27th June 2006
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 2006, which will be announced on the 30th August 2006.
Trading overall remains as set out in our business update of 28th April 2006.
Aviation
Our Aviation division now accounts for more than 75% of our operating profits and we continue to expect this division to make good progress at the half year compared to the prior period.
In Maintenance, Repair and Overhaul, we expect to see a substantial improvement in profits and margins compared to the first half of last year. Engine Repair has recovered as expected from the difficulties experienced in 2005. The previously announced Ontic acquisition has been integrated into the organisation, is performing well and will provide opportunities for further investment in this developing area of our business. Landing Gear and Hydraulics is ahead of our expectations and there is growing demand for pilot training, which is benefiting Oxford Aviation.
In Airport Services, Signature has continued to move forward underpinned in particular by demand from the fractional operators. ASIG has suffered from a relatively weak de-icing season and this will restrict profits growth in Airport Services although we still expect to make some progress compared to the prior period. We are working on a number of bolt-on acquisition opportunities to expand our Signature network.
For the year as a whole we anticipate good progress over 2005.
Fiberweb
As previously announced on 28th April, the trading environment for Fiberweb remains challenging. For the first half of 2006, profits will, as expected, be substantially lower than in 2005. The continued restructuring of the Americas Hygiene business also announced on 28th April is on-track at a cash cost of £4m with anticipated savings of more than £6m in a full year. This reorganisation together with the closure of Toronto announced last year will result in the closure or relocation of half of a total of 12 significant hygiene production lines in North America and a reduction of almost one-third of the work force in the region.
Our Industrial businesses in North America continue to perform well. We expect that the second half of 2006 will benefit from the start up of significant additional capacity in our Industrial businesses in Europe and Brazil, the start-up of a second hygiene production line at our successful Mexican site, productivity initiatives instigated since mid-2005 and continuing growth in a number of our Industrial businesses. For the year as a whole we continue to expect that the performance of Fiberweb will be below the prior year despite the anticipated improvement in the second half.
We are making progress on the demerger of Fiberweb and we continue to expect that it will be completed in the last quarter of 2006. We are pleased today to be able to announce that Malcolm Coster has been appointed non-executive Chairman of Fiberweb with effect from the date of the demerger later in the year. Pending the separate listing Malcolm, as Chairman Designate, will act as part of the advisory committee responsible for reviewing and approving a number of specific items relating to the demerger. Further appointments to the Fiberweb Board are expected and will be announced in due course. Malcolm’s appointment is the subject of a separate press release issued today.
Commenting on the Trading Statement Michael Harper Chief Executive
said:
“Our Aviation businesses continue to perform strongly and for the half and full year we expect to make good progress compared to 2005. The trading environment for Fiberweb remains challenging but after a difficult first half in 2006 we anticipate an improved performance in the second half as a result of actions already in hand. We are delighted with the appointment of a Chairman for Fiberweb announced today and we remain committed to completing the demerger in the last quarter of 2006”.
Enquiries:
Michael Harper, Chief Executive 020 7514 3999
Andrew Wood, Finance Director 020 7514 3950
BBA GROUP PLC
Mike Smith 020 7404 5959
Lucie Anne Brailsford 020 7404 5959
BRUNSWICK
2005
Preliminary Results Presentation, 28th February 2006