Highlights
- Strong financial performance (EBITDA +17.2% to £283.6m) that has exceeded expectations and been driven by industry-leading increases in both passenger numbers and commercial revenues.
- Long-term commercial agreements with airlines have generated a significant increase in passengers (+10.7% to 48.5m), driven by record numbers at Manchester Airport (+7.2% to 22.3m) and unrivalled growth at London Stansted Airport (+16.1% to 20.9m). Together, Stansted and Manchester’s growth exceeded that of Heathrow and Gatwick airports combined.
- Continued expansion of the route network with important extensions to short-haul and long-haul connectivity including the arrival of new flights to Hong Kong, Orlando, Cancun, Las Vegas, Miami and Iraq.
- Unveiling of the ‘Manchester Airport Transformation Programme’ – a £1bn, 10-year plan that will deliver a significant upgrade of the facilities at the airport, ensuring that it continues to thrive as a national asset and play an even greater role as the ‘UK Global Gateway from the North’.
- Substantial investment in airport infrastructure, including; significant improvements to the security and retail facilities and the opening of a new lounge at London Stansted; completion of a £12m terminal redevelopment at East Midlands; opening of the Metrolink extension and the expansion of the security area in Terminal 1 at Manchester Airport; continued development of the Group’s car park estate; and improvements to the Group’s IT capabilities.
- Ongoing diversification of the property investment portfolio with the announcement of additional Airport City projects including two new logistics developments totalling 448,000 sq ft and a 75,000 sq ft office scheme. Planning consent also granted for a new 350 bedroom hotel at London Stansted.
- Appointment of Rosie Andolino as Chief Executive and President of M.A.G’s new airport services business in North America. M.A.G – USA will work with airports to develop and operate terminal and retail solutions, passenger lounges and car parking facilities.
- Sir Adrian Montague joined M.A.G as Chairman, bringing with him significant experience of public-private partnerships, financial services and infrastructure sectors that will help guide the next phase of M.A.G’s development.
- Stansted well-placed to absorb future growth in London’s aviation demand prior to any new runway being built.
- Group announces a final dividend of £62m to be paid in July 2015, taking total payments in respect of the full year ended 31 March 2015, to £93m.
MAG today reports its audited results for the 12 months ending 31 March 2015:http://www.manchesterairport.co.uk/about-us/media-centre/press-releases/manchester-airports-group-mag-annual-report-2015/
Sir Adrian Montague, Chairman of M.A.G, said:
“Since becoming Chairman in September 2014, I have seen at first hand the strong relationships M.A.G has with its many stakeholders and the increasingly important contribution its four UK airports continue to play at a national, regional and local level. Our airports directly employ 40,000 people, with another 21,000 people employed through our supply chain. In terms of economic value, they contribute £4bn in Gross Value Added to the UK economy each year.
“The Group has a long-term objective of providing sustainable dividends to shareholders. I am delighted to announce a final dividend of £62m will be paid in July 2015, taking payments in respect of the full year ended 31 March 2015, to £93m. This level of dividends reflects both the strong performance in the current year and our confidence in the future of the business. The outlook for the Group remains strong and we will continue to focus on delivering further growth by attracting new routes and successfully delivering investment in our UK airports and growing our new US business.”
Charlie Cornish, Chief Executive Officer of M.A.G, said:
“M.A.G has delivered a fifth consecutive year of strong growth, investment and development that has enabled us to exceed expectations across many of our key measures, including the delivery of industry leading passenger numbers and trading performance.
“The success of M.A.G’s commercial and operational strategy is reflected in the fact that we have welcomed nearly 5 million more passengers into our four airports and been able to offer them an increasingly diverse range of facilities, unparalleled choice of airlines and range of destinations that has taken them all over the world.
“I am especially pleased with the performance of our two largest airports, Manchester and London Stansted, which are both currently enjoying robust growth and have bright futures ahead of them.
“In addition to improving the infrastructure across all of our airports, we have continued to focus an increasing proportion of our investment on projects that significantly enhance our customers’ experience of using our facilities. We also announced the creation of M.A.G U.S, headed by Rosie Andolino. As the North American aviation industry continues to evolve, we are confident that our experience will position us well to capitalise on this.
“Our airports have a vital role to play in the next 10-15 years as London expands eastwards, the Northern Powerhouse becomes a reality and runway capacity in the South East becomes even scarcer. Following the Airports Commission’s submission of its Final Report, it is imperative that the focus of Government and other stakeholders is on the practical steps needed to maximise the potential of existing airport capacity in the period before any new runway is completed.
“We continue to request that Government and Network Rail apply greater efforts to improve the rail links into Stansted and Manchester, which together can accommodate an extra 50-60 million passengers a year.”
Business review
Cash generated from operations increased by £67.9m (+29.5%) to £298.1m, underpinning the Group’s continued ability to invest in the asset base and fund future growth.
Passenger numbers continue to increase well ahead of the UK industry average, rising by 10.7% to 48.5m for the year, driven by record numbers at Manchester Airport and ten months of double-digit growth at London Stansted that have enabled it to become the fastest growing airport in the UK in terms of passenger volumes.
Growth across the Group reflects the success of M.A.G’s commercial strategy that has generated a strong increase in passenger numbers and has focussed on securing long-term commercial agreements with major airlines. M.A.G’s customer offering continues to diversify, with increased frequencies, additional capacity and new routes now providing direct flights to over 270 destinations, more than any other UK airport group. The Group continues to focus on further route development to Europe, North America, the Middle East, North Africa and the Far East.
Manchester Airport is the UK’s third largest airport and has seen scheduled international passenger traffic grow for the fourth year in succession (+7.2%), further reinforcing its credentials as the ‘UK Global Gateway from the North’. The growth in passengers has driven increases in aviation, retail and car parking revenues, with total revenues of £369.9m (+10.5%). The airport is the only UK airport outside of London with direct routes to a host of global destinations and in the past year has introduced new long haul routes to the likes of Hong Kong, Saudi Arabia and Iraq. In the last six years, almost five million people have flown long haul from Manchester Airport, demonstrating the clear appetite in the region for such destinations. With two runways, the airport has significant capacity for growth and already serves over 60 airlines and in excess of 200 short and long haul destinations.
In June, M.A.G announced the 10-year ‘Manchester Airport Transformation Programme’ that will significantly alter the airport, ensuring that it continues to thrive as a national asset and play a strong role in meeting the UK’s capacity needs as the ‘UK Global Gateway from the North’. The programme is a series of 60 enhancements that will provide the millions of passengers that use the airport every year with facilities that combine a contemporary look and feel with state of the art services. Implementation of the changes will be delivered through a phased approach so as to ensure minimal disruption to airport operations, passengers and airlines. The £1bn programme updates and re-profiles existing long term capital investment plans and reflects the Group’s ongoing commitment to maintaining its strong investment-grade credit rating.
London Stansted Airport continues to deliver exceptional traffic growth, following the signing of long-term commercial agreements with major airlines, on-going product expansion in areas such as lounges and fast track, an increase in third party commercial partnership agreements and further investment in car parking capacity. In the two years since M.A.G acquired London Stansted, the airport has evolved significantly through the introduction of over 30 new routes and the addition of approximately four million passengers, the same contribution to passenger growth as Heathrow and Gatwick airports put together. Later this month the airport will see the welcome return of long-haul services to Stansted as Thomas Cook launch flights to Orlando, Las Vegas and Cancun and are the first of what will be a growing long-haul offer from Stansted in the coming years. The terminal transformation project is now substantially complete, with further benefits expected to be seen in 2015-16. This will revolutionise the passenger experience in the terminal, doubling the size of the security area and introducing a first executive lounge and over 50 new shops, bars and restaurants. The £80m project is the centrepiece of M.A.G’s overall investment of £265m in the airport. EBITDA rose £25.6m to £114.5m (+28.8%).
East Midlands Airport has also continued to perform well this year, seeing passenger numbers and EBITDA grow strongly; demonstrating the value that a high performing local airport can bring to a region and the cities of Nottingham, Derby and Leicester. The airport also reached a significant milestone as it celebrated its 50th birthday in early April 2015. Over 95m passengers have flown through the airport during this time, with around half of these in the last ten years alone. In addition to delivering significant improvements in passenger numbers and a range of new routes during the year, the airport has also handled 312,000 tonnes of freight, making it the UK’s second largest freight facility. DHL has announced their intention to significantly expand their express freight facilities at the airport, further cementing the major national role that East Midlands plays in this critical market for the UK. Bournemouth Airport continues to be an important contributor to the Group and following the news earlier this year that Flybe is relocating its southern base to the airport and adding 10 new routes, passenger numbers will significantly increase in 2015-16.
The Group has continued to invest in the infrastructure at all of its airports during the year. Over half of the spend (£123m) was on new value generating projects that enhance our customer’s experience, including the London Stansted and East Midlands terminal transformations that are now nearing completion, and improvements at Manchester Airport which included the completion of the Metrolink station and rail connection, increases in car parking capacity and additional security lanes. We continue to expand the car park estate at Manchester and East Midlands, invest significantly in the Group’s IT infrastructure and focus investment predominantly on schemes that improve our customer’s experience of our airports and in turn generate further yield.
Looking overseas, M.A.G – USA was launched with the appointment of Rosemarie Andolino as Chief Executive and President. Rosemarie joins M.A.G following more than 12 years in international airport management, most recently serving as the Chicago Department of Aviation (CDA) Commissioner where she oversaw the management and function of the world’s busiest airport system. She will oversee the development of M.A.G’s airport services business in North America and will work with airports to develop and operate terminal and retail solutions, passenger lounges and car parking facilities. As the North American aviation industry continues to evolve, we are confident that our experience will position us well to develop new and improved facilities for passengers and airlines.
The Group called for Government to respond with an aviation policy that addresses the need for the UK to develop a strong network of competing airports and ensures that best use is made of the capacity available at Stansted and Manchester in the period before any runway can be delivered – something that is likely to take 15 years or more. In order to ensure that this potential is utilised, it is vital that faster rail services are delivered to both Manchester and London Stansted airports and that Stansted’s planning caps are relaxed to enable the airport to make full use of the capacity of its existing runway.
Over the past year we have taken time to reflect on the progress we have made with strong growth in passenger demand and the acquisition of London Stansted, and have updated our CSR Strategy accordingly. M.A.G’s airports are an integral part of the regions they serve, and the Group has placed increased emphasis on ensuring that its growth generates local social and economic value. M.A.G is committed to building local supply chains, developing local skills and offering wide-ranging local employment opportunities. This reporting year, M.A.G achieved 97% in the annual Business in the Community (BITC) Benchmarking Index – the highest score in our sector – earning an outstanding four star rating for our commitment to acting responsibly towards all stakeholders.
A final dividend of £62m will be paid in July 2015, taking payments in respect of the full year ended 31 March 2015, to £93m. In 2013-14 a final dividend of £46m was paid, in addition to a special one-off dividend of £30m in relation to the acquisition of London Stansted Airport.
The outlook for the Group remains strong and we will continue to focus on generating further growth by attracting new routes and successfully delivering investment across the business.