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25 February 2004

BBA GROUP PLC

PRELIMINARY RESULTS FOR THE YEAR ENDED 31ST DECEMBER 2003

Preliminary Results

  • Sales from continuing operations were maintained at £1,325m (2002: £1,331m) an increase of 5 per cent excluding translation impact of exchange rate movements
  • Underlying Profit Before Tax* £130.1m (2002: £136.9m), a reduction of 5 per cent (2 per cent excluding exchange rate movements)
  • Statutory Profit Before Tax £55.2m (2002: £61.4m)
  • Earnings per share* 20.1p (2002: 21.0p), basic earnings per share (unadjusted) 5.5p (2002: 7.9p)
  • Annual dividend increased by 3 per cent to 10.8p (2002: 10.5p)
  • Further improvement in free cash flow to £87m (2002: £79m)
  • £51m on bolt-on acquisitions
  • Aviation Services: strong recovery in the second half after difficult first half due to the impact of the Iraq war
  • Materials Technology: organic sales growth of 5 per cent, margins impacted by increase in raw material costs
  • Net debt reduced to £460m from £496m; interest cover increased to 8.8x (2002: 7.3x)
  • Share Buy Back: acquired 21.5m shares for £45m

* Continuing operations before goodwill amortisation and all exceptional items.

Commenting on the results, Roy McGlone, BBA Group Chief Executive, said:

"Both sectors in which BBA operates showed improvement in the second half and once again we increased market share across the business. These factors together resulted in a strong year end for the Group. We are particularly encouraged by our performance in business aviation, where demand recovered strongly in the second half, and in Materials Technology where we achieved organic sales growth of five per cent for the year. The progress that the Group has made in the second half of 2003 puts us in a strong position to move forward in both earnings and cash flows. However, our translated earnings will be affected by movements in the US dollar.

We anticipate some benefit from improving economies, particularly in North America; and we will see full year benefits from new contracts and acquisitions completed during the course of 2003. We have strengthened both businesses by working relentlessly on productivity whilst still investing to grow. As a result, we are now in a position where our operational leverage is good, our cost base is tight, our free cash flows are growing stronger and we have a good team in place. Our priority now is to put an increasing emphasis on growth whilst continuing to apply the fundamentals on which we have focused in the past."

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