Interest charges put brakes on M6 Toll operator
LOSSES have declined for the operator of the UK’s only pay-to-drive motorway, the M6 Toll, but nevertheless Midland Expressway was still £32.5m in the red at the end of the last financial year, its latest accounts show.
The company benefitted – if such a term is suitable – from the ongoing roadworks associated with the widening of the M6 north of Birmingham to pave the way for the government’s new Smart Motorways strategy.
The accounts, for the year ended December 2013, show toll revenue grew 13.5% to £65.9m (2012: £58m), while traffic volumes grew 12.1% to 14,652,000 (2012: 13,066,000).
In addition to the effects of the M6 roadworks, some modest growth in the UK economy and flat fuel prices in 2013 gave further impetus to user numbers.
MEL said it had also seen a marked increase in HGV traffic subsequent to a free trial given to Road Haulage Association members for the month of August 2013.
Ironically, the company made an operating profit of £37.7m (2012: £32.4m); however, this was wiped out by the massive interest charges which when added to the figures saw the company having to pay out £70.33m (2012: £69.27m).
In its strategic report, MEL said: “Traffic volumes and toll revenues for the year benefitted from roadworks in place on the competing M6 which ran throughout 2013 until completion in April 2014. The expected disruption to traffic using the M6 as a result of these works and the constraints on the capacity on the M6 saw the M6 Toll gain increased traffic using the road as previously forecast.
“Overall tolling revenue of £65.9m was achieved in the year (2012: £58.05m). Tolling rates, which were last increased in March 2012, remained unchanged throughout 2013.
“Other income, including a substantial contribution from the M6 Toll motorway service station, was £2.54m (2012: £2.51m).”
However, the benefits may be short-lived and MEL said the improvements introduced on the M6 following the widening programme may provide “significant challenges” to traffic flows and revenues in the longer term.
As of year-end, the company revealed it had net current liabilities of £636.42m (2012: £626.52m). The company has current liabilities payable to its immediate parent undertaking, Macquarie Motorways Group (MMG) of £622,122,000 (2012: £611,781,000).
In December 2013, the company agreed a financial restructuring with its parent, MMG, its shareholder, the senior lending syndicate and the swap counterparties.
It said the terms of the restructuring provided the group with an affordable and stable financing platform for the foreseeable future by extending the maturity date and payment terms of MMG’s term debt and swap obligations until August 2020.
