30 July 2019 – disposal

The group has announced that it has sold its Ontic business to private equity for an enterprise value of $1.365bn and this is likely to result in a significant return of cash to shareholders.  Ontic supplies aerospace parts to over 1,200 customers worldwide, supporting 39,000 legacy aircraft but the Board believes that its disposal is in the best interest of shareholders.  The group will then focus on its core Signature business which provides specialist airport services including refuelling and ground handling to the business and general aviation market.  It is expected that between $750m and $850m will be returned to shareholders and the company will evaluate the best way to do this.  After such a strong run in the share price, we reduce our recommendation to HOLD.