TIDM38LZ
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 12 months ended Change (%)
31 March 2020 31 March 2019
(GBPm) (GBPm)*
------------------------ ---------------- ---------------- -----------
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 12 months ended Change (%)
31 March 2020 31 March 2019
(GBPm) (GBPm)
----------------- ---------------- ---------------- -----------
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 GBP1,460 million. Together with the GBP500 million revolving
credit facility and a GBP90 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 GBP60 million to GBP90 million in anticipation of
future debt issuance. In May 2019 MAGIL issued a GBP350 million 25
year bond with a coupon of 2.875%, listed on the London Stock
Exchange.
-- A final dividend of GBP128.0 million was paid in July 2019 by
MAHL in respect of the full year ended 31 March 2019. An interim
dividend of GBP71.3 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 GBP300 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 GBP380 million over
the next 2 years; recently securing receipt of GBP300 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
GBP400 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 GBP300 million injection of equity
by MAHL, MAGIL had over GBP400 million of liquidity at the end of
June 2020. Liquidity of at least GBP300 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
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END
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