

Simon Pryce, Chief Executive Officer (020) 7514 3990

Mark Hoad, Group Finance Director (020) 7514 3950

BBA AVIATION PLC

David Allchurch / Christian Cowley / Martha Kelly (020) 7353 4200

TULCHAN COMMUNICATIONS

A video interview with Chief Executive Officer Simon Pryce is now available on www.bbaaviation.com and www.cantos.com.

An audio webcast of the analyst presentation will also be available from 09:00 today on www.bbaaviation.com and www.cantos.com.

INTERIM FINANCIAL REPORT FOR PERIOD ENDED 30 JUNE 2011

(1) Before exceptional items (as defined in note 3 to the financial statements).

(2) Basic earnings per share.

(3) Underlying operating profit return on average invested capital including goodwill and intangibles amortised or written off to reserves. 2010 full year.

(4) Cash generated by operations, plus dividends from associates, less tax, net interest and net capital expenditure (excluding Ontic licence acquisitions).

These definitions as outlined above are consistently applied throughout this interim financial report.

Financial highlights

·; Continued steady market improvement and share gains supporting organic revenue growth of 6%

·; Underlying operating profit up 17% on a constant currency basis to £60.0m

·; Adjusted earnings per share of 9.0p up 11% on a constant currency basis

·; Free cash flow impacted by timing difference, expected to normalise by year-end

·; Group return on invested capital increased by 60bps to 10.1%

·; Interim dividend increased by 5% to 2.52p

Operational highlights

Flight Support (62% of Group EBIT)

·; Signature continued to build on improved market conditions; further network enhancement with the acquisition of four FBOs

·; Further contract wins in ASIG; award of ground handling licence at Changi Airport, Singapore

Aftermarket Services and Systems (38% of Group EBIT)

·; Expected improvement in overhaul activity in ERO delivered; expansion of field service offering and international footprint

·; Legacy Support's integration of GE Aviation Systems' legacy fuel measurement business proceeding according to plan

·; APPH focused on further operational improvement

Continued strategic progress

·; Successful renewal of bank facilities and issue of US private placement notes providing a stable, long-term and diversified funding structure to support the growth strategy

·; £86m net proceeds from equity raising to fund continuing expansion

·; Five acquisitions in Signature and Legacy Support with annualised revenues of c. $60m

Simon Pryce, BBA Aviation Chief Executive Officer, commented:

"In an active and successful first half, BBA Aviation performed strongly as our markets improved. Good organic revenue growth and strong operating discipline resulted in enhanced profitability in both divisions and an improving trend in the Group's return on invested capital.

We have significantly improved the Group's financing structure to support the accelerated execution of our strategy and have made five acquisitions so far this year with a strong pipeline of further opportunities in our fragmented markets.

Notwithstanding global economic uncertainty, we continue to expect to build on the strong results delivered in the first half with positive underlying progress for the remainder of the year.

Over the longer term, the strengths of our business and our organic growth and consolidation opportunities, together with on-going operational improvement, mean that we expect to continue to deliver a strong performance and to generate superior returns."

BBA Aviation plc - Interim Financial Report, 5 August 2011

INTERIM FINANCIAL REPORT 2011

Overview

With our major markets showing steady improvement, BBA Aviation made positive progress with both the Flight Support and Aftermarket divisions effectively converting revenue growth into improved profitability.

The average USD/GBP exchange rate increased to $1.61 (H1 2010: $1.53) and the period end spot rate was also $1.61 (December 2010: $1.57; June 2010: $1.50). The movement in exchange rates reduced revenue by £23.3m, underlying operating profit by £2.1m and net debt by £9.2m.

Group revenue increased by 6% organically (excluding the impact of exchange rates, fuel prices, acquisitions and disposals) and by 12% overall to £660.2m. The revenue impact of higher fuel prices amounted to £43.1m, and acquisitions contributed £14.8m of additional revenue.

Underlying operating profits of £60.0m increased by 12% (2010: £53.6m) and on a constant currency basis by 17% principally as a result of increased activity across both divisions and in spite of the inclusion of a one-off £3.0m pension curtailment gain in the prior period. Reported operating margins were unchanged at 9.1% (2010: 9.1%). Adjusting for the impact of the higher fuel prices and the pension curtailment gain, underlying margins improved by 110 basis points.

The net interest expense reduced to £7.4m (2010: £8.5m) with £0.4m of the reduction due to exchange rate movements and the balance principally a result of lower average net debt partially offset by the higher costs associated with a new bank facility and US private placement from the second quarter. Interest cover improved to 10.6x (2010: 8.6x).

Underlying profit before tax increased by 17% to £52.6m (2010: £45.1m) and by 21% on a constant currency basis. The effective underlying tax rate was largely unchanged at 21.7% (2010: 21.3%). Adjusted earnings per share improved to 9.0p (2010: 8.4p) an increase of 7%, or 11% on a constant currency basis, with the growth rate lower than underlying profit before tax as a result of the increased number of shares in issue compared to the prior period.

Profit before tax increased by 27%, or 32% on a constant currency basis to £49.5m (2010: £39.0m) with exceptional items further reduced to £3.1m (2010: £6.1m). The exceptional items include amortisation of acquired intangibles of £2.1m (2010: £1.8m), and £1.0m of acquisition costs (2010: £0.2m) relating principally to the Legacy fuel measurement business acquisition. In the prior period restructuring expenses of £4.1m were incurred, primarily associated with the closure of APPH's Bolton landing gear facility. Unadjusted earnings per share were 8.5p (2010: 7.3p).

Free cash flow of £3.6m was lower than the prior period (2010: £35.2m) due in part to the expected reversal of the £13m short term timing benefit reported at the end of 2010, the £6m payment of fees associated with the bank and private placement refinancing, and working capital increases driven by revenue growth and timing of customer receipts. For the year as a whole we expect cash conversion to return to normal levels.

Gross capital expenditure reduced to £8.6m (2010: £13.9m) with the prior period including £5.7m for the PT6T engine authorisation. We also received a £3.8m refund of our residual investment in the Miami FBO. Tax payments increased slightly to £3.7m (2010: £1.7m).

The cash dividend payment in the period increased substantially to £27.2m (2010: £11.6m) as a result of the withdrawal of the scrip dividend alternative as well as the increased number of shares following the equity share placing in March 2011. The share placing, which was largely taken up by existing shareholders, raised £86.3m in net proceeds to fund continuing expansion. Total spend on acquisitions in the first half amounted to £47.2m, and a further £14.7m has been spent since the period end with 72% of the placing proceeds now deployed.

At the beginning of the year $100m of cross currency swaps were closed out at a cash cost of £11.3m. There was a modest underlying reduction in net debt with a net cash inflow of £2.2m (2010: £15.4m) and this, together with a favourable £9.2m foreign exchange movement, meant that headline net debt decreased to £302.5m (2010 year-end : £313.9m). Net debt to EBITDA reduced to 1.9x from 2.1x at the end of 2010.

The focus on capital discipline remains with average invested capital only 1% higher in the year to 30 June 2011 compared with the year to 31 December 2010. Return on invested capital improved by 60 basis points to 10.1% (2010 full year: 9.5%).

Business Review

Flight Support

Revenue in Flight Support increased by 16% to £431.1m (2010: £370.1m) with £43.1m attributable to higher fuel prices, partially offset by the £15.1m adverse impact of higher average exchange rates. Acquisitions made by ASIG in 2010 and Signature in the first half of 2011 contributed £10.3m to revenue. On an organic basis Flight Support revenues increased by 6%. Underlying operating profits of £40.9m improved by 16% (2010: £35.2m) and by 21% on a constant currency basis with increased activity in both Signature and ASIG. Adjusting for the impact of higher fuel prices, operating margins of 9.5% showed a 100 basis point improvement over the prior period.

The Flight Support division generated operating cash flow of £29.6m (2010: £36.1m) representing cash conversion of 73% (2010: 103%) with the reduction a result of the short-term working capital increase. Return on invested capital increased by 100 basis points to 10.7% (2010 full year: 9.7%).

Signature

The improvement in business and general aviation (B&GA) flying hours continued throughout the period with the North American market growing by 4% compared with the first half of 2010. Signature's organic volume growth in North America of 8% was again ahead of the market. In Europe market activity increased by 5% for the half.

Revenue increased by 19% to £306.9m (2010: £258.4m) but excluding the impact of exchange rates, fuel prices and acquisitions, increased by 6% organically overall. The organic revenue growth was the same in both the USA and Europe.

Signature continued the development of its network with FBO acquisitions in Bozeman, Montana, and after the period end at Boca Raton, Florida and San Juan, Puerto Rico. Signature also consolidated its position at Edinburgh by acquiring the second FBO on the airport. Following the expiry of the lease at Miami International Airport, Signature ceased operations there in June. Good progress has been made on lease extensions at other locations. On 1 July Signature disposed of the small, sub-scale FBO at Spirit of St Louis airport for £2.0m.

ASIG

Revenue in ASIG increased by 16% on a constant currency basis to £124.2m (2010: £111.7m). The organic increase amounted to 5% and the SGS acquisition contributed £9.0m of revenue in the period. ASIG benefited from increased flight movements up by 1% in both North America and Europe and from a strong first half de-icing season.

ASIG renewed into-plane re-fuelling agreements with US Airways and US Airways Express covering more than 25 airports, was subcontracted by British Airways to provide passenger handling services to Iberia at London Heathrow and continued the expansion of its fuel transportation logistics business with contract wins from customers including Boeing and World Fuel Services. ASIG was recently awarded a licence to provide ground handling services at Singapore's Changi Airport and is in the process of identifying a launch customer.

Aftermarket Services and Systems

In Aftermarket Services and Systems revenue increased by 5% to £229.1m (2010: £217.3m) and by 10% on a constant currency basis. Organic growth of 8% reflected good growth in ERO and Legacy approaching run rate on recent licences, whilst APPH remains weak. The Legacy fuel measurement acquisition contributed revenue of £4.5m in the period and the remaining change in revenue was attributable to an adverse exchange rate movement. Operating profits of £24.7m increased by 4% (2010: £23.8m) and by 8% on a constant currency basis with the prior period including a one-off £3.0m pension curtailment gain. Operating margins were broadly unchanged from the prior period at 10.8% (2010: 11.0%). Excluding the one-off pensions gain, operating margins showed a 120 basis point underlying improvement.

Operating cash flow for the division reduced to £2.9m (2010: £22.6m) with cash conversion of 12% (2010: 95%), again adversely impacted by short-term working capital consumption. Return on invested capital improved by 30 basis points to 9.4% (2010 full year: 9.1%) despite the absence of the pensions gain.

Engine Repair and Overhaul‡

In Engine Repair and Overhaul (ERO), revenue increased by 4% to £178.6m (2010: £171.4m) representing a 9% organic revenue increase, partially offset by the impact of exchange rates. Overhaul activity continued to improve as expected following the increase in B&GA flying hours in 2010 and ERO also benefitted from improvement in the rotorcraft market, as well as the start of a contract to provide certain engine overhauls to the United States Military.

Engine inputs were healthy throughout the period, but ERO's ability to process engines through its overhaul facilities continued to be affected by parts supply delays, leading to a build up of work-in-progress through the half. Visibility of demand into the second half remains positive.

Field service capabilities were expanded further with the launch of additional Mobile Response Teams in St. Louis, Grand Junction Colorado, Singapore and Toluca, Mexico. Following the award of an independent authorisation from Honeywell earlier in the year, ERO is in the process of establishing a Regional Turbine Centre in Singapore which is expected to be operational in the first quarter of 2012.

Legacy Support‡

Revenue in Legacy Support increased by 19% organically to £31.0m (2010: £23.4m) which is in part a reflection of the second half weighting of revenues in 2010, flattering H1 comparatives. The fuel measurement business acquired in May contributed £4.5m to revenue in the period.

Ontic's order book has improved by 17% compared with the position at the end of 2010, enhancing order visibility, and both the revenue growth and order backlog have been supported by a focus on driving increased sales from our existing product portfolio.

The integration of the fuel measurement business is proceeding as planned.

APPH

APPH's revenue declined by 13% to £19.5m (2010: £22.4m) primarily due to supply chain constraints affecting APPH's ability to ship product.

APPH's markets have now stabilised and it continues to seek selective new contract orders, as well as driving operational improvement throughout the business, and managing its supply chain far more actively.

Unallocated central costs were largely unchanged at £5.6m (2010: £5.4m).

Net debt at the end of the period was £302.5m (year-end 2010: £313.9m) with a net cash inflow of £2.2m and a favourable foreign exchange movement of £9.2m. During the period previous bank facilities were replaced with a new bank facility and US private placement debt. The new bank facility is for a total of $750m with $250m maturing in 3 years and $500m maturing in 5 years. In May the Group issued $300m of US private placement notes with maturities of 7, 10 and 12 years. The initial offering of $150m was more than four times oversubscribed. This combination of a new bank debt facility and private placement provides us with a stable, long-term and diverse financing structure with substantial headroom to support the execution of our growth strategy. The new bank facility and private placement are more expensive than the facilities they replace and for the year as a whole we expect the net interest charge to be approximately £18m based on current interest and exchange rates.

At the end of the period $450m (£280m) of the total borrowing commitments of $1,050m (£652m) remained undrawn with leverage of 1.9x (year-end 2010: 2.1x) well within the Group's target range. Interest cover improved to 10.6x (2010: 8.6x).

During the period $100m of cross currency swaps were closed out at a cash cost of £11.3m. The remaining $300m and €50m of cross currency swaps mature between 2012 and 2013 and at the period end showed a mark-to-market loss of £37.6m (year-end 2010: £55.9m).

‡ IGS was transferred from Legacy Support to Engine Repair and Overhaul with effect from 1 January 2011 to reflect its focus on component repair and overhaul. 2010 revenues in Legacy Support and Engine Repair and Overhaul have been restated in these results accordingly.

Change of Reporting Currency

Following a recent review, the Board has decided to change the Group's reporting currency from sterling to US dollars with effect from the 2011 year-end results. Since the revenues, profits and cash flows of the business are primarily generated in US dollars, the change of reporting currency is being made in order to allow for greater transparency of the underlying performance of the Group. With effect from the final dividend for 2011, the Group's progressive dividend policy will be US dollar based with dividends being declared in US dollars and paid in either sterling or US dollars according to shareholders' preferences. Restated figures in US dollars will be released in the second half of 2011.

Going Concern

The Directors have carried out a review of the Group's trading outlook and borrowing facilities (as outlined above), with due regard to the risks and uncertainties to which the Group is exposed, the uncertain economic climate and the impact that this could have on trading performance. Based on this review, the Directors believe that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, the financial statements have been prepared on a going concern basis.

Dividend

Having maintained the dividend through the downturn and resumed a progressive dividend policy in 2010, the Board is now declaring an interim dividend of 2.52p (2010: 2.4p) an increase of 5% over last year.

Outlook

Notwithstanding global economic uncertainty, we continue to expect to build on the strong results delivered in the first half with positive underlying progress for the remainder of the year.

Over the longer term, the strengths of our business and our organic growth and consolidation opportunities, together with on-going operational improvement, mean that we expect to continue to deliver a strong performance and to generate superior returns.

Directors' Responsibilities

The Directors confirm that to the best of their knowledge:

(a) the condensed consolidated set of financial statements has been prepared in accordance with IAS 34 "Interim Financial Reporting";

(b) the interim financial report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and,

(c) the interim financial report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein).

Signed on behalf of the Board,

Simon Pryce Mark Hoad

Group Chief Executive Group Finance Director

4 August 2011 4 August 2011

This interim financial report contains forward-looking statements including, without limitation, statements relating to: future demand and markets of the Group's products and services; research and development relating to new products and services; liquidity and capital; and implementation of restructuring plans and efficiencies. These forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that will or may occur in the future. Accordingly, actual results may differ materially from those set out in the forward-looking statements as a result of a variety of factors including, without limitation: changes in interest and exchange rates, commodity prices and other economic conditions; negotiations with customers relating to renewal of contracts and future volumes and prices; events affecting international security, including global health issues and terrorism; changes in regulatory environment; and the outcome of litigation. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. This interim financial report has been drawn up and presented in accordance with and in reliance on applicable English company law and the liabilities of the directors in connection with this report shall be subject to the limitations and restrictions provided by such law.

This report is available in electronic format from the Company's website, www.bbaaviation.com

Consolidated Income Statement (Unaudited)

* Before exceptional items.

Exceptional items are items which are material or non-recurring in nature, costs relating to acquisitions and the amortisation of intangibles acquired through a business combination, as set out in note 3 to the financial statements.

The consolidated income statement has been prepared in accordance with the accounting policies set out in note 2.

Notes to the Consolidated Financial Statements (Unaudited)

1. Segmental information (Continued)

A portion of the Group's revenue from the sale of goods and services denominated in foreign currencies is cash flow hedged. The amounts disclosed above for revenue from the sale of goods include the recycling of the effective amount of the foreign currency derivatives that are used to hedge foreign currency revenue. The amount included in revenue is a loss of £0.4 million (Half year 2010: £3.1 million profit; Full year 2010: £3.6 million loss).

2. Basis of preparation and accounting policies

The information for the year ended 31 December 2010 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditors reported on those accounts: their report was unqualified, did not draw attention to any matters by the way of emphasis and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

The condensed set of financial statements included in this interim financial report for the six months ended 30 June 2011 have been prepared in accordance with the Group's accounting policies under International Financial Reporting Standards and International Accounting Standard 34 'Interim Financial Reporting', as adopted by the European Union. The same accounting policies and methods of computation are followed in the annual financial statements, as published by the company on 1 March 2011, (which are available on the company's website, www.bbaaviation.com). The condensed set of financial statements included in this interim financial report do not include all of the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual financial statements as at 31 December 2010.

The exchange rates used in respect of the US Dollar are:

30 Jun 2011 30 Jun 2010 31 Dec 2010

Average for the period $1.61 $1.53 $1.55

At the period end $1.61 $1.50 $1.57

Notes to the Consolidated Financial Statements (Unaudited)

3. Exceptional items

On the face of the income statement underlying profit is shown before exceptional items because the directors consider that this gives a useful indication of underlying performance.

Exceptional items amounted to a charge of £3.1 million before tax (first half 2010: £6.1 million, full year 2010: £10.2 million). The main items included within this are:

First half 2011: Administrative expenses of £2.1 million relating to amortisation of intangible assets acquired and valued in accordance with IFRS 3: Other non recurring operating expenses of £1.0 million are comprised of costs relating to acquisitions. The details of the acquisitions are included in note 5 to these consolidated financial statements.

First half 2010: Administrative expenses of £1.8 million relating to amortisation of intangible assets acquired and valued in accordance with IFRS 3, and, restructuring costs of £4.1 million relating primarily to the planned closure of APPH Bolton (£2.5 million) and severance costs at Dallas Airmotive (£1.4 million). Other non recurring operating expenses of £0.2 million are comprised principally of costs relating to an acquisition, offset by a gain arising from this acquisition where the fair value of the assets acquired exceeded the consideration.

Full Year 2010: Administrative expenses of £3.7 million related to amortisation of intangible assets acquired and valued in accordance with IFRS 3. Restructuring costs of £4.2 million associated primarily with the closure of APPH Bolton of £2.5 million and severance costs at Dallas Airmotive of £1.5 million. Other operating expenses of £2.3 million included acquisition costs of £1.5 million of which £1.4 million related to acquisitions made in prior years and other costs of £0.8 million which include costs related to businesses previously disposed off.

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