AAP Alpha Airports

RNS Number:6051X
Alpha Airports Group PLC
30 January 2006



ALPHA AIRPORTS GROUP PLC ("Alpha" or "the Group")


PRE-CLOSE TRADING UPDATE



Alpha will be announcing preliminary results for the year ended 31 January 2006
on Thursday 30 March 2006.  Ahead of entering its close period, the Board is
providing a trading update.



Following significant business development and new contract set-up costs in the
first half, which saw pre-tax profit decline 42% to #6.2 million, a stronger
performance in the second half will ensure that pre-tax profit before
exceptional items and impairment costs for the year are slightly ahead of last
year's #17.4 million level on an IFRS basis.  Group turnover will be over 12%
ahead of last year.



Trading



The UK market continued to face increasing competitive pressures during the year
and the management team is focused on building a stronger position in the
domestic market and improving margins through a programme of cost reduction and
continued innovation.  Whilst the UK, where Alpha is the leading provider of
catering and retailing solutions for the airline and airports industry, will
remain the cornerstone of the Group's operations, the Group has benefited from
the strategic decision to drive international expansion. As a result, the impact
of lower UK margins was significantly offset during the second half by the
continued development of the Group's international businesses.



Flight Services



As previously reported, set-up costs for the new American Airlines flight
catering contract and the new Blue Sky Service impacted on the first half UK
performance.  There was a good UK profit recovery in the second half, but full
year profit for this business will be down when compared with   last year's
performance.



The international flight service businesses are performing better, with
Amsterdam and Australia now close to breakeven after last year's significant
losses. The recent acquisitions in Romania and Bulgaria have been successfully
integrated and are trading above expectation.





Retail



UK sales remain strong with 8% growth forecast, up on last year's reported
increase of 7.4%. Like-for-like sales grew 6.5%, with transaction spend per "
duty-free" shopper also increased 5%.  However, the increased numbers of
passengers at the airports where Alpha operates have not translated into a
similarly increased number of shoppers. Our key priority in 2006 is to attract
more passengers into Alpha's retail outlets

With weaker than anticipated sales growth, higher rent percentages (as some of
our most successful airport contracts benefited from tranched sales incentives),
and higher business development costs including a major IT investment, UK Retail
profits will be significantly below last year's level.



International retail sales and profits continue to perform strongly.



Exceptionals



An exceptional cost of #2.5 million incurred by a recent reorganisation of UK
Flight Services, driven by the successful introduction of the Blue Sky Service,
new facilities at Manchester and the previously reported loss of the Thomsonfly
UK contract, will result in annual savings of #3 million.



It has come to light very recently that the Group may have been the victim of a
fraud by a third party.  If this information proves to be correct it may result
in a significant exceptional loss to the Group.  Initial investigations show the
potential loss is of the order of #0.7 million but it could be as high as #2.5
million.  The investigation is ongoing and the Board anticipates having a
clearer view of the size of the suspected loss by the time of the preliminary
announcement.







Kevin Abbott, Chief Executive, commented:



"It is encouraging that our second half underlying profit has rebounded from the
depressed level reported for the first half. In our growing but highly
competitive core UK market, we remain focussed on continuing to enhance our
offers and reducing operating costs so as to convert our continued sales growth
into future profits recovery. We are particularly encouraged with our
international businesses which continue to grow from strength to strength. With
strong Group finances in place, we will continue to seek out further
international development opportunities."



                                                                 30 January 2006



Enquiries:


Alpha Airports Group Plc                             020 8580 3200
Kevin Abbott, Chief Executive
Heather McRae, Finance Director

College Hill                                         020 7457 2020
Mark Garraway
Stephen Davie



www.alpha-group.com








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            The company news service from the London Stock Exchange
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