FTSE 250-listed global aviation services BBA Aviation has beaten some analysts' expectations by posting an underlying pre-tax profit of 163m dollars for the full year ended on December 31st.
The underlying results, which were presented alongside the group's statutory results, represented the group's financial results before exceptional items.
Pre-tax profit contracted 20% to $130.30m in BBA Aviation's statutory results.
Try 6 free issues of MoneyWeek today
Get unparalleled financial insight, analysis and expert opinion you can profit from.
Start your trial
Sign up for MoneyWeek’s free twice-daily newsletter.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Group revenue rose by two per cent to $2.2bn. Of this, $15.3m was the result of increased fuel prices while $56.5m came from acquisitions, net of disposals.
Latest Videos FromMoneyWeek
The underlying operating profit excluding the impact of exceptional items declined $3.5m or 2.0% to $195.4m and and group operating margin declined to 9.0%.
Adjusting for higher fuel prices, underlying margins were 9.0%. The group reported that the decline in operating profits and margins was principally due to weaker de-icing when compared to a normal de-icing season and to 2011.
Simon Pryce, BBA Aviation Chief Executive Officer, said: "BBA Aviation had another year of operational improvement, structural cost reduction and strategic progress in 2012, together with good cash conversion against a backdrop of softer than anticipated markets throughout the year and a weak de-icing season.
"Our major markets are broadly stable despite the subdued, global macroeconomic backdrop. Although we have yet to see any material effect on B&GA flying, and the potential impact of sequestration is uncertain, the economic indicators in the US are slowly beginning to improve."
Analyst view: West House Securities says results are "ahead of our expectations"Kevin Fogarty, an analyst at West House Securities, said BBA Aviation's results were "ahead of our expectations at most levels".
He said: "[The] results demonstrate an increasing contribution from both BBAs early and late cycle activities indicating the recovery looks to be spreading to both its key activities.
"We see scope for at least a 5.0% upgrade to our estimates for FY 2013 which is likely to prompt an upward revision to our target price, but require greater confidence over a recovery in flying activity this year to justify moving our recommendation from neutral," he added.
BBA Aviation's share price was up 2.27% to 261.10p at 10:47 on Friday.
MF
