M6 Toll improves performance but losses still top £18m

CONTINUING roadworks on the M6 have helped to improve the financial performance of the M6 Toll – but the pay-to-drive motorway still racked up losses of more than £18m in its last financial year.

Latest accounts for road operator Midland Expressway Ltd show it incurred a loss of £18,360,000 for year ended December 31, 2015.

However, this was much improved on the previous year when the losses were £28,611,000.

A 14.5% increase in toll revenue across the year, together with a 12.6% in annual average daily traffic volumes are the main reasons for the improved performance.

Overall tolling revenue increased to £79,613,000 (2014: £69,543,000). Tolling rates, which were last increased in March 2012, remained unchanged throughout 2015 – car drivers pay £5.50 during the week and lorry drivers £11.

EBITDA increased to £72,787,000 (2014: £69,879,000), which the company said was a key measure as it excluded depreciation and interest obligations under an inter-company loan agreement.

The company’s net liabilities remained relatively flat at £648, 528,000 (2014: £645,266,000). Its current liabilities to parent Macquarie Motorways Group (MMG), remains £631,194,000.

In total, 17.4m drivers used the 27-mile route between Cannock and Coleshill during 2015, up from 15.4m in the previous year. Average daily traffic volumes were 47,589.

This is largely down to drivers willing to pay the toll charges to avoid congestion and delays on the regular M6 due to the long-running smart motorways programme which has affected the stretch of motorway south of Birmingham and to a lesser extent north of Walsall between Cannock and Stafford.

The report in the annual accounts states as much.

It says: “The contribution of works on the competing M6 section and its approaches, ongoing growth in the economy, and lower fuel prices have all helped to drive these increased traffic numbers.”

The operation also benefited from an increased contribution from the motorway’s service area at Norton Canes. It contributed £3,323,000 to the MEL coffers (2014: £2,624,000).

Despite the massive debt burden, the company said it continued to receive the full support of its debt providers. This followed the successful completion in march 2015 of a financial restructuring agreed in late 2013 between MMG, its shareholder, the senior lending syndicate and the swap counterparties.

“The terms of the restructuring provided the group with an affordable and stable financing platform for the foreseeable future,” it said.

The road has become something of a political football again this year, with suggestions prior to the formation of the new West Midlands Combined Authority that the route should be taken public so it could act as a true relief road to the congestion problems which challenge M6 drivers on a daily basis.

MEL has a concession to operate the road until 2054.