Annual Financial Report

Manchester Airport Grp Funding PLC

02 July 2024

 

Issuer: Manchester Airport Group Funding PLC

Date: 2 July 2024

Manchester Airport Group Funding PLC

Company No. 8826541

Annual Results

The Issuer's parent, Manchester Airport Group Investments Limited ("MAGIL"), today publishes its Annual Financial Report and consolidated financial statements for the year ended 31 March 2024.

MAGIL's parent, Manchester Airports Holdings Limited ("MAHL"), today also publishes its Annual Financial Report and consolidated financial statements for the year ended 31 March 2024.

The Annual Reports and consolidated financial statements for MAHL and MAGIL, together with the Investor Presentation, Investor Report and Compliance Certificate for MAGIL, are available on Manchester Airports Group's Investor Relations website at magairports.com/investor-relations.

Investor Presentation

A conference call to present the results to bondholders, bank lenders, rating agencies and credit analysts will be held on Tuesday 2 July 2024 at 10.00 am (UK time). The call will be hosted by Jan Bramall, Chief Financial Officer, Ken O'Toole, Chief Executive Officer and Iain Ashworth, Corporate Finance Director.

MAGIL results for the 12 months ended 31 March 2024

Across its airports, MAG has enhanced the UK's global connectivity over the past 12 months, securing new services to destinations across Europe, America, the Middle East and Africa, giving passengers in all parts of the country greater choice when it comes to international travel. Continued passenger growth has underpinned MAG's strong financial performance in the 12 months to 31 March 2024.

Passenger numbers for the year were 61.3 million, an increase of 13.5% compared to the 54.0 million passengers in the previous year. This equated to 102.8% of pre-pandemic levels. MAGIL's revenue has increased by 20.5% to £1,237.7 million, which has resulted in an Adjusted EBITDA of £506.7 million, an increase of £96.3 million (23.5%).  MAGIL delivered an operating profit of £240.8 million for the year ended 31 March 2024 (2023: £28.1 million). Last years' result was heavily impacted by a one-off adjusted item charge of £119.7 million following the extinguishment of the Group's deferred debt agreement (DDA) for the exit from the Greater Manchester Pension Fund ("GMPF") pension scheme. All of MAG's defined benefit pension schemes are now closed to future accrual.

MAGIL Key Financials	12 months ended 31 March 2024 (£m) (FY24)	12 months ended 31 March 2023 (£m) (FY23)	Change (%)
Revenue	1,237.7	1,027.4	20.5%
Adjusted EBITDA*	506.7	410.4	23.5%
Adjusted EBITDA*(excluding impact of IFRS 16)	468.2	376.9	24.2%
Operating profit (before adjusted items)	255.4	169.3	50.9%
Operating profit	240.8	28.1	756.9
Profit/(loss) before taxation	218.4	(59.4)	n/a

Passengers	12 months ended 31 March 2024 (m) (FY24)	12 months ended 31 March 2023 (m) (FY23)	Change (%)
Manchester	28.8	25.2	14.3%
London Stansted	28.5	25.5	11.8%
East Midlands	4.0	3.3	21.2%
Total	61.3	54.0	13.5%

*Adjusted EBITDA is earnings before interest, tax, depreciation, amortisation, gains and losses on sales and valuation of investment properties, and adjusted items

MAGIL's parent, MAHL, reported an Adjusted EBITDA of £507.0 million, and a profit from operations of £240.1 million.   

Highlights

·      After a successful year of continued recovery in FY23, and in its 85^th year Manchester Airport saw a further increase in passenger numbers, serving 28.8m people in FY24, equivalent to 102.1% of FY20 levels and up 14.3% on last year. In October 2023, the airport exceeded volumes seen in the same month in 2019, surpassing pre-pandemic volumes for the first time, and for the remainder of the year has seen record passenger numbers pass through its terminals.

·      With its unrivalled choice of European destinations, London Stansted saw its passenger demand increase in FY24, serving 28.5m people, equivalent to 105.9% of FY20 and up 11.8% on last year. The strength of the airport's traffic saw it become the first major UK airport to reach pre-pandemic passenger volumes in July 2023, and it has since delivered several record breaking months, welcoming more passengers than ever before.

·      East Midlands Airport served 4.0m passengers in FY24, equivalent to 88.9% of FY20 levels and up 21.2% on FY23. The airport continued to offer our passengers an efficient, enjoyable experience as they travelled to and from destinations across Europe. Alongside its passenger operation, East Midlands Airport is the UK's leading airport for dedicated cargo operations, flying more tonnes by pure freight aircraft than any other in the country.

·      Across all airports, growth was delivered while maintaining high levels of passenger satisfaction. The most recent survey of passengers showed that 91% rated their overall experience as either 'good', 'very good' or 'excellent' across the Group. During the year, all three of MAG's airports received the highest possible rating from the Civil Aviation Authority for the service provided to passengers with assisted travel needs.

·      MAG is investing heavily in its airports to support their growth and improve passenger experience, with plans to invest more than £2bn across its three airports over the next five years.

o  Good progress has been made across all three airports on the installation of new security equipment that will take away the need for passengers to remove liquids and large electrical items from their hand luggage when passing through security. This is part of a UK-wide requirement to introduce these scanners, involving the delivery of complex capital programmes while maintaining a positive passenger experience in MAG's terminals. Full completion of the programme is expected during 2025.

o  In July 2023, London Stansted announced plans to extend its current terminal building, to transform the passenger experience and provide capacity to accommodate growth towards the agreed limit of 43m passengers per year. Planning permission was received in October 2023 to deliver this vision. According to analysis from Oxford Economics, the scheme could unlock potential for a greater economic contribution to the wider region, creating an additional 5,000 jobs and doubling the airport's GVA to £2bn per year.

o  January 2024 marked one year of construction on the final phase of the Manchester Airport Transformation Programme (MAN-TP). The progress has seen Terminal 2's old security hall stripped back, and work continued on the construction of the Terminal's second pier. The Terminal 2 extension that opened in 2021 continues to receive positive feedback from passengers and, in November 2023, it was named as 'one of the most beautiful' terminals in the world by Prix Versailles, an international design and architecture award recognised by UNESCO.

o  In January 2024, East Midlands Airport announced the start of a £120m investment programme. The programme will transform the passenger experience over the next five years and include an expansion to the security hall to accommodate next generation technology, an improvement to passenger facilities, an upgrade in air traffic control facilities and reconstruction of the airport taxiways.

·      In May 2023 MAGIL executed the first of two one-year extension options on its £500 million revolving credit facility and a £90 million liquidity facility, extending the maturity of these facilities to May 2028. Post year end in May 2024 MAGIL executed the second extension option to further extend the maturities to May 2029. The revolving credit facility was undrawn at 31 March 2024.

·      In September 2023, MAG successfully secured future funding requirements by issuing an 18-year, £360 million bond with a coupon of 6.125%, providing funding to repay a £360 million bond which matured in April 2024. Later in April 2024 MAG issued a further £300 million bond, maturing in 2042, with a coupon of 5.75% providing funding for the Group's investment activities in FY25.

·      MAGIL's £1,820 million of listed bonds, together with the bank facilities described above and retained cash resources of £334.7 million as at 31 March 2024, provide it with a long-term stable funding platform. Together with the undrawn revolving credit facility MAGIL had in excess of £0.8bn of liquidity at the year end.

·      MAGIL's Leverage covenant for the 31 March 2024 Calculation Date was 3.2x. Interest Cover was 7.5x. Leverage remains 1.3x lower than the pre-pandemic 31 March 2020 Calculation Date (4.5x).

·      MAG's financing strategy incorporates its strong investment grade ratings with Fitch (BBB+ stable outlook) and Moody's (Baa1 stable outlook) and a long-term financing structure to support growth.

·      A £10 million special Dividend was paid by MAHL on 28 March 2024 in respect of the outperformance of its FY24 Business Plan. Dividends paid by MAHL are funded via Distributions from MAGIL.

·      In October 2023, MAG published its annual Corporate and Social Responsibility (CSR) report which detailed MAG's achievements over the last 12 months in delivering its CSR Strategy against three themes: Zero Carbon Airports, Opportunity for All, and Local Voices. The latest report, together with other investor material related to ESG, is available on MAG's Responsible Business website (magairports.com/responsible-business/csr-reports/) 

·      MAG was named as a European Climate Leader by the Financial Times for the third consecutive year, and retained its five-star GRESB ESG rating, which is positive recognition for its work in this area.

Note on MAGIL Results

Reconciliations between the financial results of MAGIL and MAHL and MAGIL's Adjusted EBITDA (excluding impact of IFRS 16) are available in the appendix of the Investor Presentation, which is available on MAHL's Investor Relations website at magairports.com/investor-relations.

Enquiries:

Investor Relations                                               [e-mail]

MAG Press Office                                                [e-mail]        

 

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