(Alliance News) - FTSE 250-listed aviations services provider BBA Aviation PLC on Monday reported a sharp rise in profit in the first half but attributed the growth to switching accounting methods.
In the six months to June 30, BBA saw pretax profit rise 22% to USD156.0 million from USD128.2 million the year before.
Underlying profit, on a pre-IFRS 16 basis, grew 5.3% to USD190.0 million, with the company attributing the growth to its fixed base operation business, Signature, outperforming the US business & general aviation market.
Revenue increased 20% to USD1.53 billion from USD1.28 billion the year before.
BBA Aviation upped its interim dividend by 5.0% to 4.20 US cents compared to the 4.0 cents distributed the year before.
"The first half of 2019 has been broadly in line with our expectations for BBA Aviation, with a solid Signature performance, in a flat business & general aviation market. Our Ontic legacy business has delivered a strong performance," said BBA CEO Mark Johnstone.
He continued: "We are pleased to have advanced our new commercial initiatives in Signature including a successful fuel RFP and increasing the Epic fuel card penetration within the Signature owned network."
Last week, BBA Aviation said it agreed to sell its aerospace parts and services unit Ontic to CVC Fund Vll, managed by private equity firm CVC Capital Partners, for an enterprise value of USD1.37 billion. It expects to return between USD750 million and USD850 million of that to shareholders.
Johnstone continued: "Looking forward, Signature is focused on maintaining its level of performance against the US business & general aviation market in the second half. Post the proposed disposals, BBA Aviation will be focused on the cash generative Signature business which will enable us to maintain our progressive dividend policy, coupled with the prospect of returns to shareholders as we maintain our target leverage range.
He added: "The board is confident of delivering market outperformance through our Signature strategic growth initiatives."
Shares in BBA Aviation were down 3.3% in early trading in London at 304.20 pence each.
