Interim Results - Pre-tax Profits Up 29%

TBI PLC 22 November 1999 Contacts Keith Brooks, Chief Executive Caroline Price, Finance Director TBI plc 0207 408 7300 David Bick/John Bick Holborn Public Relations 0207 929 5599 david_bick@holbornpr.co.uk TBI plc Fifth consecutive first half of airports profit growth TBI plc, the international airport owner and operator, announces interim results for the period ended 30 September 1999. Highlights * Pre-tax profits on continuing operations up 29% to £14.3m. Earnings per share on continuing operations up 24% at 2.3p * Operating profits on continuing operations up 10% to £16.4m * Interim dividend increased 20% to 0.6p per share * Significant debt capacity * Continued growth in passenger numbers: 15% at Belfast; 5% at Cardiff and 12% at Stockholm Skavsta. Increase of 12% in Duty Free spend at Orlando Sanford despite fewer carriers * Transformation of the group into a specialist international airports group with the sale of non- airport property for £190m and the acquisition of AGI for £86m * Memorandum of understanding to operate Orlando Sanford domestic terminal in addition to existing international terminal franchise * Since 30 September 1999, awarded 20 year management contract for Juan Santamaria International Airport in Costa Rica Commenting on prospects, Keith Brooks, Chief Executive of TBI, said: 'The prospects for our airport businesses, which now comprise a much expanded worldwide portfolio, are good. We have the technical skills, depth of management and financial firepower to grow the business organically and by acquisition.' Group Transformed Events in the six months to 30 September 1999 have made it the most significant period in the corporate life of TBI. The sale of the property business and the acquisition of Airport Group International ('AGI') have transformed TBI into a specialist international airports group with a worldwide presence and capability. Such a position is completely consistent with our declared strategy, and we are delighted yet again to have been able to deliver successfully on our ambitions, objectives and promises. While the property business had played an important part in the development of TBI, it is the continuing airport operations which generate superior returns and represent the future. It is also relevant to point out that the AGI acquisition was not completed until 20 September 1999, so no trading figures from that acquisition are reflected in these accounts. Financial Summary It is especially pleasing that in a period of change our continuing businesses have performed so well. Profits before tax from the continuing operations show a 29% increase compared with the same period last year. This has been achieved through another increase in airport operating profits and a reduced interest charge. As a result, we are pleased to report that an interim dividend of 0.6 pence per share will be paid on Tuesday, 4 January 2000 to shareholders who were on the register on Monday, 6 September 1999. Airports Prior to the acquisition of AGI, the airports business was divided into the established profit engines of Belfast and Cardiff Airports and the developing opportunities at Orlando Sanford and Stockholm Skavsta. This profile was repeated for the period, with continued strong performances from Belfast and Cardiff which report 12% and 20% increases in operating profits respectively. This is especially noteworthy because both airports were affected to some extent by the abolition of Intra- European Duty Free sales on 1 July. TBI had planned for the abolition and its effect was limited, not surprisingly given that duty free revenues accounted for only some 6% of the combined turnover of Belfast, Cardiff and Stockholm (the airports affected by the abolition). The low percentage also illustrates the considerable potential to improve retail and other non-aeronautical revenues. There is also potential to increase traffic and indeed, during the period, there were passenger increases of 15% at Belfast International Airport and 5% at Cardiff International Airport. This is consistent with performance in earlier years and reflects the strong demand for services at these airports, as well as the market share opportunities, which are considerable. For example, some 40% of passengers in Cardiff's potential catchment area travel from airports in the South East of England and the Midlands. In Belfast, the introduction of a low cost carrier has generated market growth without cannibalisation of existing routes. These features illustrate that, as with the commercial side, there remains very considerable potential to grow traffic income. Orlando Sanford Airport and Stockholm Skavsta Airport also performed creditably, with Orlando reporting an increase in Duty Free spend per passenger of 12%, making it the best performing airport in the USA. Indeed, these are exciting times at Sanford, as the group has won the contract to develop and run the domestic terminal. At Stockholm Skavsta Airport passenger numbers increased by a commendable 12%. Acquisitions and Disposals While most of the non-airport property portfolio was sold, two important elements remain. First, the luxury hotel in the centre of Cardiff was officially opened by HRH the Prince of Wales on 1 October 1999, and started trading on that day. Second, we have retained all land and buildings located at our airports, including option land, and continue to be confident of the medium term development potential of such property. An important consequence of the property sale was the repayment of some relatively expensive debenture stock issued when interest rates were considerably higher than today's. There was an early repayment penalty and this, together with professional fees and the goodwill reversal - also related to the property sale - resulted in an exceptional loss of £21million. The advantage is that we now have a substantially ungeared balance sheet. The acquisition of AGI was completed on 20 September 1999 for £86 million. As a result, TBI now has equity, management or services roles in 33 airports around the globe including London Luton in the UK, Perth in Australia, and a large collection of airports in North and South America. In addition to the valuable business assets acquired, also included was an impressive collection of management and technical talents. This combination of assets and skills positions TBI as a leading player in the world's airports league. The group has a successful track record of acquisitions, and that is partly through recognising that successful integration is just as important as financial appraisal and the deal itself. The integration of AGI into the enlarged group is going well. The substantial planned cost savings have been and continue to be made, and this business is now focused on earnings and improving performance. In many ways this amounts to a cultural change for senior AGI personnel, but they have responded with alacrity and enthusiasm. An extension of cultural change and a recognition of the larger and more geographically diverse group is the recent establishment of a TBI Management Board. This group comprises the two main board executive directors and four other divisional directors, who will have responsibility for the achievement of performance objectives, risk management and tactical direction of the group's world-wide interests. Of course, an important consequence of the AGI acquisition is the profile, presence and capability it affords the group in relation to future acquisitions. This has already borne fruit with confirmation that AGI has been awarded the 20-year concession for the international airport at San Jose in Costa Rica. This is a significant and exciting opportunity in a country with close links to the USA. The contract is expected to become operational by March 2000. Prospects The group continues to perform well. The prospects for our airport businesses are good and we have the technical skills, depth of management and financial firepower to grow the business organically and by acquisition. TBI has an excellent profits record, has achieved another good trading result and has successfully accomplished its strategic objectives. TBI has some unique characteristics. Our airports are, by and large, not price regulated. The proportion of commercial to traffic income illustrates the huge potential for increase, but without dependence on duty free income. Our airports are not capacity constrained and we have no large or onerous capital expenditure obligations. Shareholders should be assured that we have created the right framework for sustained growth and that enhancement of shareholder value remains our overriding objective. Consolidated Profit and Loss Account FOR THE SIX MONTHS ENDED 30 SEPTEMBER 1999 Year to Six months to Six months to 31 March 30 September 30 September 1999 1999 1998 £'000 £'000 £'000 ---------------------------------------------------------------------------- 63,942 Turnover from continuing operations 40,167 37,486 Turnover from discontinued 34,808 operations 5,383 23,368 ---------------------------------------------------------------------------- 98,750 Turnover 45,550 60,854 (18,701) Cost of sales (2,213) (14,655) ---------------------------------------------------------------------------- 80,049 Gross profit 43,337 46,199 (47,177) Administrative expenses (24,295) (24,255) ---------------------------------------------------------------------------- Operating profit from 19,363 continuing operations 16,418 14,920 Operating profit from 13,509 discontinued operations 2,624 7,024 ---------------------------------------------------------------------------- 32,872 Operating profit 19,042 21,944 ---------------------------------------------------------------------------- Non-operating items relating to discontinued operations (Loss)/profit on sale of 3,818 investment properties (47) 3,830 76 Profit on sale of investments - - Loss on sale of property - business (20,992) - ---------------------------------------------------------------------------- (Loss)/profit on ordinary activities 36,766 before interest and taxation (1,997) 25,774 (15,712) Net interest expense (3,200) (8,457) ---------------------------------------------------------------------------- (Loss)/profit on ordinary 21,054 activities before taxation (5,197) 17,317 Taxation on (loss)/profit (3,645) on ordinary activities (995) (2,946) ---------------------------------------------------------------------------- (Loss)/profit for the 17,409 financial period (6,192) 14,371 (7,735) Dividends (2,652) (2,210) ---------------------------------------------------------------------------- Retained (loss)/profit for 9,674 the period (8,844) 12,161 ---------------------------------------------------------------------------- 3.94p Earnings per share (1.39)p 3.25p Earnings per share from 1.82p continuing operations 2.30p 1.85p 3.91p Diluted earnings per share (1.38)p 3.17p ---------------------------------------------------------------------------- Consolidated Balance Sheet AS AT 30 SEPTEMBER 1999 31 March 30 September 30 September 1999 1999 1998 £'000 £'000 £'000 ---------------------------------------------------------------------------- Fixed assets - Goodwill 62,268 - (5,930) Negative goodwill (5,878) (6,005) - Other intangible assets 8,669 - (5,930) Intangible assets 65,059 (6,005) 104,160 Tangible assets 135,292 108,583 231,318 Investment properties 105,059 219,124 Investments in joint ventures - - Share of gross assets 31,987 - - - Share of gross liabilities (23,874) - --------------------------------------------------------------------------- - 8,113 - - Other investments 31,900 - --------------------------------------------------------------------------- - Investments 40,013 730 --------------------------------------------------------------------------- 329,548 345,423 322,432 Current assets 86,486 Development properties - 86,472 497 Stock 719 393 29,769 Debtors 66,404 39,652 11,036 Cash at bank and in hand 70,061 26,747 --------------------------------------------------------------------------- 127,788 137,184 153,264 Current Liabilities Creditors - amounts falling due (37,866) within one year (85,045) (59,220) --------------------------------------------------------------------------- 89,922 Net current assets 52,139 94,044 Total assets less current 419,470 liabilities 397,562 416,476 Creditors - amounts falling due (190,672) after more than one year (116,675) (180,265) (916) Deferred income (872) (1,523) Provisions for liabilities (602) and charges (430) (514) --------------------------------------------------------------------------- 227,280 Net Assets 279,585 234,174 --------------------------------------------------------------------------- Capital and reserves 44,220 Called up share capital 50,675 44,202 85,186 Share premium account 136,161 85,186 46,043 Capital reserve 49,633 46,056 3,943 Revaluation reserve 2,263 8,323 46,609 Profit and loss account 39,515 49,111 --------------------------------------------------------------------------- 225,983 Equity shareholders' funds 278,247 232,878 1,297 Equity minority interests 1,338 1,296 --------------------------------------------------------------------------- 227,280 Capital employed 279,585 234,174 --------------------------------------------------------------------------- Consolidated Cashflow Statement FOR THE SIX MONTHS ENDED 30 SEPTEMBER 1999 Year to Six months to Six months to 31 March 30 September 30 September 1999 1999 1998 £'000 £'000 £'000 Net cash inflow from 47,742 operating activities 13,104 27,580 Returns on investments and servicing of finance 1,869 Interest received 2,042 837 (17,776) Interest paid (5,360) (9,723) Interest element of finance lease (675) and hire purchase repayments (316) (320) --------------------------------------------------------------------------- Net cash outflow from returns on (16,582) investments and servicing of finance (3,634) (9,206) (3,768) Taxation (537) (543) Capital expenditure and financial investment (1,629) Purchase of tangible fixed assets (2,358) (1,635) Sale of investment properties 33,746 and investments 2,866 29,838 (25,635) Additions to investment properties (6,487) (10,121) 48 Sale of tangible fixed assets 62 15 1,188 Grant received - 1,188 --------------------------------------------------------------------------- Net cash (outflow)/inflow for capital 7,718 expenditure and financial investment (5,917) 19,285 Acquisitions and disposals Purchase of subsidiaries (including (1,888) costs of acquistion) (29,523) (1,931) 618 Sale of business/subsidiaries 169,993 (577) (81) Sale transaction costs (15,422) (60) Cash movement on purchase 441 and sale of subsidiaries 1,064 458 ---------------------------------------------------------------------------- Net cash inflow/(outflow) (910) for acquisitions and disposals 126,112 (2,110) (7,735) Equity dividends paid (5,494) - Management of liquid resources Cash (placed on)/withdrawn 2,795 from deposit (56,159) (14,006) (964) Sale/(purchase) of US securities 1,125 (132) --------------------------------------------------------------------------- Net cash (outflow)/inflow from 1,831 management of liquid resources (55,034) (14,138) Financing 48,202 Bank Loans drawn 22,955 39,975 (73,016) Repayment of bank loans (86,894) (58,023) Capital element of finance lease (1,323) and hire purchase repayments (873) (620) --------------------------------------------------------------------------- (26,137) Net cash outflow from financing (64,812) (18,668) --------------------------------------------------------------------------- 2,159 Increase in cash in the period 3,788 2,200 --------------------------------------------------------------------------- Corporate Operational Information Six Six Six Six Six Six Six Six months months months months months months months months 30 Sept 30 Sept 30 Sept 30 Sept 30 Sept 30 Sept 30 Sept 30 Sept 1999 1998 1999 1998 1999 1998 1999 1998 Belfast Cardiff Orlando Sanford Stockholm International International International Skavsta Airport Airport Airport Airport Total Passengers Charter 593,747 510,062 672,555 635,668 564,190 771,913 10,190 12,279** Schedule 1,193,712 1,049,278 171,610 167,337 - - 121,356 105,275** Transit 19,683 34,883 18,420 23,603 61,616 157,147 4,246 3,850** ------------------------------------------------------------------------------ Total 1,807,142 1,594,223 862,585 826,608 625,806 929,060 135,792 121,404** ------------------------------------------------------------------------------ Terminal Passengers Spend per head £2.13 £2.30 £3.59 £4.13 £3.53 £3.69 £2.04 £2.96* Net passenger £4.74 £4.95 £6.16 £5.32 £1.40 £1.47 £0.49 £0.41* supplement per head ------------------------------------------------------------------------------ Total £6.87 £7.25 £9.75 £9.45 £4.93 £5.16 £2.53 £3.37* ------------------------------------------------------------------------------ * This information is calculated for the period post acquisition by TBI ** Whilst this information is for the six months to 30 September 1998, TBI did not acquire Stockholm Skavsta Airport until 10 July 1998

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