press notice

Back to press notices

28th June 2005

BBA GROUP PLC

TRADING STATEMENT

BBA Group Plc today issues its regular trading statement ahead of its interim results for the half year ending 30th June 2005 which will be announced on the 1st September 2005.

Commenting Roy McGlone, Group Chief Executive, said:

“We anticipate sales growth of approximately 10 per cent in the first half of 2005. Earnings per share* for continuing operations are expected to be similar to those reported in the first half of 2004 with increased profitability in Aviation being offset by the previously anticipated impacts on Materials Technology of higher raw material costs and reduced profitability from our Finotech joint venture. Interest costs are also expected to be higher than the prior period.

“Sales growth is expected to remain robust in the second half and this together with productivity initiatives, the improved prospects for a reduction in raw material costs and the recent relative strength of the dollar against sterling should lead to an improvement in the second half of the year compared to the first half. We remain confident that for the year as a whole we will deliver good progress (at the constant currency level) over 2004.”

Aviation

Our Airport Services businesses continue to perform well. In Signature (Business Aviation) the acquisitions made last year to expand the network are performing to expectations and in ASIG (Commercial Aviation) the integration of AGI (acquired in October 2004) and Boker (acquired in December 2004) have been completed on schedule. In Maintenance, Repair and Overhaul demand has remained steady and the closure of the Millville (New Jersey) site, initiated in the second half of last year, has now been completed.

Materials Technology

We anticipate sales growth of approximately 12 per cent in the first half of 2005. As previously indicated raw material costs are significantly higher than they were in the first half of last year and this is expected to reduce profits by approximately £4 million compared to the prior period. The previously advised reduction in profitability of our Finotech joint venture due to a planned transition to new manufacturing technology will also reduce profits by approximately £3 million. However the cost of Polypropylene has started to decline in both the USA and Europe and is currently forecast to fall further by the end of 2005 although the rate and extent of the reduction remains uncertain.

Financial

We are anticipating positive free cash flow in the first half of the year and for the year as a whole we expect that it will exceed the £60 million recorded in 2004.

Interest costs will show an increase over the prior period due in particular to the impact of increased dollar interest rates and higher debt levels.

Prior year pre tax profits (excluding goodwill amortisation and all exceptional items) for continuing operations were £65.8 million. To comply with the introduction of IFRS a number of adjustments, principally relating to share option costs and the tax impact of joint ventures, have been made, resulting in a restated pre tax figure of approximately £63.0 million. The audit of the prior year figures to IFRS standards is currently being finalised and the restated figures for the half and full year 2004 will be issued to the market on the 28th of July 2005.

* Basic earnings per share before goodwill impairment, restructuring costs and non-operating items.

For further information please contact:

Roy McGlone, Chief Executive (020) 7514 3990
Andrew Wood, Finance Director (020) 7514 3950
BBA GROUP PLC

Mike Smith orLucie Anne Brailsford (020) 7404 5959
BRUNSWICK