TIDM38LZ
RNS Number : 9512E
Manchester Airport Grp Funding PLC
05 July 2023
Issuer: Manchester Airport Group Funding PLC
Date: 5 July 2023
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
2023.
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 2023.
The Annual Reports and consolidated financial statements for
MAHL and MAGIL, together with the Investor Presentation, Investor
Report and Compliance Certificate for MAGIL, are available on
Manchester Airports Group'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
Wednesday 5 July 2023 at 10.00 am (UK time). The call will be
hosted by Jan Bramall, Chief Financial Officer, Ken O'Toole, Deputy
Chief Executive Officer and Iain Ashworth, Corporate Finance
Director.
MAGIL results for the 12 months ended 31 March 2023
The removal of all remaining UK travel restrictions in March
2022 triggered a rapid increase in pent up demand for travel and
has resulted in MAGIL delivering a strong financial performance for
the 12 months to 31 March 2023.
Passenger numbers for the year were 54.0 million, an increase of
163.4% compared to the 20.5 million passengers in the previous
year. This equated to 91% of pre-pandemic levels. MAGIL's revenue
has increased by 122.8% to GBP1,027.4 million, which has resulted
in an Adjusted EBITDA of GBP410.4 million, an increase of GBP285.3
million (228.1%). MAGIL delivered an operating profit of GBP28.1
million for the year ended 31 March 2023 (2022: loss of GBP130.0
million). This result was heavily impacted by a one-off adjusted
item charge of GBP119.7 million following the extinguishment of the
Group's deferred debt agreement (DDA) for the exit from the Greater
Manchester Pension Fund ("GMPF") pension scheme. The GMPF
settlement also gave rise to a GBP116.7m increase in reserves and
therefore an overall net movement of GBP3.0m. The split of the net
movement between income statement and reserves is in accordance
with the requirements of IAS 19. All of MAG's defined benefit
pension schemes are now closed to future accrual.
MAGIL's parent, MAHL, reported an Adjusted EBITDA of GBP412.0
million, and a profit from operations of GBP28.6 million.
Key Financials 12 months ended 12 months ended Change (%)
31 March 2023 31 March 2022
(GBPm) (GBPm)
---------------------------- ---------------- ---------------- -----------
Revenue 1,027.4 461.2 122.8%
Adjusted EBITDA* 410.4 125.1 228.1%
Adjusted EBITDA*(excluding
impact of IFRS 16) 376.9 94.3 299.7%
Operating profit/(loss)
(before adjusted
items) 169.3 (112.9) n/a
Operating profit 28.1 (130.0) n/a
Loss before taxation (59.4) (185.9) 68.0%
---------------------------- ---------------- ---------------- -----------
Passengers 12 months ended 12 months ended Change (%)
31 March 2023 31 March 2022
(m) (m)
----------------- ---------------- ---------------- -----------
Manchester 25.2 9.1 176.9%
London Stansted 25.5 10.3 147.6%
East Midlands 3.3 1.1 200.0%
----------------- ---------------- ---------------- -----------
Total 54.0 20.5 163.4%
----------------- ---------------- ---------------- -----------
* Adjusted EBITDA is earnings before interest, tax,
depreciation, amortisation, gains and losses on sales and valuation
of investment properties, and adjusted items
Last year was one of the most significant in the aviation
sector's history, the first full year following the removal of the
restrictions imposed in response to the Covid-19 pandemic, enabling
the full resumption of international travel.
Demand recovered well across all three of MAG's airports with
volumes returning close to pre-pandemic levels, growing from 83.8%
of 2020 volumes at the half year, to 90.6% at the financial year
end. Total passenger numbers for the financial year reached 54.0
million.
Demand was particularly strong in the low cost, short-haul
segment, with seat capacity and passenger volumes exceeding
pre-Covid levels at various times in the last quarter of the
financial year. This pattern was seen across the industry, however,
the rate of recovery across MAG typically outpaced that of other UK
airports. MAG's performance reflects the strength of demand within
the catchment areas of our airports as well as our close
relationships with airlines, based on a mutual desire to provide
the best value and choice to the customers we jointly serve.
The rebound in the short-haul market was coupled with the return
of long-haul travel, as international markets opened up and full
service airlines advanced their own recoveries. This was reflected
in the resumption or addition of long-haul routes from Manchester
and London Stansted.
The whole of the UK aviation sector experienced challenges in
meeting the rapid increase in demand following the removal of
travel restrictions. This caused well documented operational issues
in the early part of the financial year that impacted MAG's
airports to varying extents, with Manchester more acutely impacted.
MAG's teams worked hard to improve service levels as the summer
progressed, enabling airlines to operate their planned schedules so
that passengers' travel plans were protected throughout. Over the
last year MAG has recruited more than 1,600 security officers
across the Group. All three of MAG's airports are continuing to
provide consistently good service levels, and we are committed to
sustaining this performance and engaging with partners to optimise
passenger experience.
Other headlines
-- In January 2023 MAG announced a GBP440m investment in the
final phase of the GBP1.3bn Manchester Airport Transformation
Programme (MAN-TP). Completing the transformation of Terminal 2 -
which will double the size of the departure lounge and add a second
security hall - will enhance the passenger experience, unlock
billions in economic activity and create more than 500 jobs in the
construction phase alone, with many more set to be generated as a
result of the economic activity stimulated by the expansion of the
airport.
-- In 2021, MAG secured planning permission to increase
passenger capacity at London Stansted from 35 to 43 million
passengers per year. The investment plans are now being developed
that will enable Stansted to grow to reach that target. Meanwhile,
MAG looks forward to setting out plans to further enhance East
Midlands Airport's cargo capability, cementing its status as the
UK's most important pure freight airport.
-- Across all three airports, MAG is making the necessary
investments to introduce Future Security technology in line with
agreed Government timescales. This will remove the need for
passengers to take liquids, gels and large electrical items out of
their hand luggage, significantly improving their airport
experience.
-- On 27 May 2022 MAGIL completed a refinancing of its GBP500
million revolving credit facility and a GBP90 million liquidity
facility, which were scheduled to mature in June 2023. The total
facility sizes and lenders remained unchanged. The new facilities
mature in May 2028 with the first of two one year extension options
having been executed in May 2023. The revolving credit facility
remained undrawn at 31 March 2023.
-- MAGIL's GBP1,460 million of listed bonds, together with the
bank facilities described above and retained cash resources of
GBP54.5 million as at 31 March 2023, provide it with a long-term
stable funding platform. MAGIL's Total Net Debt (financial covenant
basis) was GBP1,408.5 million at 31 March 2023, which was GBP304.8
million lower than as at 31 March 2020, at the beginning of the
pandemic.
-- MAGIL's Leverage covenant for the 31 March 2023 Calculation
Date was 3.7x, representing a reduction of 0.8x since the
calculation in March 2020 (4.5x). Interest Cover was 5.9x.
-- MAG's financing strategy incorporates its strong investment
grade ratings with Fitch (BBB negative outlook) and Moody's (Baa1
stable outlook) and a long-term financing structure to support
growth.
-- No dividend will be paid by MAHL in respect of the year ended
31 March 2023. Dividends paid by MAHL are funded via Distributions
from MAGIL.
-- In October 2022, MAG re-affirmed its commitment to develop
zero carbon airports, providing education, training and employment
opportunities for all, and to ensuring we give a voice to the local
communities we serve as we develop and grow. We are already working
on a range of important programmes to deliver against these
commitments, from the formation of new youth forums at each airport
and a pledge to develop a new, industry-leading apprenticeship
programme, to our partnerships with Fulcrum BioEnergy and HyNet to
provide sustainable aviation fuel and new hydrogen technologies.
The latest Corporate and Social Responsibility report, together
with other investor material related to ESG, is available on MAG's
Responsible Business website (
magairports.com/responsible-business/csr-reports/ )
Note on MAGIL Results
Reconciliations between the financial results of MAGIL and MAHL
and MAGIL's Adjusted EBITDA (excluding impact of IFRS 16) are
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
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END
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