TIDM81RX
RNS Number : 5273E
NATS (En Route) PLC
30 June 2023
NATS Holdings Limited - Results for the year ended 31 March
2023
30 June 2023
NATS Holdings Limited (NATS) today announced its results for the
year ended 31 March 2023.
Financial year ended 31 March 2023 2022
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Financial highlights:
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Revenue and regulatory allowances - GBPm 930.0 749.8
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Profit before tax - GBPm 148.5 8.7
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Debt-adjusted cash inflow/(outflow)(1)
- GBPm 58.1 (241.1)
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Capital expenditure - GBPm 113.7 100.1
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Net debt(2) - GBPm 803.6 849.5
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Gearing(3) - (%) 52.3% 60.1%
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Dividends - GBPm nil nil
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Operational highlights:
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Flights handled (millions) 2.24 1.29
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Safety: risk-bearing Airprox(4) (attributable
to NATS) 0 0
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Delay seconds per flight (en route delay
attributable to NATS for calendar years
2022 and 2021) 10.2 0.3
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Notes
1. Post-tax free cash flows after debt interest but excluding
the proceeds of bonds issued, the cost of bonds redeemed and
repayments or drawings of borrowing facilities. This alternative
performance measure is explained in the annual report and accounts
of NATS Holdings Limited.
2. Excludes derivative financial instruments.
3. Ratio of net debt (as defined by NERL's Licence) to
regulatory assets of the economically regulated business.
4. An Airprox is a situation in which the safety of the aircraft
was or may have been compromised in the opinion of a pilot or a
controller.
2022/23 financial year key points
Flights recovered strongly after the lifting of travel
restrictions in March 2022. NATS handled 2.24 million flights,
which was a 75% increase on the prior year. NATS' planning for
recovery, whereby it retained critical skills and delivered
simulation training, enabled it to support a safe regeneration and
meet all of its safety targets.
NATS reported a profit of GBP148.5m, with a debt adjusted cash
flow of GBP58.1m (see note 1 above). As for the prior year, the
result includes an assessment of regulatory allowances for the
Covid revenue shortfall which are being determined by the CAA's
retrospective reconciliation of revenue and costs.
While the result this year reflects the start of the sector's
recovery after the Covid pandemic, as for the results of the last
two years, it is not yet supported by the equivalent level of
debt-adjusted cash flow generation. This is because Covid
suppressed flight volumes and income receipts.
NATS expects that, for the regulatory allowances outstanding,
the CAA will require their recovery over 10-years from 2023 to
support the sector's recovery. NATS has financed accordingly with
borrowings aligned with recovery of these allowances. The final
step of NERL's refinancing was completed during the year, with the
issue of a further GBP145m of bonds repayable in 2033.
In October 2022, the CAA published its initial proposals for the
NR23 price control. While the CAA recognises the challenge NATS
faced during Covid, NATS in its response has highlighted its
concern about material elements of their initial proposals. NATS
has reiterated the importance of a price control with appropriate
resources to deliver the NR23 plan which supports the increased
traffic forecasts and the service customers have requested now and
in the future. The CAA's decision is expected in summer 2023.
CEO, Martin Rolfe said:
" It was a welcome relief to see air traffic volumes recover
strongly last summer following the lifting of Covid travel
restrictions. We had made a conscious decision during the pandemic
to retain the essential skills to support the recovery. This meant
we were able to ramp our operation back up very quickly and safely
support the level of demand.
Our result this year also reflected the start of the sector's
recovery after the Covid pandemic but, as with the results of the
two previous years, it is not yet supported by the equivalent level
of cash flows on a debt-adjusted basis. Given its scale, we expect
that the CAA will require the income shortfall we experienced
during Covid to be recovered over an extended 10-year period.
We are committed to a net zero estate by 2035 with near-term
science-based targets and a strategic objective to be carbon
negative by 2040. We are also playing our part to support UK
aviation to decarbonise by 2050. We recently modernised the
airspace route network over South West England and Wales, which
will enable more fuel efficient flight planning across one of the
UK's busiest air intersections for international flights."
Chairman, Dr. Paul Golby said:
"NATS exists to ensure the skies are a safe and efficient
environment for aviation. Our priority from the start of the year,
which we delivered, was to support the safe return of air traffic
as Covid travel restrictions were lifted.
In October 2022 the CAA published its initial proposals for
NERL's next five-year price control, as well as its retrospective
reconciliation for calendar years 2020 to 2022. It is essential
that the CAA's final decision later this summer provides the
resources necessary to support the sector's recovery and for
sustainable investment in the UK's ATC infrastructure and recovery
of the costs we incurred to provide a continuous ATC service during
Covid.
I have been encouraged by the company's approach to developing a
diverse and inclusive place to work. Our people play an essential
role in everything we do. We want our employees to feel valued and
able to fulfil their potential in a workplace where their
contribution is recognised and rewarded. Success is critical for
attracting future talent and achieving our ambition to be a Top 25
employer."
END
Notes to Editors:
For more information contact the NATS Press Office on 01489
615945 or email press.office@nats.co.uk
-- The accounts of NATS Holdings Limited and its subsidiaries
were approved by the Board on 29 June 2023 and are available from
https://www.nats.aero/news/annual-report-accounts-2023/ NATS
Holdings Limited is the parent company of the NATS group.
-- NATS Holdings Limited operates through a Private Public
Partnership (PPP) and is owned by the UK Government (48.9%); The
Airline Group Limited (41.9%); LHR Airports Limited (4.2%) and the
NATS Employee Share Trust Limited (5.0%). The Airline Group is a
consortium including British Airways plc, the Pension Protection
Fund, easyJet Airline Company Limited and USS Sherwood Limited.
Nominal shareholdings in The Airline Group are retained by Alix
Partners, Deutsche Lufthansa AG, TUI Airways Limited and Virgin
Atlantic Airways Limited.
-- NATS (En Route) plc (NERL) is the core of NATS' operations
and accounts for more than 80% of the NATS group' s revenue. It is
the sole provider of air traffic control services for aircraft
flying en route in UK airspace and the eastern part of the North
Atlantic. It provides approach services to aircraft arriving at or
departing from the major airports around London and air traffic
control services to helicopters operating in the North Sea. NERL
also has a long-term agreement to provide the military with
engineering, surveillance and communications services. It is
economically regulated by the Civil Aviation Authority (CAA) and
operates under licence from the Secretary of State for Transport.
NERL reported a profit before tax of GBP156.5m (2022: GBP5.1m
loss).
-- NATS (Services) Limited provides airport air traffic and
related engineering services at most of the UK's major airports,
including Heathrow, the world's busiest dual runway airport and
Gatwick, the UK's second largest airport. It provides defence
services to the UK MOD through Aquila, a joint venture, including
air traffic services at six airfields and asset and service
support. In the UK, it also provides information, design and data
services to airlines and airspace users. Its international services
are provided primarily to customers in Asia Pacific and the Middle
East. During the year its Indian subsidiary opened an office in
Delhi. NATS Services reported a loss before tax of GBP17.0m (2022:
GBP18.2m profit).
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END
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