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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Bba Aviation Plc | LSE:BBA | London | Ordinary Share | GB00B1FP8915 | ORD 29 16/21P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 314.80 | 314.00 | 314.40 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Jul 2019 to Jul 2024
TIDMBBA
RNS Number : 5474Y
BBA Aviation PLC
02 March 2012
BBA Aviation plc
2011 Final Results
Results for the year ended
31 December 2011
For further information please contact:
Simon Pryce, Group Chief Executive (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.
FINAL RESULTS FOR PERIOD ENDED 31 DECEMBER 2011
Hot Features
Premium
Results in brief ($m)
Underlying results(1) Statutory results
2011 2010 % Change 2011 2010 % Change
Revenue 2,136.7 1,833.7 17% 2,136.7 1,833.7 17%
EBITDA 260.5 231.1 13% 250.1 221.0 13%
Operating Profit 198.9 171.4 16% 180.6 155.6 16%
Profit before tax 170.2 147.8 15% 163.6 132.0 24%
Earnings per share
(2) 29.0c 27.3c 6% 32.5c 23.6c 38%
Return On Invested
Capital(3) 10.6% 9.5%
Free Cash Flow(4) 185.8 178.6 4%
Net Debt 403.6 492.8
Net Debt to EBITDA 1.5x 2.1x
Dividend per share 13.94c 13.09c 6.5%
(1) Before exceptional items (as defined in note 2 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.
(4) Cash generated by operations, plus dividends from associates, less tax, net interest and net capital expenditure (excluding Legacy Support licence acquisitions).
These definitions as outlined above are consistently applied throughout this results announcement.
Financial highlights
-- Continued market outperformance, Group organic revenue growth of 5%
-- Underlying operating profit up 16% to $198.9m, Aftermarket Services & Systems up 23%; Flight Support up 10%
-- Underlying profit before tax up 15%, adjusted earnings per share of 29.0c up 6% -- Free cash flow increased by 4% with continued strong cash conversion of 102% -- Further improvement in Group return on invested capital up 110bps to 10.6% -- Full year dividend increased by 6.5% to 13.94c
Operational highlights
Flight Support (57% of Group EBIT)
-- Signature: continued market outperformance; strong operating profit conversion; integration of the 7 FBOs acquired proceeding well; network expanded to 112 locations
-- ASIG: good growth; SGS acquisition exceeding expectations; commencement of operations in Latin America
Aftermarket Services and Systems (43% of Group EBIT)
-- ERO: strong overhaul demand; expanded field service offering and footprint in South America and Asia
-- Legacy: buoyant demand; further operational improvement. Integration of GE Aviation Systems' legacy fuel measurement business progressing well, performance exceeding initial expectations
-- APPH: revenues stabilising; further opportunities for operational improvement and cost efficiencies
Strategic highlights
-- Implemented a stable, long-term and diversified funding structure, that together with the equity placing and the Group's strong cash generation supports continued execution of growth strategy
-- $129m invested in 2011 on 7 acquisitions in Signature and Legacy Support with annualised revenues of $75m, $37m committed to organic expansion and lease extensions
-- Strong pipeline of opportunities with significant investment capacity
Simon Pryce, BBA Aviation Chief Executive Officer, commented:
"BBA Aviation delivered another strong set of results in 2011 despite slower than anticipated market growth. The Group continued to outperform, with good operating profit conversion, strong cash generation and further progress in improving returns on invested capital. We completed seven acquisitions during the year which are integrating well and made further organic investments to extend key lease terms and support future growth.
We will continue to deliver operational improvement, to flex costs and to deploy our available capital to a strong pipeline of attractive investment and consolidation opportunities. Whilst the macro-economic climate remains uncertain, we anticipate making further progress during the year. Over the medium-term, the strengths and track record of our business together with the structural drivers of our markets give us continued confidence in the attractive growth prospects for BBA Aviation and our ability to deliver superior through-cycle returns."
BBA Aviation plc - Final Results, 2 March 2012
FINAL RESULTS 2011
Overview
BBA Aviation produced another strong set of results in 2011 with good profit conversion and strong cash generation, despite the relatively low growth environment. Our businesses made good operational progress throughout the year and we continued the effective execution of our growth strategy. We made seven acquisitions in Signature and Legacy Support during the year, for a combined consideration of $129m, and committed a further $37m to extend lease terms and for organic expansion. We implemented a stable, long-term and diversified financing structure that, together with the equity placing and the Group's strong cash generation, positions the Group well for further investment and consolidation to complement our organic growth and continued operational improvement.
As previously announced the Group's presentation currency has changed to allow for greater transparency of the underlying performance of the Group, and these are the first set of results to be presented in US dollars.
Group revenue increased by 17% to $2,136.7 million (2010: $1,833.7 million). Excluding the impact of higher fuel prices, which increased revenue by $130.7 million, revenue grew by 9%, of which 5% was organic (excluding the impact of exchange rates, fuel prices, acquisitions and disposals). Acquisitions and disposals contributed $56.5 million of additional net revenue.
Underlying operating profit increased by 16% to $198.9 million (2010: $171.4 million) due principally to increased activity across both divisions, the contribution from acquisitions and despite the inclusion in the prior year of a one-off $4.8 million pension curtailment gain. Reported operating margins were unchanged at 9.3% (2010: 9.3%) but improved by 80 basis points on a like-for-like basis after adjusting for the impact of the higher fuel prices and the pension curtailment gain.
The underlying net interest charge amounted to $28.7 million (2010: $23.6 million) with the increase due to the higher costs associated with the new bank facility and US private placement from the second quarter, partially offset by the impact of lower average net debt.
Underlying profit before tax increased by 15% to $170.2 million (2010: $147.8 million). The underlying effective tax rate was slightly lower at 20.3% (2010: 21.2%). Adjusted earnings per share improved by 6% to 29.0 cents (2010: 27.3 cents) 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 year.
Profit before tax increased by 24% to $163.6 million (2010: $132.0 million) resulting from the improvement in underlying profit before tax as outlined above, together with a reduction in pre tax exceptional items to $6.6 million (2010: $15.8 million). In addition there was an exceptional tax credit of $23.0 million (2010:$0.2 million) largely relating to the settlement of an old outstanding tax claim in Germany. Unadjusted earnings per share increased by 38% to 32.5 cents (2010: 23.6 cents).
Free cash flow of $185.8 million showed a 4% improvement over the prior year (2010: $178.6 million) with the working capital outflow experienced in the first half reversing as expected and cash conversion returning to normal levels. Cash interest payments decreased to $21.5 million (2010: $22.8 million), with the impact of the fees associated with the new bank facility and US private placement notes offset by the interest element of the German tax refund. As a result of the tax refund outlined above there was a net tax inflow of $8.5 million (2010: outflow $4.0 million).
The cash dividend payment in the year amounted to $63.7 million (2010: $25.9 million) with the increase a result of the withdrawal of the scrip dividend alternative together with the increased number of shares following the equity share placing in March 2011. The share placing raised $140.4 million in net proceeds and the new shares were largely allocated to existing shareholders. In the first half of the year we also implemented a new diversified and long-term financing structure.
Total spend on acquisitions in the year amounted to $129.1 million. In addition, we have spent or committed a further $37 million in capital expenditure to extend key lease terms and deliver additional growth. Net debt was reduced by $89.2 million to $403.6 million (2010: $492.8 million) and net debt to EBITDA was reduced to 1.5x from 2.1x at the end of 2010.
There was a further improvement in Group return on invested capital which increased to 10.6% (2010: 9.5%) due to the improved profitability together with continued capital discipline.
Business Review
Flight Support
The Flight Support division continued to make good progress. Headline revenue increased by 16% to $1,330.1 million (2010: $1,149.5 million), although higher fuel prices increased revenue by $130.7 million and the net impact of acquisitions and disposals in the division contributed an additional $21.8 million to revenue. Flight Support revenues increased by 2% on an organic basis.
Despite relatively low growth in our key markets, continued operational improvement drove an underlying operating profit improvement of 10% to $124.6 million (2010: $113.7 million), and on a constant fuel price basis operating margins improved by 50 basis points over the prior year to 9.4%.
Operating cash flow for the division improved to $189.1 million (2010: $130.7 million) with cash conversion of 152% (2010: 115%). There was a further 90 basis point improvement in return on invested capital to 10.6% (2010: 9.7%).
After 4% growth in Business and General Aviation (B&GA) movements in North America in the first half compared with the first half of 2010, year on year market activity in North America for the second half of 2011 was broadly flat. For the year as a whole North American B&GA movements grew by 2%. Signature's organic growth in North America was also 2% although this figure was impacted by our exit from the Miami and Tampa FBOs and on a like-for-like basis grew by 3%. Market activity in Europe increased by 2% for the year. Signature's reported revenue increased by 19% to $946.4 million (2010: $797.0 million).
Signature further expanded its network through acquisition adding FBOs in Bozeman, Montana; Boca Raton, Florida; San Juan and St. Maarten in the Caribbean; and two FBOs in Mobile, Alabama. Signature consolidated its position at Edinburgh, acquiring the second FBO on the airport and also commenced operations at Frankfurt Main International Airport in Germany. Since the end of the year Signature has also added an FBO in Omaha, Nebraska for a cash consideration of $3.2 million. Total acquisition spend in Signature since the start of 2011 amounts to $70.2 million. The acquisitions have been integrated effectively and are progressing as anticipated. In the second half of the year Signature divested a non-core FBO at St Louis, Missouri for $3.3 million.
Signature secured lease extensions at four locations including three sole source FBOs. In addition, it reached agreement with NetJets to build and operate a dedicated private terminal at Palm Beach International Airport which will also free up capacity at the existing FBO. There are now a total of 112 FBOs in the network globally, with 66 of these in North America.
Signature made good operational progress in the year, improving the quality of the services it provides and reducing the cost of delivery. The beneficial impact of fuel purchasing contributed $2 million to the improvement in operating profit. Signature's focus on customer service resulted in customer loyalty, which measures satisfaction, willingness to return and to recommend Signature, improving from 73% to 80%. Signature also continues to look at capital and cost effective ways of extending its network and allowing customers further opportunity to benefit from the Signature service standard. In the last quarter of 2011, it therefore launched Signature Select(TM), a programme offering independent FBOs the ability to use the Signature Select(TM) badge, systems, service and safety standards and purchasing power.
In ASIG, revenue increased by 9% to $383.7 million (2010: $352.5 million). ASIG was successful in winning a number of new contracts throughout the year supporting its 2% organic growth despite commercial movements being down 1% year-over-year for North America and Europe. ASIG also saw a very strong contribution from the SGS acquisition made in 2010, outperforming original expectations.
In 2011 ASIG launched new refuelling and fuel facility management and operations services at Klagenfurt and Linz, Austria. In the US, ASIG began refuelling and ground service operations at Orlando Sanford International Airport. ASIG also commenced a 20 year contract to provide comprehensive fuel services at Tocumen International Airport in Panama marking the company's entrance into the Latin American market.
ASIG's continued ability to provide safe and consistently reliable aircraft refuelling services resulted in a series of network wide renewals, including American Airlines and regional carrier American Eagle at 15 airports; US Airways and US Airways Express at 26 airports; and, Delta Air Lines at 24 airports. ASIG continued to build its off-airport fuel transportation logistics business by adding 19 new contracts in 2011 across Florida and California.
ASIG's ground handling business had a number of contract wins in 2011. At Orlando International Airport, ASIG commenced the provision of ambassador services to assist passengers through customs. US Airways selected ASIG at Buffalo Niagara International Airport to provide ramp handling services and TAM selected ASIG for comprehensive ground services at JFK International Airport.
Aftermarket Services and Systems
The Aftermarket Services and Systems division had a very strong year with revenue growing by 18% to $806.6 million (2010: $684.2 million) of which 12% was organic. The balance of the increase was accounted for by the acquisition of the GE Aviation Systems' fuel measurement business.
Underlying operating profit increased by 23% to $91.5 million (2010: $74.4 million) due to increased activity in ERO and Legacy Support, together with the contribution from the fuel measurement business, and despite the prior year including a one-off $4.8 million pension curtailment gain. Excluding the pension gain, operating margins improved by 110 basis points to 11.3%.
The division generated operating cash flow of $89.7 million (2010: $92.4 million) delivering cash conversion of 98% (2010: 124%). Return on invested capital increased by 160 basis points to 10.7% (2010: 9.1%).
Revenue in ERO(1) increased by 15% to $613.0 million (2010: $530.9 million), all of which was organic. With the normal six to nine month lag to flight activity, overhaul activity initially benefitted from the 10% increase in B&GA movements in North America in 2010 and whilst the rate of market growth reduced somewhat in 2011, ERO continued to see strong demand resulting from ERO's strategic emphasis on customer service and support, and innovation, together with the benefits of enhanced cross-business cooperation.
ERO continued its strategic development with field service expansion in both South America and Asia Pacific, Honeywell TFE731 major periodic inspection capabilities were brought on-line at the regional turbine centre in Brazil during the year and ERO established an regional turbine centre in Singapore which opened in early 2012.
F1RST SUPPORT(TM) , ERO's state of the art control centre for customer support, continued to lead in on-wing field service. In addition to its Dallas headquarters, ERO opened further operations control centres in Portsmouth, UK in 2011 and in Singapore in early 2012. Together the three centres establish an around-the-clock, response network providing rapid service to customers anywhere in the world on a same day basis.
Legacy Support's revenue(++) grew by 52% to $130.1 million (2010: $85.6 million) with 11% of the growth coming from organic progression, largely relating to complex landing gear sales to the US Government and the first deliveries of environmental control units for the F-15 weapons guidance system. The remaining revenue growth is related to 8 months of contribution from the GE Aviation Systems' fuel measurement business acquired in May 2011, and represents an outperformance relative to our original expectations.
The integration of the fuel measurement business is progressing well and the establishment of the Cheltenham facility, together with the existing Slough facility, strengthens the foundation for expansion of the Legacy Support licensing proposition into the United Kingdom.
Ontic obtained two new licences in the year, and the order book continued to grow to a record $103 million (2010: $65 million) including orders for the fuel measurement business which has parts on the growing Boeing 777 and Airbus A320 fleets.
Revenue in APPH declined by 6% to $63.5 million (2010: $67.7 million), with the rate of decline moderating in the second half.
Notwithstanding the reduction in activity in 2011, APPH made good progress on the OEM orders for Agusta Westland AW159 military helicopter and the BAE Systems' Hawk trainer aircraft which are due for delivery in 2012. The recent Government defence platform rationalisation has had only a limited impact on the order book and our portfolio is well balanced across civil, military and regional programmes and also from an OEM versus aftermarket perspective. APPH also moved forward with development of the landing gear for the new Saab Gripen NG fighter aircraft.
APPH remains focused on driving operational improvement, together with optimising its footprint and cost base. Accordingly, it has recently announced the possible closure of its Basingstoke facility and transfer to Runcorn of the component repair and overhaul capability required to support its in-house needs. (1) ++ 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.
Other Financial Information
Unallocated central costs were largely unchanged at $17.2 million (2010: $16.7 million).
Total exceptional items in the year amounted to a credit of $16.4 million (2010: charge $15.6 million). The exceptional items include $1.3 million in restructuring expenses (2010: $6.5 million), $3.8 million of other operating expenses relating largely to acquisition costs (2010: $3.6 million) and a $5.3 million loss on disposal of businesses (2010: $nil) relating principally to a goodwill write down following our exit from the Tampa FBO. Amortisation of acquired intangibles amounted to $7.9 million (2010: $5.7 million). There was an exceptional tax credit of $23.0 million (2010: $0.2 million) including $23.7 million relating to the settlement of an old outstanding claim in Germany, together with $11.7 million of associated interest receivable (2010: $nil). In total, exceptional items gave rise to a $30.9 million cash inflow (2010: $8.2 million outflow).
The combined accounting deficit for the UK and US pension schemes was unchanged at $53.5 million, (2010: $53.5 million). The UK defined benefit scheme showed a deficit of $14.9 million (2010: surplus $8.2 million), but a total deficit of $19.2 million has been recognised, reflecting the commitment to make deficit contribution payments as agreed on completion of the 2009 triennial valuation. The next triennial valuation is due to be undertaken during the course of 2012.
Net debt at the year-end amounted to $403.6 million (2010: $492.8 million), a reduction of $89.2 million. During the first half of the year the Group refinanced its debt facilities putting in place a $750 million bank facility with a split 3 and 5 year maturity and issuing $300 million of US private placement notes with maturities of 7, 10 and 12 years. These new debt facilities provide us with a stable, long-term and diverse financing structure with headroom to support the execution of our growth strategy. At the end of the year $550 million of the total borrowing commitments of $1,050 million remained undrawn and leverage had been reduced to 1.5x (2010: 2.1x). There was a modest reduction in interest cover to 9.1x (2010: 9.8x).
$200 million of cross currency swaps were closed out during the year at a cash cost of $39.3 million. At the end of the year the Group had outstanding $200 million and EUR50 million of cross currency swaps with a mark-to-market loss of $41.5 million. The EUR50 million swap has been closed out since the end of the year at a cash cost of $4.3 million.
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
As previously announced, consistent with the change of the Group's presentation currency to US dollars, the Group's progressive dividend policy will now be US dollar based.
At the time of the interim results, the Board declared an increased interim dividend in sterling terms of 2.52 pence per share (2010: 2.40 pence per share) equivalent to 3.99 cents per share (2010: 3.70 cents per share). The Board is now proposing a final dividend of 9.95 cents per share (2010: 9.39 cents per share), taking the dividend for the full year to 13.94 cents per share (2010: 13.09 cents per share), an increase of 6.5%.
Eligible shareholders will continue to receive their dividends in sterling, unless an election is completed and registered with the Company's registrars stating their wish to receive their dividends in US dollars by 5pm on the currency election date of 8 May 2012. The sterling dividend will be translated at the prevailing exchange rate on 9 May 2012.
Outlook
We will continue to deliver operational improvement, to flex costs and to deploy our available capital to a strong pipeline of attractive investment and consolidation opportunities. Therefore, whilst we expect the uncertain economic climate to result in a continued slow and somewhat volatile recovery in 2012, we anticipate making further progress during the year. Over the medium-term, the strengths and track record of our business together with the structural drivers of our markets give us continued confidence in the attractive growth prospects for BBA Aviation and our ability to deliver superior through-cycle returns.
Directors' Responsibilities
The responsibility statement below has been prepared in connection with the Company's full annual report for the year ending 31 December 2011. Certain parts of the annual report are not included within this announcement.
We confirm that to the best of our knowledge:
-- the financial statements, prepared in accordance with IFRSs as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit of the Company and the undertakings included in the consolidation taken as a whole; and
-- the management report, which is incorporated into the Directors' Report, includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties they face.
Signed on behalf of the Board,
Simon Pryce Mark Hoad Group Chief Executive Group Finance Director 1 March 2012 1 March 2012
This final results announcement 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 report is available in electronic format from the Company's website, www.bbaaviation.com
Consolidated Income Statement
2011 2010(2)
------------------------- ---------------------------------------- ----------------------------------------
Exceptional Exceptional
Underlying(1) Items Total Underlying(1) Items Total
$ m $m $m $m $m $m
------------------------- -------------- ------------ ---------- -------------- ------------ ----------
Revenue 2,136.7 - 2,136.7 1,833.7 - 1,833.7
Cost of sales (1,729.4) - (1,729.4) (1,481.3) - (1,481.3)
------------------------- -------------- ------------ ---------- -------------- ------------ ----------
Gross profit 407.3 - 407.3 352.4 - 352.4
Distribution costs (39.4) - (39.4) (32.6) - (32.6)
Administrative expenses (174.6) (7.9) (182.5) (155.0) (5.7) (160.7)
Other operating
income 4.6 - 4.6 5.1 - 5.1
Share of profit
of associates 2.0 - 2.0 1.7 - 1.7
Other operating
expenses (1.0) (3.8) (4.8) (0.2) (3.6) (3.8)
Restructuring costs - (1.3) (1.3) - (6.5) (6.5)
Loss on disposal
of businesses - (5.3) (5.3) - - -
------------------------- -------------- ------------ ---------- -------------- ------------ ----------
Operating profit 198.9 (18.3) 180.6 171.4 (15.8) 155.6
Investment income 10.7 11.7 22.4 6.5 - 6.5
Finance costs (39.4) - (39.4) (30.1) - (30.1)
------------------------- -------------- ------------ ---------- -------------- ------------ ----------
Profit before tax 170.2 (6.6) 163.6 147.8 (15.8) 132.0
Tax (34.5) 23.0 (11.5) (31.5) 0.2 (31.3)
------------------------- -------------- ------------ ---------- -------------- ------------ ----------
Profit for the year 135.7 16.4 152.1 116.3 (15.6) 100.7
------------------------- -------------- ------------ ---------- -------------- ------------ ----------
Attributable to:
Equity holders of
the parent 136.0 16.4 152.4 116.5 (15.6) 100.9
Non controlling
interest (0.3) - (0.3) (0.2) - (0.2)
------------------------- -------------- ------------ ---------- -------------- ------------ ----------
135.7 16.4 152.1 116.3 (15.6) 100.7
------------------------- -------------- ------------ ---------- -------------- ------------ ----------
(1) Before exceptional items. Exceptional items are items which are material or are non-recurring in nature, costs relating to acquisitions and the amortisation of acquired intangibles.
(2) All amounts presented in respect of prior years have been restated to reflect the change in presentation currency as set out in the accounting policies.
Earnings per share Adjusted Unadjusted Adjusted Unadjusted Basic 29.0c 32.5c 27.3c 23.6c -------------------- ---------- ------------ ---------- ------------ Diluted 28.3c 31.7c 26.4c 22.8c -------------------- ---------- ------------ ---------- ------------
Consolidated Statement of Comprehensive Income
2011 2010
$m $m
--------------------------------------------------- ------- -------
Profit for the period 152.1 100.7
Other comprehensive income
Exchange difference on translation of foreign
operations (2.0) 17.1
Losses on net investment hedges (1.9) (34.8)
Fair value movements in foreign exchange
cash flow hedges (1.4) (4.5)
Transfer to profit or loss from equity on
foreign exchange cash flow hedges 2.4 5.6
Fair value movement in interest rate cash
flow hedges (3.5) (19.7)
Transfer to profit or loss from equity on
interest rate cash flow hedges 6.2 10.4
Actuarial losses on defined benefit pension
schemes (16.7) (10.9)
Tax relating to components of other comprehensive
income 5.5 2.0
--------------------------------------------------- ------- -------
Total comprehensive income for the period 140.7 65.9
--------------------------------------------------- ------- -------
Attributable to:
Shareholders of BBA Aviation plc 141.0 66.1
Non-controlling interests (0.3) (0.2)
--------------------------------------------------- ------- -------
140.7 65.9
--------------------------------------------------- ------- -------
Consolidated Balance Sheet
31 December 31 December
2011 2010
$m $m
----------------------------------------------------- ------------ ------------
NON-CURRENT ASSETS
Goodwill 806.6 761.5
Licences and other intangible assets 176.2 149.2
Property, plant and equipment 517.4 514.2
Interests in associates 4.2 3.0
Trade and other receivables 43.2 25.9
----------------------------------------------------- ------------ ------------
1,547.6 1,453.8
----------------------------------------------------- ------------ ------------
CURRENT ASSETS
Inventories 233.9 213.8
Trade and other receivables 353.5 310.5
Cash and cash equivalents 125.1 169.1
Tax recoverable 0.4 0.1
----------------------------------------------------- ------------ ------------
712.9 693.5
----------------------------------------------------- ------------ ------------
Total assets 2,260.5 2,147.3
----------------------------------------------------- ------------ ------------
CURRENT LIABILITIES
Trade and other payables (427.1) (398.9)
Tax liabilities (86.1) (79.0)
Obligations under finance leases (1.5) (1.4)
Bank loans and overdrafts (23.7) (155.0)
Provisions (1.1) (1.4)
----------------------------------------------------- ------------ ------------
(539.5) (635.7)
----------------------------------------------------- ------------ ------------
Net current assets 173.4 57.8
----------------------------------------------------- ------------ ------------
NON-CURRENT LIABILITIES
Bank loans (519.7) (501.1)
Other payables due after one year (62.8) (98.6)
Retirement benefit obligations (53.5) (53.5)
Obligations under finance leases (2.9) (4.4)
Deferred tax liabilities (73.6) (66.3)
Provisions (28.8) (30.3)
----------------------------------------------------- ------------ ------------
(741.3) (754.2)
----------------------------------------------------- ------------ ------------
Total liabilities (1,280.8) (1,389.9)
----------------------------------------------------- ------------ ------------
Net assets 979.7 757.4
----------------------------------------------------- ------------ ------------
EQUITY
Share capital 250.1 228.6
Share premium account 732.4 612.1
Other reserves 6.9 6.9
Treasury reserve (9.0) (9.7)
Capital reserve 39.2 37.2
Hedging and translation reserves (55.8) (55.5)
Retained earnings 19.8 (58.1)
----------------------------------------------------- ------------ ------------
Equity attributable to shareholders of BBA Aviation
plc 983.6 761.5
Non-controlling interest (3.9) (4.1)
----------------------------------------------------- ------------ ------------
Total equity 979.7 757.4
----------------------------------------------------- ------------ ------------
Consolidated Cash Flow Statement
2011 2010
$m $m
-------------------------------------------------- --- -------- --------
Operating activities
Net cash inflow from operating activities 235.6 235.0
Investing activities
Dividends received from associates 1.0 1.7
Purchase of property, plant and equipment (38.5) (31.6)
Purchase of intangible assets (5.4) (11.5)
Proceeds from disposal of property, plant
and equipment 14.6 7.8
Acquisition of subsidiaries (128.7) (5.6)
Proceeds from disposal of business 3.3 -
Investment in associates (0.2) -
Deferred consideration paid on prior year
acquisitions (0.4) (2.0)
Net cash outflow from investing activities (154.3) (41.2)
------------------------------------------------------- -------- --------
Financing activities
Interest received 18.0 5.4
Interest paid (39.0) (27.6)
Interest element of finance leases paid (0.5) (0.6)
Dividends paid (63.7) (25.9)
Outflow from realised foreign exchange contracts (41.2) (0.8)
Proceeds from issue of own shares 141.9 0.2
Issue of loan notes 300.0 -
Purchase of own shares - (4.2)
Decrease in loans (411.4) (149.9)
Decrease in finance leases (1.4) (1.4)
Decrease in overdrafts (19.6) (8.2)
------------------------------------------------------- -------- --------
Net cash outflow from financing activities (116.9) (213.0)
------------------------------------------------------- -------- --------
Decrease in cash and cash equivalents (35.6) (19.2)
Cash and cash equivalents at beginning of
year 169.1 185.8
Exchange adjustments (8.4) 2.5
Cash and cash equivalents at end of year 125.1 169.1
------------------------------------------------------- -------- --------
Net debt at beginning of year (492.8) (630.5)
Increase in cash equivalents (35.6) (19.2)
Decrease in loans 111.4 149.9
Decrease in finance leases 1.4 1.4
Decrease in overdrafts 19.6 8.2
Exchange adjustments (7.6) (2.6)
------------------------------------------------------- -------- --------
Net debt at end of year (403.6) (492.8)
------------------------------------------------------- -------- --------
Consolidated Statement of Changes in Equity
Share Share Retained Other Non-controlling Total
capital premium earnings reserves interests equity
$m $m $m $m $m $m
------------------------------------- --------- --------- ---------- ---------- ---------------- --------
Balance at 1 January 2010 224.6 615.9 (124.9) 7.0 (2.5) 720.1
Total comprehensive income
for the period - - 91.8 (25.9) (0.2) 65.7
Equity dividends - - (25.9) - - (25.9)
Issue of share capital and
scrip dividend 4.0 (3.8) - - - 0.2
Movement on treasury reserve - - - (4.2) - (4.2)
Credit to equity for equity-settled
share-based payments - - - 3.7 - 3.7
Changes in non-controlling
interests - - (0.8) - (1.4) (2.2)
Transfer to retained earnings - - 1.7 (1.7) - -
------------------------------------- --------- --------- ---------- ---------- ---------------- --------
Balance at 1 January 2011 228.6 612.1 (58.1) (21.1) (4.1) 757.4
Total comprehensive income
for the period - - 141.2 (0.3) (0.3) 140.6
Equity dividends - - (63.7) - - (63.7)
Issue of share capital and
scrip dividend 21.5 120.3 - - - 141.8
Movement on treasury reserve - - - (1.3) - (1.3)
Credit to equity for equity-settled
share-based payments - - - 4.4 - 4.4
Changes in non-controlling
interests - - - - 0.5 0.5
Transfer to retained earnings - - 0.4 (0.4) - -
------------------------------------- --------- --------- ---------- ---------- ---------------- --------
Balance at 31 December 2011 250.1 732.4 19.8 (18.7) (3.9) 979.7
------------------------------------- --------- --------- ---------- ---------- ---------------- --------
Basis of preparation
The preliminary results for the year ended 31 December 2011 are an abridged statement of the full annual report which was approved by the Board of Directors on 1 March 2012. The consolidated financial statements within the full annual report are prepared in accordance with International Financial Reporting Standards (IFRS) adopted for use in the European Union and therefore comply with Article 4 of the EU IAS Regulation. They have also been prepared in accordance with IFRS as issued by the International Accounting Standards Board.
The auditor's report on those consolidated financial statements was unqualified, did not draw attention to any matters by way of emphasis without qualifying their report, and did not contain statements under s498(2) or (3) of the Companies Act 2006. The preliminary results do not comprise statutory accounts within the meaning of section 434(3) of the Companies Act 2006. The annual report for the year ended 31 December 2011 will be delivered to the registrar of Companies following the Company's annual general meeting to be held on 24 April 2012.
The financial information included in this preliminary announcement does not contain sufficient information to comply with IFRS. The Company will publish full financial statements that comply with IFRS in March 2012.
The financial information included in this preliminary announcement has been prepared in accordance with the accounting policies set out in the financial statements for the year ended 31 December 2010, except where identified below. A number of interpretations and amendments to accounting standards became effective during the financial year; none of which had a material effect on the Group's results.
During the year, the Group changed the currency in which it presents its consolidated financial statements from pounds sterling to US dollars. A change in presentation currency is a change in accounting policy which is accounted for retrospectively. Statutory financial information included in the Group's Annual report and accounts for the year ended 31 December 2010 previously reported in sterling has been restated into US dollars using the procedures outlined below:
-- Assets and liabilities denominated in non-US dollar currencies were translated into US dollars at the closing rates of exchange on the relevant balance sheet date;
-- Non-US dollar income and expenditure were translated at the average rates of exchange prevailing for the relevant period;
-- The cumulative hedging and translation reserves were set to nil at 1 January 2004, the date of transition to IFRS, and these reserves have been restated on the basis that the group has reported in US dollars since that date. Share capital, share premium and the other reserves were translated at the historic rates prevailing at 1 January 2004, and subsequent rates prevailing on the date of each transaction;
-- All exchange rates were extracted from the Group's underlying financial records.
As a consequence of this change in accounting policy, the Group's consolidated financial statements contain balance sheet information for the two comparative years 31 December 2010 and 2009.
The exchange rates of the US dollar to pounds sterling over the periods presented in this Annual Report are as follows:
US$ / GBP exchange rate Year ended Year ended Year ended
31 December 31 December 31 December
2011 2010 2009
-------------------------- ------------- ------------- -------------
Closing rate 1.55 1.57 1.61
Average rate 1.60 1.55 1.56
Notes to the financial statements
1 Segmental analysis
Aftermarket
Flight Services Unallocated
2011 Support and Systems Total Corporate Total Continuing
Business Segments $m $m $m $m $m
------------------------------- --------- ------------- -------- ------------ -----------------
External revenue 1,330.1 806.6 2,136.7 - 2,136.7
Underlying operating
profit 124.6 91.5 216.1 (17.2) 198.9
Exceptional items (13.3) (3.1) (16.4) (1.9) (18.3)
------------------------------- --------- ------------- -------- ------------ -----------------
Segment result 111.3 88.4 199.7 (19.1) 180.6
Underlying operating
margin 9.4% 11.3% 10.1% - 9.3%
Other information
Capital additions(1) 24.1 19.8 43.9 - 43.9
Depreciation and amortisation 46.5 22.0 68.5 0.3 68.8
------------------------------- --------- ------------- -------- ------------ -----------------
Balance sheet
Total assets 1,246.6 804.7 2,051.3 209.2 2,260.5
Total liabilities (199.3) (166.6) (365.9) (914.9) (1,280.8)
------------------------------- --------- ------------- -------- ------------ -----------------
Net assets/(liabilities) 1,047.3 638.1 1,685.4 (705.7) 979.7
------------------------------- --------- ------------- -------- ------------ -----------------
(1) Capital additions represent cash expenditures in the year
Aftermarket
Flight Services Unallocated
2010 Support and Systems Total Corporate Total Continuing
Business Segments $m $m $m $m $m
------------------------------- --------- ------------- -------- ------------ -----------------
External revenue 1,149.5 684.2 1,833.7 - 1,833.7
Underlying operating
profit 113.7 74.4 188.1 (16.7) 171.4
Exceptional items (8.2) (6.7) (14.9) (0.9) (15.8)
------------------------------- --------- ------------- -------- ------------ -----------------
Segment result 105.5 67.7 173.2 (17.6) 155.6
Underlying operating
margin 9.9% 10.9% 10.3% - 9.3%
Other information
Capital additions(1) 15.5 27.6 43.1 - 43.1
Depreciation and amortisation 46.0 19.1 65.1 0.3 65.4
------------------------------- --------- ------------- -------- ------------ -----------------
Balance sheet
Total assets 1,240.6 721.1 1,961.7 185.6 2,147.3
Total liabilities (180.2) (154.6) (334.8) (1,055.1) (1,389.9)
------------------------------- --------- ------------- -------- ------------ -----------------
Net assets/(liabilities) 1,060.4 566.5 1,626.9 (869.5) 757.4
------------------------------- --------- ------------- -------- ------------ -----------------
1 Segmental analysis - continued
Revenue Revenue Capital Non-current
by destination by origin additions assets
Geographical segments $m $m $m $m
----------------------- ---------------- ----------- ----------- ------------
2011
United Kingdom 290.1 404.5 8.7 236.6
Mainland Europe 138.9 50.4 0.3 43.1
North America 1,593.6 1,676.5 34.9 1,262.2
Rest of world 114.1 5.3 - 5.7
----------------------- ---------------- ----------- ----------- ------------
Total 2,136.7 2,136.7 43.9 1,547.6
----------------------- ---------------- ----------- ----------- ------------
2010
United Kingdom 218.1 332.3 14.7 161.7
Mainland Europe 134.4 44.0 0.3 45.4
North America 1,389.6 1,452.2 28.1 1,240.3
Rest of world 91.6 5.2 - 6.4
----------------------- ---------------- ----------- ----------- ------------
Total 1,833.7 1,833.7 43.1 1,453.8
----------------------- ---------------- ----------- ----------- ------------
An analysis of the Group's revenues for the year is as follows:
Revenue from
Revenue from sale of goods services
---------------------------------------------------- ----------------
2011 2010 2011 2010
$m $m $m $m
---------------------------------- -------- ------ -------- ------
Flight Support 817.6 668.3 512.5 481.2
Aftermarket Services and Systems 229.6 184.6 577.0 499.6
---------------------------------- -------- ------ -------- ------
1,047.2 852.9 1,089.5 980.8
---------------------------------- -------- ------ -------- ------
2 Net capital expenditure
2011 2010
$m $m
---------------------------------------------- --- ----- -----
Net capital expenditure 29.3 35.3
--------------------------------------------------- ----- -----
Net cash capital expenditure to depreciation
- times 0.5 0.6
--------------------------------------------------- ----- -----
3 Number of employees
2011 2010
---------------- ------- -------
At 31 December 10,415 10,049
---------------- ------- -------
4 Earnings per share
The calculation of the basic and diluted earnings per share is based on the following data
2011 2010
$m $m
-------------------------------------------------------- ------- ------
Basic:
Earnings
Profit for the period 152.1 100.7
Non-controlling interests 0.3 0.2
-------------------------------------------------------- ------- ------
Basic earnings attributable to ordinary shareholders 152.4 100.9
Exceptional items (net of tax) (16.4) 15.6
-------------------------------------------------------- ------- ------
Adjusted earnings 136.0 116.5
-------------------------------------------------------- ------- ------
Diluted:
Earnings
Diluted earnings attributable to ordinary shareholders 152.4 100.9
Exceptional items (net of tax) (16.4) 15.6
-------------------------------------------------------- ------- ------
Adjusted diluted earnings 136.0 116.5
-------------------------------------------------------- ------- ------
Number of shares
Weighted average number of 29 16/21p ordinary shares:
For basic earnings per share 468.6 427.7
Exercise of share options 12.8 14.0
------------------------------------------------------- ------ ------
For diluted earnings per share 481.4 441.7
------------------------------------------------------- ------ ------
Earnings per share:
Basic:
Adjusted 29.0c 27.3c
Unadjusted 32.5c 23.6c
Diluted:
Adjusted 28.3c 26.4c
Unadjusted 31.7c 22.8c
Adjusted earnings per share is shown calculated as earnings before exceptional items because the directors consider that this gives a useful indication of underlying performance.
5 Income tax expense
2011 2010
$m $m
-------------------------------------------------- ------- ------
Current tax 24.3 19.4
Adjustments in respect of prior years - current
tax (23.3) (7.0)
Deferred tax 8.4 12.3
Adjustments in respect of prior years - deferred
tax 2.1 6.6
-------------------------------------------------- ------- ------
Income tax expense for the year 11.5 31.3
-------------------------------------------------- ------- ------
6 Cash flow from operating activities
2011 2010
$m $m
----------------------------------------------- ------- -------
Operating profit 180.6 155.6
Share of profit from associates (2.0) (1.7)
----------------------------------------------- ------- -------
Profit from operations 178.6 153.9
Depreciation of property, plant and equipment 53.0 52.1
Amortisation of intangible assets 15.8 13.3
Profit on sale of property, plant and
equipment (2.4) (4.6)
Share-based payment expense 5.6 3.1
Decrease in provisions (1.5) (1.7)
Pension scheme payments (14.1) (5.4)
Other non-cash items 0.9 (0.6)
Unrealised foreign exchange movements (1.9) 4.3
Non-cash impairments 0.7 -
Loss on disposal of businesses 4.6 -
----------------------------------------------- ------- -------
Operating cash inflows before movements
in working capital 239.3 214.4
(Increase)/decrease in working capital (12.2) 24.6
----------------------------------------------- ------- -------
Cash generated by operations 227.1 239.0
Income taxes received/(paid) 8.5 (4.0)
----------------------------------------------- ------- -------
Net cash inflow from operating activities 235.6 235.0
----------------------------------------------- ------- -------
Dividends received from associates 1.0 1.7
Purchase of property, plant and equipment (38.5) (31.6)
Purchase of intangible assets (5.4) (11.5)
Proceeds from disposal of property, plant
and equipment 14.6 7.8
Interest received 18.0 5.4
Interest paid (39.0) (27.6)
Interest element of finance leases paid (0.5) (0.6)
----------------------------------------------- ------- -------
Free cash flow 185.8 178.6
----------------------------------------------- ------- -------
7 Exceptional items
Exceptional items included within profit before tax amounted to a charge of $6.6 million (2010: charge of $15.8 million).
In the year ended 31 December 2011, exceptional items amounting to a charge of GBP18.3 million are included within operating profit, and include restructuring expenses of $1.3 million; amortisation of intangible assets acquired and valued in accordance with IFRS 3 of $7.9 million included within administrative expenses; $3.2 million of acquisition costs included within other operating expenses; and a $5.3 million loss on disposal of business relating principally to a goodwill writedown following the exit from the Tampa FBO.
In addition, the Group received an exceptional tax refund of $23.7 million included within the exceptional tax credit, relating to the settlement of an old outstanding tax claim in Germany, together with associated exceptional interest receivable of $11.7 million.
In the year ended 31 December 2010, administrative expenses of $5.7 million related to amortisation of intangible assets acquired and valued in accordance with IFRS 3. Restructuring costs of $6.5 million were associated primarily with the closure of APPH Bolton of $3.9 million and severance costs at Dallas Airmotive of $2,3 million. Other operating expenses of $3.6 million includes acquisition costs of $2.3 million of which $2.2 million related to acquisitions made in prior years, and other costs of $1.3 million which include costs related to businesses previously disposed of.
8 Acquisitions and disposals
During the year the group made a number of acquisitions in both its Signature Flight Support and Legacy Support divisions.
Signature Flight Support purchased six businesses for a total initial consideration of $65.8 million, which expanded the network with a total of seven additional FBOs in Bozeman, Montana; Edinburgh, UK; San Juan, Puerto Rico; Boca Raton, Florida; St Maarten in the Caribbean and two FBOs in Mobile, Alabama. The fair value of the net assets acquired has been initially assessed as a total of $45.7 million, with goodwill of $26.4 million arising on acquisition.
Legacy Support acquired the business and certain assets of the GE Aviation Systems Limited fuel management and fuel measurement systems business, based in Cheltenham in the UK, for a consideration of $60.8 million. The fair value of the net assets acquired has been initially assessed as a total of $79.0 million, with associated goodwill of $53.9 million arising on acquisition.
In the period from the date of acquisition to 31 December 2011, the acquired business generated an aggregate total revenue and operating profit of $47.7 million and $7.6 million respectively.
On 1 July 2011, the group disposed of an FBO based in St. Louis, Missouri for a consideration of $3.3 million, resulting in a profit on disposal of $0.4 million.
After the year end, on 6 January 2012, the Group acquired substantially all the assets of Elliot Aviation of Omaha, Inc, a FBO operator in Omaha, Nebraska for a consideration of $3.2 million.
9 Retirement obligations
The defined benefit obligation at 31 December 2011 for the UK Income and Protection Plan is estimated based on the latest actuarial valuation at 31 March 2009, with assumptions updated to reflect market conditions at 31 December 2011 where appropriate. The defined benefit plan assets have been updated to reflect their market value as at 31 December 2011. The Groups foreign retirement obligations relate to a number of funded final salary defined benefit pension arrangements in North America. Pension costs are calculated by independent qualified actuaries, using the projected unit method and assumptions appropriate to the arrangements in place.
As at 31 December 2011 the update of the actuarial valuations of the UK and US schemes indicates a net deficit of $49.2 million (2010: $29.5 million), which when combined with the minimum funding liability recognised in accordance with IFRIC 14, of $4.3 million (2010: $24.0 million) gives a combined liability recognised on the balance sheet of $53.5 million (2010: $53.5 million).
The next triennial valuation of the UK scheme is due to be undertaken during the course of 2012.
10 Dividends
The directors recommend the payment of a final dividend of 9.95c per ordinary share on 25 May 2012 to shareholders on the register at the close of business on 20 April 2012. This dividend is subject to approval by shareholders at the Annual General Meeting and in accordance with IAS 10 "Events after the reporting period" has not been included as a liability in these financial statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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