Acquisitions and growth in global private jet business helped BBA Aviation plc (LON:BBA) increase profit ahead of its underlying markets.
Group revenue from continuing operations was reported at US$2.88bn, up 20% versus restated figures for 2017, while earnings (EBITDA) was marked at US$456.4mln, up 2% compared the prior year.
The company highlighted underlying profit growth of 4.1% to US$375.2mln for the group, whilst highlighting that its ‘signature’ operations - a global fixed base operation (FBO) for owners and operators of private and business aircraft – outperformed in terms of growth rates.
Stockbroker Liberum, in a note, said: “Moderate profit growth was as expected against a backdrop of a relatively flat business & general aviation market.
“Signature continued to outperform its markets, while Ontic continued to make progress, but overall profits were pulled down by higher interest and tax costs.”
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Indeed, the company revealed that its Signature business unit saw organic revenue growth of 3% while US airports business measured 0.9% growth. Overall, the Signature unit generated some US$2.12bn towards group revenue.
BBA integrated the acquired EPIC business in July and the fuelling services business contributed some US$292.5mln of revenue and made a US$2.9mln of underlying profit during the six months that it has been owned by the group.
Also, the company highlighted that continuing group free cash flow improved by 16.9% to US$258.6mln, while the figure for total group free cash flow was up 1.9% at US$224.8mln.
It increased the final dividend by 5% to 10.07 American cents per share, and, said this reflects continued confidence in future growth prospects and cash generation.
"We are pleased with our strategic achievements in 2018, including the complementary acquisitions of EPIC and Firstmark Corp, which are important platforms for growth and were funded well within the parameters of our re-defined target leverage range,” said Mark Johnstone, BBA chief executive.
“The integration of both acquisitions is progressing well with benefits to come in 2019 and beyond.
Johnstone added: “Against the backdrop of a US B&GA market that grew 0.9% during 2018, Signature FBO delivered continued market outperformance of 210 basis points and we made progress in strengthening our unique global network of FBOs and building on a range of commercial initiatives that will enhance the customer experience and help deliver our medium-term target of 250 basis points of market outperformance.”
“The board is confident of continued outperformance against the US B&GA market in 2019 led by our strategic growth initiatives."