BBA still facing headwinds

BBA Aviation, the aviation support services provider, saw no pick-up in its major markets in the third quarter, with the only glimmer of hope being the fact that the rate of decline slowed some.

BBA Aviation, the aviation support services provider, saw no pick-up in its major markets in the third quarter, with the only glimmer of hope being the fact that the rate of decline slowed some.

Group revenue was down 3% in the third quarter from a year earlier.

North American Business and General Aviation (B&GA) movements were down 1% year-on-year in the third quarter, which was a slight improvement on the rate of decline seen in the first half of 2011. In Europe B&GA movements were down 4%.

Commercial movements in North America declined by 2% in the third quarter, again lower than the decline seen in the first half.

Revenue in Flight Support was more or less flat, year-on-year, but declined 2% on an underlying basis after excluding the impact of exchange rates, fuel prices and acquisitions & disposals. BBA's Signature division outperformed its markets and the ASIG unit continues to pull in the contracts, but ASIG also suffered during the reporting period from the timing of previously announced contract losses.

Revenue in Aftermarket Services and Systems declined by 7%, reducing the year-to-date gain to 6%, or 3% on an organic basis. The third quarter reduction reflected the timing of product delivery in Legacy and Engine Repair and Overhaul together with the lag effect of the softening in B&GA markets since mid-2011. The impact of revenue reduction in Aftermarket Services and Systems was broadly offset by margin progression, the group said.

As if things were not tough enough, the group's Flight Support businesses in the north-east of the US have been affected by disruption caused by Hurricane Sandy. Luckily, the group's facilities were broadly untouched and the disruption is expected to have only a limited impact on full year performance.

"In soft and somewhat volatile markets, BBA Aviation continues to perform well, benefiting from its inherently flexible cost base and our focus on driving operational improvement. Notwithstanding the challenging near-term environment, the medium and long term growth prospects remain exciting, and we continue to expect to make progress in the second half of the year and beyond," said Simon Pryce, Chief Executive of BBA Aviation.

JH

Recommended

The ten highest dividend yields in the FTSE 100
Income investing

The ten highest dividend yields in the FTSE 100

Rupert Hargreaves takes a look at the companies with the highest dividend yields in the UK’s blue-chip index
23 Jan 2023
The top ten dividend stocks in the FTSE 250
Share tips

The top ten dividend stocks in the FTSE 250

The average FTSE 250 dividend yield is around 4%, but many stocks yield much more. Rupert Hargreaves picks the best FTSE 250 stocks for income investo…
17 Jan 2023
The top funds to invest in
Funds

The top funds to invest in

As market volatility and recessionary fears continue, here are the most popular funds, stocks and trusts investors are putting their money into accord…
5 Jan 2023
Investing trends to watch out for in 2023: what analysts say
Investment strategy

Investing trends to watch out for in 2023: what analysts say

What are sensible strategies for high inflationary times? We ask analysts to find out.
22 Dec 2022

Most Popular

Council tax increases 2023 – how much more will you pay?
Tax

Council tax increases 2023 – how much more will you pay?

Your council tax bill will go up in April - we reveal the councils that have confirmed what this year’s increase will be.
23 Jan 2023
Will energy prices go down in 2023?
Personal finance

Will energy prices go down in 2023?

Wholesale gas prices are on a downward trajectory, but does this mean lower energy bills later this year?
27 Jan 2023
When will interest rates go up?
UK Economy

When will interest rates go up?

New interest rates will be announced on 2 February – we look at what to expect.
26 Jan 2023