Highlights
Group organic revenue growth of 2% and further underlying operating profit progress.
Strong operating profit growth of 19% in Flight Support (73% of Group) driven by Signature.
o Modest US Business & General Aviation growth of 1%
o Continued market outperformance from Signature together with good operating leverage
Aftermarket operating profit (27% of Group) was down 33% in soft markets, due to short-term challenges associated with the ERO footprint rationalisation and competitive pricing. Legacy delivered as anticipated.
Landmark Aviation acquisition completed, substantially enhancing Signature's leading global network.
o Positive outcome of US Department of Justice review, associated disposals on track
o Integration proceeding to plan
2015 pro forma leverage post completion and associated disposals is 3.5x net debt/EBITDA, with a good deleveraging profile.
In response to significant inbound interest in ASIG, reviewing value maximisation alternatives.
Positive underlying progress anticipated in 2016 with increasing momentum into 2017 driven by full year benefits of Landmark Aviation acquisition, delivery of anticipated $35m of cost synergies and realising enhanced revenue management opportunities.
Full year dividend per share up 5%.
Simon Pryce, BBA Aviation Chief Executive Officer, commented:
"2015 was a transformational year in the history of BBA Aviation, with the announcement of the Landmark Aviation acquisition. We are delighted to have almost doubled our largest business' already leading presence in the provision of value added services to US Business and General Aviation customers, a market that continues to demonstrate through-cycle structural growth. Our initial review of the business since completion in February 2016 has not only reconfirmed the cost reduction opportunities from the combination, but has also identified further opportunities through enhanced revenue management.
We are pleased with the interest in the FBO disposals required by the US Department of Justice and are making good progress in this process.
Notwithstanding the transformational acquisition, Flight Support performed very strongly in 2015, despite broadly flat markets, driven principally by Signature, which offset net contract losses in ASIG. Aftermarket Services had a disappointing year, despite Legacy Support's solid performance, with greater than anticipated production inefficiencies associated with our ERO footprint reduction in H1 and lower than anticipated volumes and a competitive pricing environment in H2. Against a background of a low growth aftermarket environment we will be undertaking additional actions in 2016 to further reduce the cost and complexity of our ERO business. Importantly, despite ERO's challenges, the Group delivered further growth in 2015, in line with expectations.
We anticipate further progress in 2016, driven mainly by Signature's continued outperformance, the application of its operational excellence across a much larger network of high quality locations and the realisation of the Signature/Landmark combination benefits which enhance the Group's prospects for cash generation and value creation. The Board therefore expects further good growth in 2016 and beyond."
