Half-year Report

Manchester Airport Grp Funding PLC

05 December 2023

 

Issuer: Manchester Airport Group Funding PLC

Date: 5 December 2023

Manchester Airport Group Funding PLC

Company No. 8826541

Interim Results

The Issuer's parent, Manchester Airport Group Investments Limited ("MAGIL"), today publishes its Interim Financial Report and consolidated financial statements for the half year ended 30 September 2023.

MAGIL's parent, Manchester Airports Holdings Limited ("MAHL"), today also publishes its Interim Financial Report and consolidated financial statements for the half year ended 30 September 2023.

The Interim Reports and consolidated financial statements for MAHL and MAGIL, together with the Investor Presentation, 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 5 December 2023 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 6 months ended 30 September 2023

MAGIL's financial performance for the six months ended 30 September 2023 saw a continuing recovery of activity levels, with passenger numbers of 34.9m increasing by 14.4% compared to the six months ended 30 September 2022, and reaching 96% of pre-Covid-19 levels.

MAGIL's revenue has increased by 25.0% to £705.3 million, which has resulted in an Adjusted EBITDA of £345.8 million, an increase of £85.9 million (33.1%).  MAGIL delivered an operating profit of £218.4 million for the half year ended 30 September 2023 (2022: £22.1 million). The prior period 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's parent, MAHL, reported an Adjusted EBITDA of £346.1 million, and a profit from operations of £218.2 million for the half year ended 30 September 2023.   

Key Financials	6 months ended 30 September 2023 (£m)	6 months ended 30 September 2022 (£m)	Change (%)
Revenue	705.3	564.1	25.0%
Adjusted EBITDA*	345.8	259.9	33.1%
Adjusted EBITDA*(excluding impact of IFRS 16)	326.7	243.6	34.1%
Operating profit (before adjusted items)	224.4	143.8	56.1%
Operating profit	218.4	22.1	888.2%
Profit/(Loss) before taxation	202.2	(28.2)	n/a

Passengers	6 months ended 30 September 2023 (m)	6 months ended 30 September 2022 (m)	Change (%)
Manchester	16.4	14.1	14.7%
London Stansted	15.8	14.0	12.9%
East Midlands	2.7	2.2	22.7%
Total	34.9	30.5	14.4%

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

Whilst passenger performance remained slightly below pre-Covid levels (96%) for the six months to 30 September 2023, MAG was pleased to report that its airports exceeded pre-pandemic volumes in October 2023 (104%).

MAG's focus on providing customers with a strong product mix, and our commitment to working with our airline partners to make travel as affordable and accessible as possible, resulted in a positive performance across all revenue streams despite the cost-of living pressures faced by many customers.

Route networks continued to strengthen as airlines introduced new routes and increased capacity across MAG's airports.

Other headlines

·      In November 2023, MAG received planning permission for an extension to London Stansted's terminal, which will enhance the passenger experience and capacity to continue to grow to its permitted passenger cap of 43 million passengers per year.

·      Across all three airports, MAG is making the necessary investments to introduce Future Security technology in line with agreed Government timescales. This will remove the need for passengers to take liquids, gels and large electrical items out of their hand luggage, significantly improving their airport experience.

·      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. The revolving credit facility remained undrawn at 30 September 2023.

·      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 due to mature in April 2024.

·      MAGIL's £1,820 million of listed bonds, together with the bank facilities described above and retained cash resources of £498.0 million as at 30 September 2023, provide it with a long-term stable funding platform. MAGIL's Total Net Debt (financial covenant basis) was £1,325.0 million at 30 September 2023, which was £388.3 million lower than as at 31 March 2020, at the beginning of the pandemic.

·      MAGIL's Leverage covenant for the 30 September 2023 Calculation Date was 2.9x. Interest Cover was 7.7x.

·      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.

·      No dividend will be paid by MAHL in respect of the half year ended 30 September 2023. Dividends paid by MAHL are funded via Distributions from MAGIL.

·      In October 2023, MAG published its annual 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 report coincided with the retention of MAG's five-star Global Real Estate Sustainability Benchmark (GRESB) ESG rating.

o  Under Zero Carbon Airports MAG detailed the landmark partnership between Manchester Airport and HyNet, which aims to make it the first UK airport with a direct supply of zero emission hydrogen fuel by the mid-2030s.

o  The Report set out how many people had benefitted from MAG's commitment to Opportunity for All, which saw more than 6,500 young people visit a MAG Connect Aerozone and more than 12,000 people supported with skills and employment through MAG Connect Airport Academies.

o  In our commitment to hearing Local Voices, the Report provided detail on new Youth Forums at each airport that enable younger people to give their views on the sustainable development of MAG, and as part of our long-standing commitment to supporting local causes, MAG contributed nearly £1 million through our community funds.

·      The latest Corporate and Social Responsibility report, together with other investor material related to ESG, is available on MAG's Responsible Business website (magairports.com/responsible-business/csr-reports/) 

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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