BBA shares drop 11.6% following softer than expected US market
Shares in BBA Aviation, the UK-based aviation services company, tanked on Wednesday after the company posted its first-half results.
The share fell because of lower-than-expected growth of just 3% in BBA’s business and general aviation section.
In the company’s earnings release CEO Mark Johnston said that the low growth was due to a softer-than-expected US market.
The US market is the biggest for BBA Aviation, which completed the acquisition of flight support and FBO network Signature Aviation in February 2016.
Underlying group operating profit rose $1.8 million to $167.1 million, with revenue at Signature increasing by 15.4% year-on-year.
The firm’s engine repair and overhaul (ERO) business, which had been under review, saw revenue increase by 4.3% to $257.6 million. Despite this, the company completed its review of the division and will now look to offload it.
“We have now completed the strategic review of our Engine Repair and Overhaul (ERO) business and reclassified the business as held for sale and reported it as a discontinued operation. We now consider the sale of the business to be highly probable, albeit there is no certainty that an acceptable transaction will result. We anticipate making a further announcement on ERO before the end of the year,” the company said in a statement.
Elsewhere, the company recently acquired EPIC, its fuel-service partner for $88.1 million.
“We are pleased with our operational achievements in the first half of 2018 and were delighted to announce the $88m acquisition of EPIC. Against the background of a softer US B&GA market that grew 2.3% during the first five months of the year, we delivered continued market outperformance and made progress in driving the benefits of Signature’s unique global network of FBOs” said Johnston.