Final Results

TBI PLC
26 June 2001

PART 1 
                                 26 June 2001

                                    TBI plc


             Preliminary results for the year ended 31 March 2001

TBI plc, the owner and operator of regional airports and related businesses
announces preliminary results for the year ended 31 March 2001.


Highlights                                            2001             2000

Operating profit from airports* (£m)  +15%            37.6             32.7
Profit before tax * * (£m)            + 6%            19.3             18.2
Dividend per share (pence)            +15%            2.30p            2.00p
Earnings per share** (pence)          + 6%            3.11p            2.94p



*  before depreciation, amortisation and exceptional and non recurring items

** before amortisation, exceptional and non recurring items from continuing
   operations



--      Successful first year for TBI as a 'pure' airports group.



--      Strategic objective of operating airports where TBI has a majority stake
        and effective control achieved:



        -    further 46% of London Luton Airport acquired for total             
             consideration of £58.5m, TBI's holding now 71%



        -    minority stakes in 5 Australian airports sold for circa £30.0m



Commenting on prospects, Keith Brooks, Chief Executive said:



'I look forward to the future with anticipation. The rationalisation required
over the last 18 months has been substantially completed. We have an important
new airport in our portfolio and there is an increasing recognition that
airports are excellent businesses; this all augurs well for the future.



Performance during the early months of this financial year has been
encouraging, with results in line with our expectations.'


TBI plc

Keith Brooks (Chief Executive)                                    020 7408 7300
Caroline Price (Finance Director)

Buchanan Communications

Charles Ryland /Nicola Cronk                                      020 7466 5000



Overview



This has been the first year for TBI as a 'pure' airports group, and we are
pleased with the progress made and with the position that the Group now
enjoys.  Financial performance has been robust, progress towards meeting our
strategic goals has been very good and we have made an excellent acquisition
in London Luton airport.



The good results were primarily attributable to increased passenger numbers
and through generally improved retail performance and tighter control of
costs. Whilst results from Belfast and Cardiff were particularly pleasing,
contributions from other business streams were mixed. At Orlando Sanford,
traffic grew by 20%, including a large increase in domestic traffic
(admittedly from a very low base) resulting in an 84% increase in operating
profit before depreciation and amortisation. Similarly, the contribution from
our four airport management contracts in the US was both impressive and in
line with our expectations. The same was not true of Airport Services where
operating profit before depreciation and amortisation of £1.7 million was less
than planned, partly the result of US economic slowdown, and partly because of
an acquisition taking longer to bed in than hoped for. A similar
disappointment was recorded at Stockholm Skavsta, where the withdrawal of a
major customer from the air freight market had a significant adverse impact.
However, these must all be read in context. The major profit contributors to
the Group are Belfast and Cardiff - now supplemented by Luton - and the
performance of other airports has limited impact on overall Group
profitability. With that said, the operating profit before depreciation and
amortisation of £3.5 million from our airports in Bolivia is a sign of what
can be achieved there, and the recent trading performance of our hotel in
Cardiff is encouraging, following a slowish start.



Financial



Operating profit from our airports' businesses before depreciation,
amortisation and reorganisation costs increased by 15% to £37.6 million and
the Group profit before tax,  amortisation and exceptional items increased to
£19.3 million. As a consequence, the Board is recommending an increased
dividend of 2.30 pence per share for the full year and a final dividend of
1.60 pence will be paid on 10 August 2001 to shareholders on the register at
the close of business on 13 July 2001. This represents an increase of 15% from
the previous year and is in line with our progressive dividend policy which
has seen the level of dividend increase by 130% over the last five years.



50,800,000 new ordinary shares of 10.00p each were issued on 21 March 2001 and
rank pari passu in all respects with other ordinary shares except that they do
not carry the right to the final dividend in respect of the year ended 31
March 2001.




Corporate Activity



We were delighted to increase our holding in London Luton Airport Group
Limited at an attractive price. It certainly compares favourably with the
recent multiples of earnings in respect of the sales of Bristol, East Midlands
and Newcastle airports. The 49% minority stake in Newcastle did not fit with
our acquisition strategy so we did not bid. We did bid for both Bristol and
East Midlands airports at prices which we believed would enhance value for TBI
shareholders: at that level our bids were unsuccessful. Shareholder value is,
and will continue to be, an overriding acquisition criterion. However, we
believe that our track record of airport acquisitions demonstrates that it is
possible to acquire airports at the right price, in the right place and at the
right time. The Luton acquisition certainly fell within that category. There
is little doubt that the prices paid for airport acquisitions this year have
demonstrated the very high value attributable to our airports.



We reported last year that we would not accept a position where assets,
however valuable, did not make a contribution to earnings commensurate with
that value - particularly where our practical inability to influence
performance was, in our view, a major cause of the disparity. The two major
culprits were the businesses in Australia and Luton where we owned minority
non-controlling stakes which did not provide for influence in any meaningful
way; and where their earnings contributions were negligible or negative. It is
therefore especially gratifying to record that our actions this year mean that
the control issues in relation to Australia and Luton have been resolved.



Negotiations to sell our Australian interests and assets proved frustrating,
mostly because of procedural formalities which meant that discussions which
commenced in the Summer of 2000, and an exchange of contracts which occurred
in March 2001, did not provide a completed deal until 14 May 2001.
Nevertheless, I was very pleased with the price achieved of some £30.0
million, a figure which would have been even better if exchange rates had
remained constant. The whole of the proceeds of that transaction were
effectively used to part fund the acquisition of an additional 46% of London
Luton Airport Group Limited bringing our total holding to 71%.



Belfast International Airport



The growth in passenger numbers at Belfast continued this year, albeit with a
modest 2% increase to some 3.2 million, but that should be set in the context
of 27% growth over the past three years. Current predictions indicate that
more than 3.5 million passengers will pass through the airport this year.
Strong passenger growth in the last three years has been supplemented by an
equally impressive growth of 16% in cargo and freight volumes over the same
period. Indeed, this year saw growth of 14% to more than 47,000 metric tonnes.
The growth in passenger numbers, supplemented by strong cargo performance and
improved commercial income were reflected in another good year for Belfast.


These figures must be set against a position where airports in Northern
Ireland face fierce competition from Dublin. A differential rate of Airport
Departure Tax and advantageous pound/punt exchange rate provide Dublin with an
apparent competitive advantage. Despite such an environment Belfast has grown
its business by pro-active route development from a very good international
facility.


Cardiff International Airport



Cardiff enjoyed an excellent year, reflected in a 16% increase in passenger
numbers. Total passenger numbers now exceed 1.5 million, an increase of more
than 50% since acquisition. The international charter business continued to do
well and Cardiff's growth was among the best of regional airports in the UK.
Such growth does not happen by accident and the fact that the three major tour
operators base aircraft at Cardiff is a big factor.



The scheduled side of the business enjoyed even greater percentage growth,
increasing by 18%. Major initiatives behind this growth were the introduction
of an additional three daily flights to Dublin, an additional rotation to
Amsterdam and the introduction of new services to Cork and Newcastle.
Scheduled passengers also enjoyed the introduction of jets on to the Paris,
Brussels and Belfast routes.



On the commercial front it is worth noting that, whilst Cardiff was the
airport in the Group most affected by the abolition of intra-European Duty
Free sales, it has recovered well, with spend per head approaching pre-1999
levels. This improvement was undoubtedly helped by the new retail facilities
introduced on both landside and airside during the year.



London Luton Airport



The acquisition of an additional 46% of London Luton Airport Group Limited
(LLAG) for £58 million was completed on 21 March and provides us with a total
interest of 71%. The transaction was partly funded by a vendor placing which
was very well subscribed. Most significantly, this provides us with a
controlling interest and the opportunity to make a difference. I am confident
that we can make such a difference and make Luton a very successful airport.
There is every reason to believe that Luton can eventually enjoy the same
level of operational efficiency and relative profitability enjoyed by our
other UK airports. We have already made tangible progress towards this.



Luton, with 6.4 million passengers, is not just about low cost airlines.  It
has, for example, a substantial charter throughput of 1.6 million passengers,
some 35,000 metric tonnes of freight and has become a premier airport for
Corporate General Aviation. Perhaps most significantly it has the genuine
ability to provide a part solution to airport capacity problems in the south
east of England. Certainly in terms of access time and travel accessibility to
London, it compares well with Heathrow, Gatwick and Stansted.




The customer base at Luton is diverse, with many organisations being based
there; easyJet, Britannia and Monarch have their operational and engineering
headquarters on-site. They all make a significant contribution to the
passenger throughput, easyJet being the largest carrier with some 4 million
passengers per annum. The Group's relationship with easyJet has been a good
one through the development of their operations at Belfast and we aim to
continue this relationship and ensure that both companies obtain an economic
benefit from the Luton operation.



Stockholm Skavsta



While passenger numbers held up well, the airport's financial performance was
a disappointment. This was almost entirely attributable to the withdrawal of a
major airline from the Swedish air freight market early in the year. That led
to a significant reduction in cargo activity and whilst we have made some
inroads into the shortfall, they have been minimal. The withdrawal was
particularly disappointing because, during the year, we extended the runway at
Skavsta and it can now handle the largest freighters to destinations anywhere
in the world. Coupled with the one million passenger terminal, that makes
Skavsta a very good facility and we are determined to continue with our
efforts to realise its potential. These include the possibility of a
significant charter programme to Thailand this winter and further initiatives
with low cost airlines.   Finally, the status of Skavsta as Stockholm's second
airport is still a reality.



Bolivia



Our airports in Bolivia produced a good operating profit before depreciation
and amortisation of £3.5 million, despite some difficult economic conditions.
We are certainly pleased with the result, but equally enthused about the
future. The major reason for such optimism is the discovery of significant gas
reserves in Bolivia, a country where we manage the three main airports. Added
to that are the generally first-rate facilities provided by those airports and
their high level of operational integrity. We have also developed and now
enjoy very good relations with government and the main Bolivian flag carrier,
Lloyd Aero Boliviano.



Orlando Sanford



There was an encouraging improvement in profitability at Orlando Sanford where
traffic grew by 20%. Most of this growth emanated from scheduled traffic, but
the core of the business remained UK charter traffic. Significantly, Orlando
Sanford made its first penetration into the Central American market with a
seasonal charter service to Mexico City. Such progress has continued into this
year with the start of a scheduled service to Caracas in Venezuela in early
July; a first entree into South America. Also underway this year is a UK
charter programme provided by American Trans Air. This comprises 110,000
passengers previously handled by Orlando International Airport. These new
initiatives are evidence that the Orlando Sanford product is being
increasingly recognised.




Airport Management



This activity provides a relatively small financial contribution, but equally
does not tie up any invested capital. Importantly, it provides us with a
strong presence at Atlanta, Toronto, Burbank and Albany airports and
demonstrates our management skills base.



Airport Services



This business had a challenging year and its results disappointed. Part of the
reason for under performance was attributable to a slow down in the US economy
which was most severely felt on the cargo side. Whilst most services'
locations produced results better than expected, they were offset by a poor
contribution at Atlanta. We are, however, pleased to report that there has
been a turnaround at that location, with much improved performance. Indeed,
investment in technology and a streamlining of administration and some
management restructure means that this business stream is now in much better
shape to face the future. From a Group perspective, while the financial
contribution is relatively small, there is little doubt that our presence at
17 locations throughout the US and the Pacific helps with presence, profile
and reputation in the industry as a whole.



Hotel



This is of course not our core business, but the last legacy of our property
business. Nevertheless, it has the same imperative to deliver a satisfactory
financial contribution. The first full year of trading was, however, slightly
disappointing, a fact recognised by the hotel group which manages the business
on our behalf. However, they are experts at this business and are convinced by
the quality of the hotel and its excellent location. As a result, they have
intensified marketing efforts and to good effect: the first two months of the
year have seen much better performance.



Prospects



We look forward to the future with anticipation. The rationalisation required
over the last 18 months has been substantially completed. We have an important
new airport in our portfolio and there is an increasing recognition that
airports are excellent businesses; this all augurs well for the future.



Performance during the early months of this financial year has been
encouraging, with results in line with our expectations.





CONSOLIDATED PROFIT AND LOSS ACCOUNT

for the year ended 31 March 2001


                                                                       Restated
                                                                2001       2000
                                                     Notes     £'000      £'000

Turnover: Group and share of joint ventures                  139,145    101,672
Less: share of joint ventures' turnover                     (14,037)    (5,570)
Group turnover                                         1     125,108     96,102
Cost of sales                                               (29,670)   (13,948)
Gross profit                                           1      95,438     82,154
Administrative expenses                                     (74,127)   (59,569)
Group operating profit before depreciation,
amortisation and reorganisation costs                  1      31,493     30,583
                                                       
Depreciation                                           1     (5,558)    (4,400)
Amortisation of intangible assets                      1     (4,624)    (2,093)
Group operating profit before reorganisation costs            21,311     24,090
Reorganisation costs                                               -    (1,505)
Group operating profit                                 1      21,311     22,585
Share of operating loss in joint ventures                      (906)      (792)
Group operating profit                                 1      21,311     22,585
Share of operating profit/(loss) in joint ventures
before exceptional items                                         539      (792)
                                                                 
Total operating profit before exceptional items in
joint ventures: 
Group and share of joint ventures                             21,850     21,793
Share of exceptional loss in joint ventures                  (1,445)          -
Total operating profit: Group and share of joint              20,405     21,793
ventures
Loss on sale of investment properties                              -       (47)
Profit on sale of investments                                      -        992
Loss on sale of property business                                  -   (21,471)
Net interest payable                                   2     (7,228)    (5,638)
Profit/(loss) on ordinary activities before taxation          13,177    (4,371)
Taxation on profit/(loss) on ordinary activities       3     (3,502)      (732)
Profit/(loss) attributable to shareholders                     9,675    (5,103)
Dividends                                              4    (11,686)    (9,759)
Retained loss for the year                                   (2,011)   (14,862)
Earnings per share                                     5       1.90p    (1.07)p
                                                               
Diluted earnings per share                             5       1.90p    (1.07)p
                                                               
Earnings per share derived from continuing             5       1.90p      2.39p
operations                                                     
Earnings per share derived from continuing
operations before amortisation and exceptional and
non-recurring items                                    5       3.11p      2.94p

                                                               



The results on an historical cost basis are shown on page 10.



The results for 2001 are derived from continuing operations. The analysis of
the results for 2000 between continuing and discontinued operations is shown
in Note 1.




BALANCE SHEETS

31 March 2001

                                                      Restated
                                                 2001     2000     2001    2000
                                                Group    Group  Company Company
                                                £'000    £'000    £'000   £'000

Fixed assets
Goodwill                                      153,796   81,691        -       -
Negative goodwill                             (5,730)  (5,830)        -       -
Other intangible assets                        13,747   12,624        -       -
Intangible assets                             161,813   88,485        -       -
Tangible assets                               225,273  139,885      691     780
Investment properties                         127,682  109,461        -       -

Investments in joint ventures:
- share of gross assets                         4,296   31,307        -       -
- share of gross liabilities                  (3,086) (24,480)        -       -
                                                      
                                                1,210    6,827        -       -
Trade investments                              22,568   24,644        -       -
Investments in subsidiaries                         -        -  126,844  91,559
Investments                                    23,778   31,471  126,844  91,559
                                              538,546  369,302  127,535  92,339


Current assets

Stock                                           1,206      775        -       -

Debtors                                        54,322   54,424  377,027 273,480
Cash at bank and in hand                       27,646   13,452   11,282   8,624
                                               83,174   68,651  388,309 282,104

Current liabilities
Creditors - amounts falling due within one
year                                         (65,712) (52,607) (67,179) (27,859)
                                             
Net current assets                             17,462   16,044  321,130 254,245
Total assets less current liabilities         556,008  385,346  448,665 346,584
Creditors - amounts falling due after more
than one year                               (231,717)(108,343)(115,236)(60,578)
                                            
Accruals and deferred income                  (2,694)    (830)        -       -
Provisions for liabilities and charges       (12,461)  (5,439)        -       -
Net assets                                    309,136  270,734  333,429 286,006

Capital and reserves
Called up share capital                        55,889   50,695   55,889  50,695
Share premium account                         166,611  136,304  166,611 136,304
Capital reserve                                49,634   49,634   69,653  69,653
Revaluation reserve                            14,681    3,391        -       -
Profit and loss account                        28,371   29,413   41,276  29,354
Equity shareholders' funds                    315,186  269,437  333,429 286,006
Equity minority interests                     (6,050)    1,297        -       -
Capital employed                              309,136  270,734  333,429 286,006



CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 March 2001
                                                    2001    2001    2000    2000
                                                   £'000   £'000   £'000   £'000
Net cash inflow from operating activities                 25,834          29,212

Returns on investments and servicing of finance
Interest received                                  3,417           4,359
Interest paid                                    (8,815)        (10,831)
Interest element of finance lease and hire
purchase repayments                                (540)           (588)
                                                  
Net cash outflow from returns on investments and
servicing of finance                                     (5,938)         (7,060)
                                                         

Taxation                                                 (1,085)         (2,522)

Capital expenditure and financial investment
Additions to tangible fixed assets              (11,206)        (12,463)
Sale of investment properties                      9,250           6,953
Additions to investment properties               (5,363)         (4,877)
Sale of tangible fixed assets                        757             211
Grant received                                     1,922               -
Net cash outflow for capital expenditure and
financial investment
                                                         (4,640)        (10,176)

Acquisitions and disposals
Purchase of subsidiaries (including costs of
acquisition)                                    (60,931)        (31,375)
                                                 
Other acquisitions and disposals                 (4,878)             915
Net cash acquired with subsidiaries                   65           1,070
Purchase of other business interests                   -        (21,175)
Sale of property business                              -         169,993
Transaction costs in respect of sale of property
business                                               -        (16,211)
                                                       
Sale of trade investments                              -           8,198
Net cash (outflow)/inflow for acquisitions and
disposals                                               (65,744)         111,415
                                                       

Equity dividends paid                                   (10,664)         (8,177)

Management of liquid resources
Cash placed on deposit                           (8,518)         (4,030)
Sale/(purchase) of US securities                   2,231         (1,269)
Net cash outflow from management of liquid
resources                                                (6,287)         (5,299)
                                                         
Financing
Shares issued                                     35,501             163
Bank loans drawn down                            227,690          23,608
Repayment of bank loans                        (189,640)       (132,693)
Capital element of finance lease and hire
purchase repayments                              (1,979)         (1,733)
                                                 
Net cash inflow/(outflow) in respect of                   71,572       (110,655)
financing
Increase/(decrease) in net cash in the year                3,048         (3,262)







CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES

for the year ended 31 March 2001

                                                                       Restated
                                                                 2001      2000
                                                                £'000     £'000
Profit/(loss) attributable to shareholders                      9,675   (5,103)
Unrealised surplus on revaluation of investment properties     11,290       834
Exchange differences on overseas investments                  (2,748)   (2,706)
Total net gain/(loss) for the year                             18,217   (6,975)
Prior year adjustment                                           (894)         -

Total gain/(loss) recognised in the year                       17,323   (6,975)



The prior year adjustment relates to the adoption of UITF 24 'Start Up Costs'.
Start up costs are now charged to the profit and loss account as incurred.
Previously, they were capitalised and amortised over their useful life to the
business.



HISTORICAL COST PROFITS AND LOSSES

For the year ended 31 March 2001

                                                                       Restated
                                                                  2001     2000
                                                                 £'000    £'000
Profit/(loss) on ordinary activities before taxation            13,177  (4,371)
Realised revaluation surplus of previous years                       -    1,386
Taxation on profit/(loss) on ordinary activities               (3,502)    (732)
Historical cost profit/(loss) on ordinary activities after       9,675  (3,717)
taxation
Dividends                                                     (11,686)  (9,759)

Retained historical cost loss for the year                     (2,011) (13,476)




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