MAG hails ‘historic’ Stansted deal as profits rise
MANCHESTER Airports Group (MAG) has reported “a year of great progress” which included its biggest ever acquisition, a change in its ownership structure and strong operational performance as underlying operating profits rose 12.4% to £73.6m.
After the £1.5bn Stansted deal in February MAG became the largest UK-owned airport operator with 42 million passengers served by its four airports, Manchester, Stansted, East Midlands and Bournemouth.
Financial results for the year to the end of March, excluding a contribution of one month from Stansted, showed a solid underlying performance and impressive passenger growth, particularly at Manchester Airport.
Revenue rose 5.3% to £393.1m and ebitda grew by a similar amount to £137.9m. Bottom line profits, not including acqusition and finance costs, showed growth too, rising from £35.9m to £39.6m.
Stripping out such costs, which include Stansted-related exceptionals of £28.4m, for legal and due diligence procedures and stamp duty, MAG declared a bottom-line loss of £30.7m, compared with £6.7m in March 2011.
Chief executive Charlie Cornish hailed the Stansted deal as an “historic step” towards MAG’s goal to be seen as “the premier airport management and services company”.
He added: “The newly enlarged group has a portfolio of four quality Airports, bringing size and scale to the Group. The national footprint and access to the London market that the acquisition brings is fully aligned to the group’s mission – to deliver sustainable growth in shareholder value.”
MAG, which had previously been owned by Manchester and the nine other councils of Greater Manchester sold a 35.5% stake to Australia-based investor Industry Funds Management for £890m to help fund the deal.
Neil Thompson, chief financial officer for MAG, said: “This has been a transformational year where we have delivered strong passenger growth, improved our commercial performance but also exercised rigorous cost control and efficiency that has helped to deliver a strong set of results against an economic backdrop that did us no favours.”
He said the Stansted acquisition had comprised “three deals in one” and was the culmination of 18 months of work.
“We had the equity fund-raising of nearly £900m from IFM, we also had to put in place a refinancing of £1.2bn and then there was the actual Stansted bid.
“We are very pleased we did it, and maintained a strong underlying performance which is generating strong returns for our shareholders.”
In light of this MAG has raised its dividend to £72m, including a £30m special dividend relating to the IFM investment.
MAG saw aviation income climb 9.6% to £185.8m, driven by growth in passenger volumes. Revenue from car parking was 7.8% ahead of 2012 at is £56.4m, reflecting the increase in parking spaces and new services such as valet parking.
Asked about the ongoing sale process for Chicago Midway airport, Mr Thompson said MAG had offered “operational help and support” to shareholder IFM, which is one of the bidders for the asset.
“There is no heavy lifting for us in that deal.”
