BBA Aviation’s Underlying Earnings Fall as Costs Rise in First Half

BBA Aviation (BBA.L), a British aviation services group, said early on Monday that a fall in its first-half underlying earnings as higher costs ate into sales was “in-line” with its expectations.

Reported sales from continuing operations rose to $1.26 billion during the six months that ended June 30, from $1.02 billion a year ago, the London-based firm said in its earnings statement. Group turnover includes a $230.2 million contribution from the acquisition of fuel services supplier EPIC Aviation last year. Organic growth in the group’s flagship unit Signature was 1.0%.

Underlying adjusted basic earnings per share slid by 3% to 11.3 cents, versus 11.7 cents a year ago, as cost of sales rose alongside an increase in administrative expenses. On a statutory basis, the company reported a 43.1% plunge in basic earnings per share to 3.7 cents, from 6.5 cents a year ago, reflecting “higher exceptional and other item charges.”

“The first half has been broadly in line with our expectations, with a solid Signature performance, in a flat B&GA [business and general aviation] market,” Group Chief Executive Mark Johnstone said in the statement.

Looking forward, the company, which announced the sale of its aviation parts and maintenance business Ontic for $1.37 billion last week, said Signature was focused on maintaining its level of performance against the US business and general aviation market in the second half.

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