|Master Investor Magazine
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Aviation services provider BBA Aviation (LON:BBA) has seen its share price drop by 3.24% to 304.20p (as of 12:40 BST) despite its statutory pre-tax profits climbing by 21.7% over the six months ended 30th June. However, a significant portion of the rise was due to a switch in accounting methodology.
CEO Mark Johnstone said: “The first half of 2019 has been broadly in line with our expectations for BBA Aviation, with a solid Signature performance, in a flat B&GA market. Our Ontic legacy business has delivered a strong performance.
“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.
“Ontic’s first half performance was ahead of expectations, with strong organic growth driven primarily by our GE licence portfolios. Ontic continues to see a strong pipeline of licence opportunities and we invested $23.6 million during the period.
“On 30 July we were delighted to announce the proposed sale of Ontic to CVC for a consideration of $1,365 million which represents a compelling transaction multiple which we believe fully recognises the strategic value and strong growth track record for the business.
“Looking forward, Signature is focused on maintaining its level of performance against the US B&GA 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. The Board is confident of delivering market outperformance through our Signature strategic growth initiatives“.