Peel Airports losses soar to £11m after Durham sale
LOSSES soared from £3.2m to £11.4m at Peel Airports as a result of a one off impairment charge of £8.8m – following the sale of Durham Tees Valley Airport to its shareholder Peel Group in February.
Peel Airports, which is 65% owned by Canadian group Vancouver Airport Services and 35% owned by Manchester-based Peel, sold its stake in Durham Tees Valley back to its original parent Peel Group for a nominal sum after no other buyer for the asset could be found.
In the run up to the deal Peel Airports converted loans due to it by Durham Tees Valley to shares, taking its stake from 75% to 89.3%.
This transaction caused an impairment loss of £8.8m to be recognised in the annual accounts of Peel Airports, which wanted to sell loss-making Durham to focus on Liverpool John Lennon Airport and Robin Hood Doncaster Sheffield Airport in Yorkshire.
Despite the sharp rise in group losses, Liverpool John Lennon Airport performed well with increases in revenues, passenger numbers and profits.
Passenger numbers at JLA rose 4% to 5.2 million, turnover from £31.6m to £33.3m and ebitda from £10.3m to £11.4m. Operating profits climbed from £2.5m to £3.7m.
During the year Peel Airports invested £3m in the facilities at Liverpool, improving and increasing the food and beverage and retail outlets there.
At Robin Hood Airport, operating losses were reduced from £3.7m to £3.4m despite a slight fall in passenger numbers from 888,717 to 845,589.
The group said it would focus on managing costs and improving operational efficiency at Robin Hood, while also attracting new business.
“The directors believe that the opportunity for better access to the airport afforded by the now-approved FARRS Link road projedct will assist in attracting new airlines to the airport.
In the year to the end of March Peel Airports grew revenues 9% from £42.3m to £46.2m.
In the directors’ report. Peel Airports director Elizabeth McDonald said: “The UK aviation market continues to show a reduction in international traffic and a steep decline in the domestic market. This market trend is a direct result of the current economic climate, significant reduction in disposable income being available for business travel and holiday spend.
“The cost of security provision, arising from the need to protect our national air borders, continues to increase. It should be highlighted that the cost resulting from having these more stringent security measures maintained at out airports cannot in all cases be recovered from airlines or passengers.
“Growing regulatory costs and continued taxation of the industry is a disadvantage when competing for business with competitor airports in the rest of the EU.”
The accounts reveal that long-time Peel Group executive Robert Hough – chairman of the Liverpool Local Enterprise Partnership – rejoined the board in July.