BBA Aviation PLC BBA Aviation plc - Trading Update (7318N)

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RNS Number : 7318N

BBA Aviation PLC

11 May 2018

11 May 2018

Trading update

In advance of its Annual General Meeting today, BBA Aviation ("the Group"), a market-leading provider of global aviation support and aftermarket services, is pleased to announce a trading update for the period 1 January to 30 April 2018, unless otherwise stated.

The Group's trading performance remains in line with expectations, with revenue for the period up 9.7% year-on year, reflecting good organic growth in Signature. On a like-for-like basis (constant currency, adjusting for fuel prices and before acquisitions) revenue was up 2.9%.

In Flight Support, Signature revenues for the period to end of April grew 13.9% and on a like-for-like basis (constant currency, adjusting for higher fuel prices) were up 5.5%. For the three months to 31 March 2018 US B&GA flight movements grew 2.6% and Signature like-for-like revenue growth was 4.7%. Our market outperformance reflects the momentum from the commercial negotiations concluded around the middle of 2017; this outperformance, compared to US B&GA market movements, is expected to moderate as comparatives strengthen in the second half. The US B&GA market was weaker than expected during the first quarter as weather impacted flight movements, particularly in January and March.

We continue to invest in our Signature network, including recent investments in new technology to enhance our fuel and non-fuel revenue management capabilities. Signature has recently secured a significant lease term extension with a new 20-year lease (with a possible five-year extension) at its sole source FBO at Hartsfield Jackson Atlanta International Airport. Here, at what is the world's busiest hub airport, we will invest in a new FBO facility and will launch our first Signature Elite(TM) service in the US (private transfers to/from commercial flights via Signature's B&GA FBO facilities). We also continue to explore Signature Select(TM) growth opportunities.

In Aftermarket Services, revenue declined 0.5% and on a like-for-like basis was down 3.8%. In the first four months of the financial year Ontic has been impacted by the phasing of its revenues, against a strong prior year comparative, but continues to see a strong pipeline of future growth opportunities and is expected to perform in line with expectations for the full year.

Ontic has recently signed a new licensing agreement with Honeywell for cockpit LCD displays on multiple commercial, military fixed-wing and rotorcraft platforms. We are also pleased to sign a first product licence with Engine Control Services (part of United Technologies Aerospace Systems) for the manufacturing and aftermarket support for military fuel control products. This product line will transition into our Cheltenham facility during this first half of the year.

Our ERO business has continued to perform well during the period with revenues flat compared to the prior year, continuing the stable trend seen over the second half of last year. The strategic review of ERO, which we announced on 1 March 2018, is ongoing and we expect to update the market in due course.

As recently announced, the Group has refinanced its $650 million unsecured multicurrency revolving credit facility (RCF) which was due to mature in April 2019, with a new facility which will expire in March 2023. The new RCF has been agreed predominantly with the Group's existing lenders with an overall weighted average interest cost in line with the previous facility. We have also recently issued our inaugural $500m senior unsecured notes due 2026 at 5.375%. This gives the Group a diversified debt structure with an extended maturity profile to align better with the long-term nature of the assets being financed and support future growth.

Mark Johnstone, BBA Aviation CEO commented "Momentum in the Group continues with market outperformance in Signature, building our non-fuel services, the extension of our lease term at Hartsfield Jackson Atlanta International Airport and the acquisition of new Ontic licences. We are pleased to have concluded the refinancing of the Group and have the capital structure in place to execute on our strategy. The outlook for the full year remains unchanged."

Notes:

The Group will publish its interim results for the half year ended 30 June 2018 on 1 August 2018.

Enquiries:

BBA Aviation plc

David Crook, Group Finance Director

Kate Moy, Head of Investor Relations and Communications

[phone]

Tulchan Communications

Toby Bates

[phone]

Information on BBA Aviation plc

BBA Aviation plc is a market leading, global aviation support and aftermarket services provider, primarily focused on servicing the Business and General Aviation (B&GA) market. We support our customers through three principal businesses: Signature Flight Support and Signature TECHNICAir(TM) which provide premium, full service flight and home base support including refuelling, ground handling and MRO services through the world's largest fixed base operation (FBO) network for B&GA users with around 200 locations covering key destinations in North America, Europe, South America, Caribbean, Africa and Asia. Ontic is a leading provider of high-quality equipment and cost-effective solutions for the continuing support of maturing and legacy aerospace platforms with locations in the USA, Europe and Asia. Engine Repair & Overhaul/Global Engine Services is a leading independent engine service provider to global B&GA operators, the rotorcraft market and regional airline fleets with locations in the USA, Europe, South America, Asia and the Middle East. For more information, please visit www.bbaaviation.com

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May 11, 2018 02:00 ET (06:00 GMT)