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Manchester Airport (38LZ)

Manchester Airport

Annual Financial Report
RNS Number : 4594S
Manchester Airport Grp Funding PLC
09 July 2020
 

Issuer: Manchester Airport Group Funding PLC

Date: 9 July 2020

 

 

Manchester Airport Group Funding PLC

Company No. 8826541

 

Annual Results

 

The Issuer's parent, Manchester Airport Group Investments Limited ("MAGIL"), today publishes its Annual Financial Report and consolidated financial statements for the year ended 31 March 2020.

MAGIL's parent, Manchester Airports Holdings Limited ("MAHL"), today also publishes its Annual Financial Report and consolidated financial statements for the year ended 31 March 2020.

The Annual Reports and consolidated financial statements for MAHL and MAGIL are available on MAHL's Investor Relations website at magairports.com/investor-relations.

Investor Presentation

A conference call to present the results to bondholders, bank lenders, rating agencies and credit analysts will be held on Thursday 9 July 2020 at 9.45 am (UK time). The call will be hosted by Neil Thompson, Chief Financial Officer, and Ken O'Toole, Chief Executive of Stansted Airport.

Dial-in details for the call are: UK local/standard international: +44 (0)330 336 9125. Participant PIN code: 6602316.

The presentation can be viewed online during the event by using the link: http://view-w.tv/755-1197-24750/en

MAGIL results for the 12 months ended 31 March 2020

MAGIL's performance for the 12 months to 31 March 2020 was positive and delivered growth in key areas across the Group. The results reflect MAG's strong fundamentals delivering sustained growth and good customer service.

While overall passenger numbers for the 12-month period were slightly lower than last year at 59.6 million (-3.6%), it is important to consider the Group's performance in different parts of the year to appreciate how it was performing before trading was impacted by the pandemic.

From April to December 2019, passenger numbers were 0.8% higher across the Group than the previous year, with 50.0 million passengers in this period compared with 49.6 million the year before. This represents a strong performance despite relatively slow economic growth and the collapse of Thomas Cook Airlines in September 2019.

From January to March 2020, passenger numbers were 21.3% lower than the previous year, with 9.6 million passengers in this period compared with 12.2 million the year before. This performance reflects the growing impact of COVID-19 on air travel during the final quarter, which ended with the grounding of the majority of airline fleets from around the middle of March 2020. Passenger volumes in March 2020 were 56.5% lower than the previous year.

The overall strong passenger performance across the year was reflected in a robust financial performance, with revenue from continuing operations up 2.5% and Adjusted EBITDA up 6% (down 11% on a like-for-like basis, pre IFRS 16 adjustments*) despite some of the headwinds described above.

MAGIL has put in place a strong financial response incorporating significant cash mitigation measures across capital expenditure and costs, together with equity support from its shareholders.  Banks and bondholders have strongly endorsed the response agreeing to waive financial covenant tests at September 2020 and March 2021.

MAGIL faces into the COVID-19 crisis in a position of strength, financially and in terms of the fundamentals of its business, its well invested infrastructure and its people. In line with our expectations, key airline partners have resumed flying during July with plans announced to steadily increase capacity over the coming months.

 

 

 



 

Total Business

Key Financials

12 months ended 31 March 2020 (£m)

12 months ended 31 March 2019 (£m)*

Change (%)

Revenue

901.0

879.1

+2.5%

Adjusted EBITDA**

404.8

381.8

+6.0%

Adjusted EBITDA** (excluding impact of IFRS 16)

377.6

381.8

(1.1%)

Result from operations (before significant items)

227.8

229.4

(0.7%)

Result from operations

204.2

214.2

(4.7%)

Result before taxation

165.4

240.4

(31.2%)

 

Passengers

12 months ended 31 March 2020 (£m)

12 months ended 31 March 2019 (£m)

Change (%)

Manchester

28.2

28.6

(1.4%)

London Stansted

26.9

28.4

(5.3%)

East Midlands

4.5

4.9

(8.2%)

Total

59.6

61.8

(3.6%)

 

 

* The comparative figures have not been restated to account for the adoption of IFRS 16. The Group has taken the modified retrospective approach to adopting the new lease accounting standard, which does not permit the restatement of comparative figures. Note 35 of the Annual Financial Report and consolidated financial statements analyses the impact of the adoption of IFRS 16 on the Income Statement and key reporting metrics.

 

** Adjusted EBITDA is earnings before interest, tax, depreciation, amortisation, gains and losses on sales and valuation of investment properties, and significant items

 

 

· Significant investment has been completed in the last three years and MAG's modern infrastructure will be an important component of a strong recovery. Following the outbreak of COVID-19, MAG has reduced and refocussed expenditure on its capital projects, given the reduction in passenger demand.  The main phase of MAG's main capital project; MANTP, is near completion and will be completed this year. Phase 3 will be revisited post recovery. Manchester Airport's modern facilities will continue to be the international gateway for the North, providing passenger and airline facilities for the future, and supporting commercial yields and operating efficiencies.

 

· At Stansted Airport, the transformation programme delivered new check in desks and a new multi-storey car park, providing an enhanced experience for passengers. At East Midlands Airport work is in the final phase on doubling the size of the immigration hall. The expanded facility will be open in Summer 2020 improving the arrivals experience and future-proofing the terminal for future growth.

 

· As at 31 March 2020, the Group's total listed bonds in issue was £1,460 million. Together with the £500 million revolving credit facility and a £90 million liquidity facility (both maturing June 2023), along with retained cash resources, these facilities provide the Group with a long-term stable funding platform.

 

· In April 2019 the Group increased the size of the Liquidity Facility from £60 million to £90 million in anticipation of future debt issuance. In May 2019 MAGIL issued a £350 million 25 year bond with a coupon of 2.875%, listed on the London Stock Exchange.

 

· A final dividend of £128.0 million was paid in July 2019 by MAHL in respect of the full year ended 31 March 2019. An interim dividend of £71.3 million was paid in December 2019. With the impact of COVID-19 no final dividend will be paid in respect of the full year ended 31 March 2020. Dividends paid by MAHL are funded via Distributions from MAGIL.  No dividends will be paid throughout the covenant waiver period.

 

· During 2019, as part of MAGIL's long-term growth strategy, it commenced marketing for the sale of its non-core property portfolio with significant interest from potential buyers prior to COVID-19. MAG is strategically intent on the disposal of its non-core properties as part of its focus on its core airport business during the next 12 months. Consequently, this business is reported as discontinued activities in MAGIL's Annual Financial Report and consolidated financial statements.  Results from continuing operations are set out in the Annual Report.

 

· On 26 June 2020 the Manchester Airport Group Funding PLC announced that the required majority of the Participating Qualifying Obligor Secured Creditors had voted in favour of the STID Proposal dated 26 May 2020 demonstrating strong endorsement by its lenders of MAG's strategic financial response to COVID-19. 98.51 per cent. of banks and bondholders voted, with all of them voting in support of the STID Proposal which involves, amongst other things, the waiver of financial covenant tests at September 2020 and March 2021. This support is a key part of MAGIL's financial package, which also included £300 million of shareholder equity support, injected on 2 July 2020, and significant cash mitigation measures taken by the business.

 

· MAG's financing strategy incorporates its strong investment grade ratings with Fitch and Moody's and a long-term financing structure to support growth. Maintaining this financial stability, even during the Group's recent transformation activities, places MAGIL in a strong position to maintain its operational capabilities and benefit from the upturn in demand levels when they arrive.

 

· MAG has acted promptly and successfully implemented a strategic financing response.  This includes significant cash mitigation measures across costs and capital expenditure, including reducing future forecast expenditures by over £380 million over the next 2 years; recently securing receipt of £300 million of additional funding from its shareholders; together with MAG's non-core investment property assets held for resale (as outlined above), with realisation of proceeds expected to be in excess of £400 million and to be completed within the next 15 months.  All of which, together with MAG's strong liquidity position at 31 March 2020, provides adequate levels of funding beyond the next 12 months.  Taking into account the previously outlined levels of cash, new equity funding, and realisation of property, the directors are confident that the Group has sufficient funds to allow it to operate throughout this period, even in reasonable downside scenarios

 

· Following the significant drop in passenger numbers between March 2020 and June 2020, a number of MAGIL's key airline partners have resumed flights or plan to this month in line with our expectations. Inclusive of the £300 million injection of equity by MAHL, MAGIL had over £400 million of liquidity at the end of June 2020. Liquidity of at least £300 million is forecast to 31 December 2020.

 

 

Note on MAGIL Results

 

A reconciliation between the financial results of MAGIL and MAHL is available in the appendix of the Investor Presentation, which is available on MAHL's Investor Relations website at magairports.com/investor-relations.

 

Enquiries:

 

Investor Relations  investor.relations@magairports.com

 

MAG Press Office   press.office@magairports.com  


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
ACSUWOBRROUBRAR
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