Bba Share Price (BBA)

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.

BBA Aviation: Westhouse Securities downgrades to neutral.

Outlook Consistent with the subdued macroeconomic backdrop, we do not now anticipate any material improvement in markets in the second half, however with fewer headwinds and continued operational improvements we expect to make progress in the second half of the year and beyond. Our acquisition pipeline remains strong and the medium-term indicators continue to support the exciting growth potential in our markets which, together with the underlying strengths of BBA Aviation's businesses give us continued confidence in our ability to generate superior through-cycle returns.

Simon Pryce, BBA Aviation Chief Executive Officer, commented: "In soft markets, BBA Aviation made further operational progress in the first half of 2012. Flight Support performed well given North American and European market weakness and an unusually poor de-icing season and Aftermarket delivered another six months of strong growth. The Group generated good cash flow and made positive strategic progress. Consistent with the subdued macroeconomic backdrop, we do not now anticipate any material improvement in markets in the second half, however with fewer headwinds and continued operational improvements we expect to make progress in the second half of the year and beyond. Our acquisition pipeline remains strong and the medium-term indicators continue to support the exciting growth potential in our markets which, together with the underlying strengths of BBA Aviation's businesses give us continued confidence in our ability to generate superior through-cycle returns."

Aftermarket Services and Systems (45% of Group EBIT) · Strong organic growth of 11% · ERO: continued strong demand for engine overhaul services, extension of field service capability · Legacy Support: successful integration of fuel measurement business, order book increased by 12% · APPH: operational improvements being delivered, successful start-up to the AW159 programme Continued strategic progress · Further strategic progress: expansion of Signature network and two new Signature Select locations; ASIG C$27m acquisition of PLH Aviation Services and Dryden Air Services announced today; further Aftermarket authorisations secured · Strong pipeline of consolidation opportunities with significant investment capacity available to deploy, maintaining strict value discipline

Overview · A challenging first half with soft markets: US B&GA market down 1%; commercial aviation market down 3% · Strong growth in Aftermarket Services and Systems · Improved efficiencies driving operational progress · Interim dividend increased by 5% to 4.20¢ Operational highlights Flight Support (55% of Group EBIT) · Organic revenue decline 7%, 2% decline ex de-icing and FBO exits · De-icing impact on operating profit accentuated by a strong prior year comparator · Signature: further network expansion · ASIG: expanded service offering, effective labour flexing