Record Passenger Numbers Drive MAG Growth

Published on : Friday, December 4, 2015

Stansted AirportMAG, the UK’s leading airport group, today reports its interim unaudited half-year results, for the period 1st April 2015 – 30th September 2015.

 

Highlights

 

Key Financials

6 months ended 30 September 2015 (£m)

6 months ended 30 September 2014 (£m)

Change (%)

Year ended 31 March 2015

Passenger numbers (m) 29.7 28.1 5.7 48.5
Revenue 445.5 421.4 5.7 738.4
EBITDA 202.5 182.9 10.7 283.6
Operating profit 137.0 117.6 16.5 153.6
Cash flow from operations 180.2 174.4 3.3 309.5
Total dividend 38.6 31.0 24.5 93.0

Charlie Cornish, MAG CEO, said:

 

“The first half of the year has seen sustained growth; outperforming our challenging targets in many areas with record numbers of passengers using our airports.

 

“Our Group operating model continues to deliver benefits and support our airports in competing to attract new passengers and airlines.

“This has been our busiest summer ever and as we approach the milestone of handling 50 million passengers a year, we are responding to changes in the way people want to travel by giving them the opportunity to upgrade their airport experience and begin their journeys in style. Our offerings in this area are driving strong growth in our retail revenues.

“Our Escape Lounges, in particular, have been a real hit with passengers in the UK, and we are now exporting the concept to the USA, with our first lounge opening in Minneapolis-St Paul next week, which we expect will be the first of many across North America.

“I was also delighted to welcome The President of China, His Excellency Xi Jinping, to Manchester Airport in October as part of his State Visit to the United Kingdom. The President and the Prime Minister unveiled a new direct link from Manchester to Beijing, starting in Summer 2016, which will give the 100,000 passengers travelling each year between the two cities the convenience of direct scheduled services. The new route demonstrates the key role that the airport plays as a Global Gateway from the North.

“MAG airports continue to be true growth engines for their regions, employing thousands of people and generating significant economic activity in the wider economy.

“They also continue to offer choice and competition for passengers, providing the direct services that passengers want to see from their local airport. A network of competing airports across the country provides the best solution for customers and also contributes hugely to the growth of UK PLC. At a time when other airports are running out of capacity, our airports provide a solution to the UK’s aviation needs both now and in the future.

“We have confidence in the Group’s long term prospects and I look forward to a successful second half of the year.”

 

Stansted Managing Director, Andrew Harrison said:

 

“Stansted continues to make significant progress with strong passenger growth seeing the airport add over 1.2 million passengers year on year – more than Heathrow or Gatwick- and ensuring we remain the fastest growing airport in the UK.

 

“Our £260 million, five year investment programme to improve customer service and deliver new facilities remains firmly on track. The new Escape business lounge is up and running, over 40 restaurants, shops and bars have opened their doors to passengers and phase one of an £8 million upgrade to the Satellite One departures area, a key element of our strategy to attract a richer mix of airlines, is open and ready to go.

 

“The summer also saw the introduction of exciting new long-haul services to the USA and Mexico with Thomas Cook, as we continue to compete hard for new airline business and explore all opportunities to serve the growing and ambitious East of England region.”

 

Business Review

 

MAG has delivered sustained growth in the first six months of FY16, meeting or exceeding its financial targets and once more continuing double digit growth in EBITDA.

Group EBITDA rose by 10.7% to £202.5 million, driven by record passenger numbers and successful new route development – with Manchester and Stansted in particular both handling increasing numbers of passengers.

A continued focus on cost control and measures to improve operating performance has again contributed to growth in EBITDA, backed up by continued investment in infrastructure with a focus on customer service.

The Group has also been able to translate profits into cash, enabling the Group to grow successfully and sustainably through investment in infrastructure and development opportunities. Cash generated from operations increased by £5.8 million (+ 3.3%) to £180.2 million.

An Interim Dividend of £38.6 million will be paid in December 2015 for the half year to September 2015 which is as a result of the strong performance during the period and the Group’s confidence in trading during the rest of the financial year.

A record number of passengers are using Manchester Airport. August was the busiest month in the airport’s history and passenger numbers to September 2015 were 0.6 million (4.5%) up on the same period last year. The increase has been driven by new long haul routes as well as incumbent short haul carriers adding capacity through additional services and larger aircraft.

The ‘Manchester Airport Transformation Programme’ – a £1bn, 10-year plan – was unveiled and will deliver a significant phased 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’.

London Stansted Airport has also experienced impressive growth in passenger numbers – 1.2 million (10.6%) up year on year. During August, flights to and from Stansted were on average 93.5% full – a record load factor for the airport. Growth has been driven by the introduction of new destinations, coupled with increased frequency of flights on existing routes.

Stansted served over two million passengers for five consecutive months to September, the first time this has been achieved since 2008.

 
East Midlands Airport has performed slightly ahead of expectations, with cargo income up 8.8% as an increasing volume of express freight traffic takes advantage of the airport’s freight facilities and central location.

Passenger numbers in the period were down by 0.2 million (6.5%) year on year, driven by withdrawal of flights by Monarch. The airport has partially mitigated the impact of the withdrawal through improved load factors to other destinations. Bournemouth Airport performance was in line with the previous year.

Car parking has been an area of growth, as customers increasingly take advantage of advance booking offers and premium ‘Meet & Greet’ valet parking products. The Group’s status as one of the world’s biggest providers of valet parking has been consolidated by increased uptake of these products, driven by competitive pricing and more customers booking in advance.

Cargo income has benefitted from growth in e-commerce and internet shopping, with integrated express carriers expanding their operations and contributing to 8.8% growth in revenue at East Midlands, the biggest airport for dedicated cargo traffic in the UK. The cargo business also benefited from customers choosing to divert their freight operations away from the ongoing disruption being experienced at the Channel Tunnel.

In retail, revenue is up despite challenging conditions in duty free retail. The Terminal Transformation Programme at Stansted is now nearing completion, delivering a significantly improved retail and food & beverage offering to passengers. The completion of the East Midlands Airport terminal upgrade has also boosted retail performance.

In the MAG Property division, revenue has remained broadly consistent with the prior year, reflecting a strong portfolio of tenants in MAG’s offices, hotels and cargo properties. Airport City Manchester, in which MAG holds a 50% investment, continues to see strong levels of interest and is expected to deliver significant returns in the next few years.

 

 

Source:- Stansted Airport

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