MAG posts strong 2013 interim results

20.1.14

MAG, the owner and operator of the airports of Manchester, London Stansted, East Midlands and Bournemouth, has today announced its interim results for the six months ended 30th September 2013.

In continuing to make progress in its vision towards becoming the premier airport services business, the Group has integrated London Stansted Airport into the Group with critical milestones now delivered. Looking ahead, MAG is advancing plans for the 800 million Airport City development, having secured Beijing Construction Engineering Group (BCEG), Carillion PLC and the Greater Manchester Pension Fund (GMPF) as joint venture partners.

Highlights

• Since acquisition of London Stansted, the airport has added 10.1m passengers, 138.4m of revenue and 59.3m of EBITDA to the Group
• Revenue for the Group (exc Stansted) is up 9.5% to 251.6m
• EBITDA (exc Stansted) has increased by 16.7% to 109.0m
• Cash investment in property, plant and equipment at 42.3m

Neil Thompson, Chief Financial Officer for MAG, commented: “MAG continues to outperform the UK market in terms of growing our passenger numbers, and through the endeavours of our teams; we have secured long term agreements with leading airlines and retailers, creating a strong future for our Group. With a number of significant projects underway at present, the next six months will be as exciting and rewarding as the last and the strong earnings growth trajectory we have delivered to date will continue.”

Business performance

Growth over the first half of the year to September 2013 has led to an increase in revenue of 9.5% to 251.6m. In addition, the group has generated increases in operating profit by 26.2% to 76.7m.

London Stansted added 138.4m of revenue and 59.3m of EBITDA in the half year to September 2013. Performing strongly against all key business measures, our organisation is going from strength to strength and has experienced continued passenger growth over the first half of the year. From March to September 2013, nearly 26m people flew to 266 destinations from the airports.

Passenger numbers across all airports are outperforming the UK market, in particular at Manchester Airport where the 20 million passenger target was reached during the summer months and at East Midlands Airport, where the airport experienced a return to pre-recession passengers numbers during the summer months.

The acquisition of London Stansted Airport has provided an additional 10.1 million passengers. London Stansted has also seen significant developments with airlines over the past six months. A long-term agreement with Ryanair will now increase passenger numbers from the current 13 million to almost 21 million per year by 2023. easyJet also entered into a long-term agreement with the airport, which will see the airline grow from almost three million passengers to six million passengers per annum by 2017/18.

Manchester’s increase in market share is linked to increasing passenger numbers in all airline segments with strong growth in low cost and long-haul sectors. Manchester is widely recognised as the Northern Gateway and provides global connectivity and a viable alternative to using South East airports.

Although operating in a tough economic climate and in a highly competitive area of the UK, Bournemouth Airport continues to perform steadily with a key focus on increasing the route network. Proving to be an excellent base for low cost operators, the launch of Ryanair’s winter schedule with six returning routes was a welcome announcement.

Significant developments in both retail and car parking have provided strong income streams for the Group. The retail division was 3.4% up on the same period in 2012, which is due to the new shopping and catering options available at Manchester and East Midlands Airport. Car parking revenue was significantly higher (13.9%), after substantial investment across all airports to create more on-site secure car parking and improve the services available for passengers.

During the period, both Stansted and East Midlands Airports have undergone substantial terminal redevelopments, both of which are progressing well. 80 million is being invested at Stansted in the creation of a more customer focussed terminal, intended to deliver a more intuitive and rewarding journey for passengers. In addition to providing a modern security area equipped with the latest technology, the terminal design will create a bigger retail area offering leading brands for catering and fashion outlets.

At East Midlands Airport work has continued to develop the terminal building with a 12 million project to enhance the passenger journey. The investment will make the passenger journey and experience, as simple and efficient as possible, through a major refurbishment of the security search area; a reconfigured terminal layout and improvement of the airports shopping experience. Additionally, during the summer of 2013, East Midlands Airport invested 3 million in its on-site car parking operation, increasing the capacity of its car parks by 1,400 spaces and introducing new car parking services.

Corporate progress

In October 2013, MAG announced exciting new plans for the 800 million Airport City development and secured Beijing Construction Engineering Group (BCEG), Carillion PLC and the Greater Manchester Pension Fund (GMPF) as joint venture partners alongside Argent as development manager. Airport City will strengthen Manchester’s position as a major European city, attracting global corporate occupiers and creating 16,000 jobs in the North West over the next 10-15 years.

MAG has also played an active role in the Airports Commission process, and the Commission’s Interim Report recognises that Stansted is an option for new runway capacity after 2030 when the airports existing runway will be approaching full capacity. The Commission has also recommended to Government that urgent studies should be carried out to examine the steps needed to improve the quality and speed of the rail service between Stansted and London. In addition, the Commission has highlighted the importance of making full use of existing runway capacity in the South East and will consider the case for lifting existing planning limits to enable this to happen. Reform to taxes such as Air Passenger Duty will both take the pressure off the congested London airports in the short term and encourage airlines to start new long haul services from cities outside of London.
Outlook

Looking ahead to the next six months, we will continue to drive the business forward and generate profitable growth for our shareholders. As we continue to embed London Stansted into the business we will aim to further develop as one company and look at the opportunities available to us, which in turn will further enable us to become the premier airport management and services company.

The future plans for Airport City are particularly exciting as the joint venture provides the optimum mix of skills and credentials to deliver MAG’s ambitions and promote the project on a national and global basis.

ENDS

For further information, please contact the MAG press office on: +44 (0)161 489 8746 or via email at press.office@magairports.com

Notes

• MAG serves 42 million passengers and handles 650,000 tonnes of air freight every year through its ownership of Manchester, London Stansted, East Midlands and Bournemouth Airports. Its property and facilities management arm, MAG Property, is responsible for the Group’s estate and the progress of Airport City at Manchester.
• MAG is a private company, with shareholdings held by the Council of the City of Manchester (35.5%), IFM Investors (35.5%) and the nine remaining Greater Manchester local authorities (29%).

Published on: 20/01/2014 12:22:09