Manchester Airports Group (MAG) delivers industry leading growth

M.A.G, the largest UK-owned airport operator, today reports its interim unaudited results for the six months ended 30 September 2014.

Highlights

• Strong financial performance (EBITDA +8.7%), driven by increases in both passenger numbers and commercial revenues, has ensured the continuation of the growth rate delivered over the past few years

• Long-term commercial agreements with airlines have generated a significant increase in passengers (+8.5% to 28 million), taking numbers to near record levels at Manchester and delivering industry leading growth at Stansted

• The number of destinations accessible from M.A.G’s four airports is now at record levels (+4% to 277), including the arrival of new flights to Jeddah, Eindhoven and Bologna and additional capacity provided on many existing routes such as Abu Dhabi and New York

• London Stansted has been the fastest growing major airport in the South East (+11.9% passenger numbers) and is now handling 2 million more passengers a year than it was at acquisition

• Investment continues to be made in our infrastructure, delivering significant improvements to the security and retail facilities at London Stansted and East Midlands, expansion of our car park estate and improvements to the Group’s back office functions

• Continued diversification provided through our property investment portfolio and deals announced at Airport City with DHL and PZ Cussons

• Group announces an Interim Dividend for the half year to September 2014 of £31 million. £46 million paid in July 2014 in respect of the full year ended 31 March 2014

• Sir Adrian Montague joined M.A.G as Chairman, replacing Mike Davies.

Neil Thompson, Chief Financial Officer of MAG, said:
 
“M.A.G has delivered a strong financial performance in the first six months of the year, meeting or exceeding its financial targets and continuing the growth rate delivered over the past few years.
 
“A busy summer period saw more passengers than ever before using our four airports and taking advantage of the largest number of destinations that we have ever been able to offer. Our focus on long term commercial agreements has made this possible and we continue to focus on further diversifying our route offering, particularly with regards long haul.
 
“I am especially pleased with the performance of Manchester which is reaching its record annual passenger level and Stansted which is now showing industry leading levels of passenger growth.
 
“Stansted alone has added over two million passengers since we acquired the airport in February 2013 and has begun to see substantial operational and commercial benefits from being part of the Group. Unlike other London airports, Stansted has spare runway capacity today and significant room to grow in the future and it is vital that faster rail services are delivered between London and Stansted so as to ensure that this potential is utilised.
 
“We also continue to invest significantly in our infrastructure, with the existing facilities at all four airports having been improved in the last six months.
 
“Finally, I am delighted to announce the payment of a £31 million Interim Dividend to shareholders. This is testament to the health of the business and we are confident of delivering a strong performance throughout the rest of the financial year and beyond.”

Business review

M.A.G has delivered a strong financial performance in the first six months of FY15, meeting or exceeding its financial targets and continuing the growth rate delivered over the past few years. Group EBITDA rose by 8.7% to £183 million, driven by growth in passenger numbers, continued improvement in commercial performance and focused expenditure to support both increased volumes and improved customer service.
 
Cash generated from operations increased by £40 million (+31.8%) to £167 million, underpinning the Group’s continued ability to invest in the asset base and fund future growth.
 
Passenger numbers continue to increase ahead of the market, rising by 8.5% to 28.1 million for the period and up 6.7% to 46 million for the twelve months to 30 September 2014. At Manchester Airport, numbers are expected to hit a pre-recession peak of 22 million this financial year and Stansted has recently become the fastest growing major airport in the London system.
 
Growth across the Group is testament to the success of a commercial strategy that generates strong passenger growth and focuses on the securing of long-term commercial agreements with major airlines. Our customer offering continues to expand, with increased frequencies, additional capacity and new routes now providing direct flights to 277 destinations from our four airports.
 
Manchester Airport has also seen scheduled international passenger traffic grow by 12% following a host of new route launches and the introduction of increased capacity on existing long haul routes. Our ongoing ‘Fly Manchester’ marketing campaign has been hugely successful in communicating to passengers that there is no need to make the long journey to use congested airports in the South. As the airport grows it will continue to play a vital role in generating employment and commerce in the region.
 
London Stansted Airport posted a particularly strong set of financial results with EBITDA up £7 million (+11.4%) to £66 million. The airport is benefitting from the advantages that come with being part of M.A.G which have included the signing of long-term commercial agreements with major airlines, on-going product expansion in areas such as lounges and fast track, an increase in third party commercial partnership agreements and further investment in car parking capacity.
 
Capital investment in our infrastructure, including terminal redevelopments at London Stansted and East Midlands airports, is on plan and will continue to support future growth. We continue to expand the car park estate at Manchester and East Midlands, invest significantly in the Group’s IT infrastructure and focus investment predominantly in yield and capacity enhancement schemes.
 
M.A.G is also investing £40 million in the re-development of the Stansted terminal with retail partners contributing up to another £40 million. The project will double airside retail space, improve passenger flows and provide 100% footfall for all units. In recent months, World Duty Free, Next and M&S Simply Food have all opened stores and in the future we will be opening our new Escape Lounge and a further 12 retail outlets.
 
An Interim Dividend of £31 million will be paid for the half year to September 2014 and reflects the strong trading performance during the period and the Group’s confidence in trading during the rest of the financial year. A dividend of £46 million was paid in July 2014 in respect of the full year ended 31 March 2014.