Manchester Airports hit £893m, then traffic fell 99%

Manchester Airports Group (MAG), operator of Manchester, London Stansted and East Midlands airports, on Thursday published results for the year ended March 31 showing a 3.7% increase in revenue to £893 million.

MAG’s earnings before interest, tax, depreciation and amortization (EBITDA) rose 7% to £382 million.

However, MAG warned: “In common with all other airports around the world, traffic has reduced to near-zero due to the outbreak of COVID in March 2020, as travel restrictions and a dramatic reduction in demand for flights impacted MAG’s passenger numbers, impacting aviation, car parking and retail revenues across the group …

“MAG continues to receive some limited revenue relating to its cargo operations and property portfolio of c£71m (c8% of FY19 revenue) …

“As at 30 June 2020 passenger numbers through MAG airports were 176,000, representing a 99.0% decrease on prior year …”

MAG said the short term impact of Covid on its EBITDA means it will “temporarily breach its covenants” and it has “agreed amendment to its financial covenants including waivers for the next two periods, to March 2021 and an amendment to the third period calculation to September 2021.”

MAG said it “continues to maintain adequate liquidity to cover the operating costs of the business, required capex and finance charges” and that its “actual cash balances to June 2020 are in line with projections shared with banks and bondholders as part of the consent solicitation process.”

Manchester Airports Group is privately managed on behalf of its shareholders — Australian investment fund IFM Investors (35.5%), Manchester City Council (35.5%) and nine other Greater Manchester councils (29%).

MAG said it paid a full-year 2019 final dividend of £128 million in July 2019 and a 2020 interim dividend of £70.3 million in December 2019 — but said no final dividend will be paid for 2020.

“Up until the end of February MAG’s airports had delivered 1% growth despite Brexit uncertainty and the failure of Thomas Cook and Flybe,” said MAG.

“In line with all UK and European airports, March saw passenger numbers drop to near-zero levels following Government restrictions on travel.”

On its long-term funding situation, MAG said: “The £500m RCF (revolving credit facility) and £90m LF (liquidity facility) supports the continued growth of the business.”

MAG said its financing strategy is “to access the capital markets for medium and long-term lending to support growth and investment.”

The group added: “£350m bond issued in May 2019. Post year end shareholders injected a further £300m in to maintain liquidity following the impact of COVID-19 …

“As part of its long-term growth strategy, MAG is actively exploring options to realise the value in its non-core property assets.”

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