Final Results
TBI PLC
10 June 2003
TBI PLC
Preliminary Results for the Year ended 31 March 2003
The TBI Group is one of the UK's leading airport operators. It owns and operates
London Luton, Belfast International and Cardiff International Airports. The
Group also owns and/or operates a number of overseas airports and
airport-related businesses.
SUMMARY
• Group turnover was £177.6 million (2002: £186.2 million)
• EBITDA* was £47.3 million (2002: £53.1 million)
• Operating profit was £23.6 million (2002: £23.4 million)
• Profit before amortisation, tax and exceptional items was £23.3 million
(2002: £29.1 million)
• Profit before tax was £10.2 million (2002: £16.5 million)
• Earnings per share before amortisation and exceptional items: 2.86
pence (2002: 3.52 pence)
• Earnings per share were 0.82 pence (2002: 1.47 pence)
• Proposed final dividend of 1.60 pence, maintaining the total dividend
for the year at 2.30 pence
• Bmibaby established a second UK base at Cardiff in November 2002;
Ryanair started a base operation at Stockholm Skavsta in April 2003
• Improved performance at London Luton following further reorganisation
initiatives
• Airport terminal passengers rose to 15.2 million during the year
Note: Earnings reductions are primarily attributable to the loss of the
full service airlines from Belfast International Airport, as announced
previously and include net additional insurance and security costs of some £1.7
million
* Operating profit before depreciation, amortisation and exceptional items.
Keith Brooks, Chief Executive, comments:
'In a tough environment for the market as a whole, and the air transport sector
in particular, TBI has again demonstrated its resilience. This is the first full
year to reflect a fundamental rebasing of our airline custom and, as such,
represents a base level of earnings for the future.
'TBI enters the current year well positioned to capitalise on the growth
forecast for low cost travel in particular, with an attractive collection of
assets and a management team which has proven its ability to adapt and innovate
in an ever-changing environment. '
10 June 2003
ENQUIRIES:
TBI plc Today: 020 7457 2020
Keith Brooks, Chief Executive Thereafter: 020 7408 7300
Caroline Price, Finance Director
College Hill Tel: 020 7457 2020
Justine Warren
Gareth David
TBI PLC
Preliminary Results for the year ended 31 March 2003
CHAIRMAN'S STATEMENT
This has been another very challenging year for all those involved in the
aviation industry, and TBI is no exception. For a variety of well understood
reasons the number of passengers travelling by commercial aircraft has reduced
this year on a worldwide basis. At the same time, the costs of insurance and
security for all aviation related businesses, including airports, have risen
markedly. Our airports have not been completely immune to such factors and this
year has seen net additional insurance and security costs of some £1.7 million.
However, whilst not immune from the general downturn, the number of passengers
travelling from our owned or managed airports marginally increased in 2003 -
remarkable in the circumstances.
The reason for the relative immunity is the very limited presence of full
service airlines and long haul services at our UK airports, and it is those
airlines and services which have borne the brunt of the general decrease in
passenger numbers. Instead the largest airline customers of our four European
airports are budget or low cost airlines, all of which have enjoyed significant
increases in the number of passengers carried, both generally and through our
airports in particular. This trend of an increasing number of passengers using
low cost compared with full service airlines, is part of a structural change in
the industry which has been underway for some time.
A consequence of this change is manifest in the financial performance this year
which saw earnings reduced. Part of this reduction is attributable to the
increased costs already mentioned, but part also to the different revenues
provided by the low cost carriers. Operating Profit was £23.6 million (2002:
£23.4 million) while EBITDA reduced by some £5.8 million to £47.3 million
(2002: £53.1 million) but that should be put in the context of the £1.7 million,
some 29.3% of the total, relating to additional insurance and security.
Similarly earnings per share and earnings per share before amortisation and
exceptional items have reduced to 0.82 pence and 2.86 pence from 1.47 pence and
3.52 pence last year respectively. These reductions have not been caused by
reduced levels of activity and our assets continue to provide good cash flows,
and display considerable potential. However, whilst this has undoubtedly been a
year of consolidation it does represent very much a base year. Our airline
passenger profile is now established and the dramatic impact on earnings from
the replacement of one type of customer by another is, we believe, behind us.
Instead, our aeronautical revenues have a much more homogenised appearance and,
in future, increases in passenger numbers should convert into increased
earnings. As a result, the Board is recommending holding the dividend. That
means a final dividend of 1.60 pence per share to be paid on 1 October 2003,
bringing the total dividend for the year to 2.30 pence per share.
The robustness of our businesses, and indeed the changed customer profile, have
not been achieved by accident. The initiatives which saw new bases established
at Skavsta and Cardiff by Ryanair and bmibaby respectively are good examples of
airports and airlines working together to exploit market demand and to take
advantage of changed passenger requirements. We are confident that we shall be
part of similar successes in the future as low cost traffic, particularly
intra-Europe, continues to grow.
During the year, the Board was further strengthened by the appointment of Larry
Gouldthorpe who has responsibility for all our interests in the Americas. Tim
Simon, who has been a non-executive director since 1995, will be standing down
at the Annual General Meeting. Tim has been a stalwart supporter from the early
days of our development as a listed property company, through the metamorphosis
into an airports group and in the recent challenging times. He leaves us with
our heartfelt thanks and best wishes for the future.
Current trading and outlook
In these changed times for aviation and the world economy, economic fundamentals
are more important than ever. At TBI we have an attractive collection of assets
which have demonstrated their robustness, and which remain scarce and sought
after. Demand for use of our airports shows no sign of abatement and we have a
management team which has again proved its ability to adapt and innovate. These
are a great collection of strengths with which to go forward and build on, and
we are sure we will.
The current year has started well, with growth in traffic at each of our four UK
and European airports. Together with the further expansion plans of our low
cost airline customers and completion of enhanced passenger and retail
facilities at a number of locations, this gives us confidence in anticipating
steady trading progress during the current year.
Stanley Thomas
CHAIRMAN
10 June 2003
OPERATIONAL REVIEW
Introduction
Our strategy remains consistent: to be an operator of regional airports where we
can make a difference. That ability to make a difference reflects a variety of
aspects; the exact nature and role of our involvement, the political
environment, as well as the economic fundamentals of the airport and the region
in question. Our past behaviour bears out this strategy.
We earn approximately 56% of our owned and operated airport turnover from
airline customers.
Our airline customer base has significantly changed within the past two years.
In the year to March 2001, 32% of our terminal passengers were travelling on
full service airlines. In the year to March 2003 this number fell to 21% and in
the UK it represented only 10%. However the absolute number of terminal
passengers travelling through TBI airports increased by 1% to 15.2 million in
2003. This was because, in the meantime, the low cost airlines increased the
number of routes, flights and passengers - taking their proportion of our
traffic from 39% in 2001 to an anticipated 63% in 2004, based on services
already announced by those airlines.
Expansion of low cost traffic
The low cost airlines using TBI airports have also altered significantly during
the year. In November 2002 bmibaby established its second UK base at Cardiff
Airport, initially flying over 100 times a week and carrying some 180,000
passengers in the five months to March 2003. The people of Wales have responded
with enthusiasm to 'the Baby' and bmibaby have recently based a further aircraft
at Cardiff which will increase the flying to some 160 times a week and provide
anticipated annualised passenger numbers of some 750,000. In London Luton,
easyJet started its Paris route during the year and announced new routes into
Faro and Alicante for 2003/4. In Belfast, MyTravelLite began operations to
Birmingham; bmibaby launched services to East Midlands and Cardiff and continues
to grow with the recent introduction of services to Manchester. In addition,
despite the takeover of Go by easyJet (previously both customers of Belfast),
absolute passenger numbers from the two airlines increased by 34%. Perhaps the
most dramatic news for TBI on the low cost front was that Ryanair started a
base operation at Stockholm Skavsta with effect from 4 April 2003 - with an
immediate anticipated increase in annual passenger numbers for Skavsta from 0.3
million in 2003 to 1.5 million in 2004.
We charge low cost airlines only a proportion of the per passenger fee we would
charge a flag carrier, principally because their aircraft turn-round times are
much faster. This fundamental shift in the economic model has been seen most
vividly in the past year or two. We are now at a revised base level of revenues,
retaining almost no flag carrier services within the UK. Henceforward we should
be able to demonstrate once again the financial dynamics of the airport business
- more flights, more passengers, incremental revenues, more profits.
Outlook for airport traffic
Passenger development at TBI's European airports for the first two months of the
new financial year (April and May) has been encouraging. Total passenger numbers
increased 23% over the same period last year to 2.3m. Low cost traffic led the
growth across the portfolio increasing by 42% to 1.7m passengers, while full
service fell 30% to 151,000 passengers and charter reduced by 3% to 439,000
passengers. The charter figures are respectable given the pressures facing this
market including the Gulf War and the weakening pound.
On an airport-by-airport basis all of our core airport locations saw passenger
growth of over 10%. Cardiff and Stockholm saw the greatest growth of 36% and
272% respectively: Cardiff through its development as bmibaby's second UK hub
and Stockholm through the impact of Ryanair's decision to create its
Scandinavian hub at Skavsta. Belfast saw the lowest growth of 10%.
In terms of the total passengers carried over the period the low cost sector
accounted for the great majority at 74%, up from 65% last year. As a result of
the growth at Cardiff and Stockholm, Luton's dominance in the portfolio has
fallen, accounting for 50% of total passengers carried over the period (2002:
53%).
Passengers
Approximately 35% of our owned and operated airport turnover is generated
directly from passengers spending as they pass through an airport. Generally we
do not undertake passenger spend opportunities ourselves. Instead, we enter
into rental arrangements, so that the outlet pays us a turnover-related rent,
usually subject to a minimum guarantee. Our major sources of income are car
parking (40%), retail (30%) and catering (11%).
Car parking revenues can be substantial. In London Luton we earned some 21% of
total turnover from car parking activities; and we are almost at the point where
demand exceeds supply. As a result, decisions as to capacity and pricing must
be taken in the foreseeable future. We are also considering the ways in which
to optimise performance of our car parks across the Group - in-sourcing,
out-sourcing and everything in between. Taken together, there are currently
some 18,700 spaces at our three UK airports, generating net revenues of £18.4
million.
Retailing and catering
Retail, both airside and landside, has been the subject of a revised contract
covering Belfast and Cardiff airports. At both locations, the increases in
passenger numbers will open more doors and provide more options as to which
retailers will consider establishing an outlet. At London Luton most of our
retail concessions reach the end of their lease term in 2004; this offers us an
excellent opportunity to ensure that our retail mix is improved to better
reflect our passenger profile and increase revenue per passenger.
Catering activities in the UK have this year been subject to a cross-airport
deal which has resulted in a better quality of catering and a better financial
deal for us. This has been a prime example of the power of the Group - the
ability to offer a significant contract within the context of UK regional
airports has undoubtedly resulted in a better deal for TBI as a whole as well as
the individual entities.
In addition to a single substantial contract, we also have other catering
concessions in our airports which, taken together, mean that we earned on
average some 28 pence per arriving or departing passenger. This represents a
17% increase on prior year levels. In Belfast, in particular, we have high
hopes of further increases as a result of the new landside food court which
opened in April 2003, and the more recent opening of an airside restaurant, run
by Paul Rankin, the renowned Belfast, Michelin-starred chef.
Capital expenditure
Capital expenditure programmes during the year proceeded largely as planned.
Mostly these took the form of normal maintenance and investment. However there
were two particular projects that were very substantial for the entities
undertaking them. The first was at London Luton, where a £5.0 million project
to develop and construct a walkway and holding areas for passengers was designed
and delivered on budget and on time. This facility has improved the operational
efficiency of the airport as well as the customers' experience. The other
significant project, at Stockholm Skavsta, will straddle 2003 and 2004. Our
existing terminal building had capacity for approximately one million
passengers, which offered comfortable headroom for Skavsta, with its 0.3 million
passengers. It was announced in late February 2003 that Skavsta would become a
Ryanair base, with an immediate increase in passenger numbers to 1.5 million per
annum expected. Ever cautious, we had not begun any construction work but the
operational, logistical and development challenge that this has placed on the
local team and its supporters around the Group has been immense. An extended
terminal, designed specifically to suit the requirements of a low fare operator
and its passengers, has been designed and construction has commenced. In the
meantime temporary measures, such as a tent the size of a football pitch, have
been adopted - true ingenuity and a fine example of the mentality required in
order to do good business going forward. We are confident that all our airports
will benefit from the experiences of the Skavsta team.
South East Regional Air Study ('SERAS') and London Luton Airport
In July 2002, The Department for Transport ('DfT') in its consultation document
on the future of aviation, recognised the valuable contribution which London
Luton plays in the airport infrastructure in the UK and in particular the south
east of England.
We have long recognised London Luton's importance to the debate both in terms of
its strategic value and catchment area and also as a true competitor to the
quasi monopolistic BAA plc. Notwithstanding the DfT's options, which suggest
that London Luton can provide capacity of 31 million passengers per annum, we
believe that London Luton has the capability of making a greater contribution
than that foreseen in the original documents.
FINANCIAL REVIEW
The trading results for the year ended 31 March 2003 are the first full year to
reflect a fundamental rebasing of our airline customer base; and reflect a new
foundation level for the future. Operating profit has increased marginally from
£23.4 million to £23.6 million. This is largely a result of a reduction in
turnover of £8.6 million offset by the reduced cost of exceptional items.
Profit before tax in 2003 fell to £10.2 million from £16.5 million reflecting
the impact of 'below the line' exceptional items. In 2003 we had 'below the
line' additional costs of £2.6 million on the disposal of our property business
and in 2002 there was a £4.9 million profit on sale of our Australian interests.
Further commentary on our financial performance is set out below, where we
concentrate on EBITDA rather than operating profit as the directors believe this
is the performance measure most relevant to readers of our financial statements.
In a tough environment for the market as a whole, and the air transport sector
in particular, TBI has again demonstrated its resilience. EBITDA was £47.3
million (2002: £53.1 million). This 11% decrease reflects fully the withdrawal
of the flag carrier airlines from our Belfast airport, some 0.7 million fewer
passengers of flag carrier airlines flew from Belfast in 2003 than in 2002.
Despite this and the other challenges facing the industry, including the threat
of war with Iraq hanging over much of the year, the number of passengers using
our airports increased marginally during the year to 15.2 million passengers.
Turnover
Total turnover in the year was £177.6 million (2002: £186.2 million). Of this
£8.6 million decrease, some £7.3 million arose in our owned and managed
airports, and is reflected all the way to EBITDA. This bears out the adage that
these airports are relatively fixed cost businesses; and the corollary of this
is that from our base level of turnover we should see any incremental revenues
likewise reflected all the way through the profit and loss account.
Costs
During the year the costs of business increased. Insurance premiums, on a net
basis, increased by some 50% to £3.5 million, and we expect to see a further
increase in 2004. We do not self insure to any significant degree. However,
central costs, at an EBITDA level, reduced by a further 10% to £4.6 million.
These costs have reduced by over 30% since 2001, and are now at a sustainable
level for this business. Central costs reflect the cost of being a plc; a
properly composed board, appropriate advisers, a group risk management team, a
group company secretariat, a group IT function and a group financial accounting
team.
Group EBITDA
Our airports performed stoically and the results demonstrate the resilience of
our business to many of the issues affecting the market and our industry. Of our
Group EBITDA, excluding central costs, 86% is generated by our operations within
the UK. EBITDA from our UK airports was £42.2 million (2002: £48.6 million).
EBITDA less net Capital employed EBITDA less net EBITDA less net
interest interest as a interest as a
Year ended 31 percentage of capital percentage of capital
March 2003 employed employed
2003 2002
£'m £'m % %
Belfast 10.0 106.1 9 15
Cardiff 10.9 65.5 17 23
London Luton 21.3 159.5 13 12
UK airports 42.2 331.1 13 15
Bolivia 3.2 24.0 13 16
Orlando Sanford 0.8 24.1 3 4
Stockholm Skavsta (0.4) 28.5 n/a n/a
Airport management 2.9 8.3 35 36
Airport services 0.8 18.1 4 8
Airport total 49.5 434.1 11 13
Other operations 2.4 27.3 9 5
Head office (4.6) (11.7) n/a n/a
Net interest/Net debt (12.5) (149.1) 8 8
Total 34.8 300.6 12 14
Capital employed excludes all net debt, including inter-company debt, but
includes all applicable goodwill.
The shift from full fare to low cost airlines during the year, together with
increased security and insurance costs, has resulted in a reduction in EBITDA at
Belfast International of £5.6 million to £10.0 million. For similar reasons,
EBITDA at Cardiff International reduced by some £1.7 million to £10.9 million
and EBITDA at London Luton increased by some £0.9 million to £21.3 million
largely as a result of previous reorganisation initiatives.
EBITDA performance for our other businesses, on aggregate is similar to last
year at some £9.7 million. This includes improved performances at Stockholm
Skavsta and the Cardiff Hilton with a decline in EBITDA performance in Bolivia
and in our Airport Services business.
Exceptional items
Exceptional costs comprised predominantly two items - reorganisation and other
staff related costs at London Luton of some £2.0 million, and the redemption of
a loan note owed to TBI, which resulted in us forgiving £1.0 million of the
£20.0 million deferred consideration relating to our disposal of the property
business in 1999, effectively a 0.5% discount from the original £190.0 million
purchase consideration and £1.6 million of accrued interest receivable.
Net interest
The net interest charge for the year was £12.5 million (2002: £11.8 million);
including £1.6 million interest previously accrued but forgiven in relation to
the redemption of the property business loan note mentioned above. The weighted
average interest cost was 6.35% (2002: 6.50%). One of the more expensive debt
facilities in the Group relates to the old project finance we inherited at
London Luton and, further to considerable debate with the minority shareholder
at London Luton, refinancing on better terms is expected to be completed
shortly. As at 31 March 2003, net debt was £149.1 million (2002: £152.6
million).
Tax
The total tax charge for the year was £4.0 million (2002: £6.4 million). Due to
the utilisation of historic losses only £2.3 million will be reflected as a cash
cost, the balance being mainly the reversal of a deferred tax asset as we
utilise our brought forward tax losses.
As highlighted last year the benefit of those historic losses in the UK has been
felt over the past seven years or so. Many of those losses have now been
utilised, but we still have over £25.0 million of UK tax losses available to
mitigate the cash cost of tax to the Group in 2004 and beyond. In addition we
still have substantial losses available in some of our overseas operations and
the extent to which we can benefit from these will depend on the profitability
of those operations.
Earnings per share
Earnings per share and earnings per share adjusted for goodwill and exceptional
items, were 0.82 pence (2002: 1.47 pence) and 2.86 pence (2002: 3.52 pence)
respectively.
Dividends
The dividend is held and the proposed final dividend is 1.60 pence, making a
full year's dividend of 2.30 pence. The dividend is currently not covered by
profits for the financial year but is being distributed from brought forward
reserves. However, the dividend is being paid from cash inflows from the
operating activities of the Group for the year after allowing for tax, net
interest and capital expenditure.
Cashflow
We generated £42.9 million of cash (2002: £40.3 million) from the operating
activities of the Group. The cash outflow on capital expenditure during the year
was £16.9 million, of which approximately £11.5 million was on recurrent capital
programmes. The two large projects undertaken during the year were at London
Luton and at Skavsta, and are detailed earlier in this review.
Defined benefit pension schemes
We operate defined benefit pension schemes in London Luton, Belfast
International, Cardiff International and in certain of our US operations. We
have complied with the transitional arrangements of FRS17 and the current excess
of liabilities over assets, as defined in FRS17, is some £14.8 million after
allowing for the associated tax effects.
Accounting policies
We have reviewed our accounting policies as set out in the financial statements
and we consider them to be the most appropriate to our business activities.
TBI PLC
Consolidated profit and loss account
for the year ended 31 March 2003
Notes 2003 2002
£'000 £'000
Turnover 1 177,618 186,170
Cost of sales (24,417) (27,078)
Gross profit 1 153,201 159,092
Administrative expenses (129,563) (135,735)
Operating profit before depreciation, amortisation and 1 47,268 53,061
exceptional items
Depreciation - normal 1 (13,045) (12,235)
- exceptional 1 - (5,743)
Amortisation of intangible assets - normal 1 (8,280) (8,244)
- exceptional 1 - 5,630
Exceptional items (2,305) (9,112)
Operating profit 1 23,638 23,357
Additional cost on disposal of property business (1,000) -
Profit on sale of investments and joint ventures - 4,940
Net interest payable 2 (12,481) (11,752)
Profit on ordinary activities before tax 1 10,157 16,545
Tax on profit on ordinary activities 3 (3,953) (6,397)
Profit on ordinary activities after tax 6,204 10,148
Equity minority interests (1,606) (1,909)
Profit for the financial year 4,598 8,239
Dividends 4 (12,854) (12,854)
Retained loss for the financial year (8,256) (4,615)
Earnings per share 5 0.82p 1.47p
Diluted earnings per share 5 0.82p 1.47p
Earnings per share (basic and diluted) before amortisation 5 2.86p 3.52p
and exceptional items
The turnover and operating profit shown above are derived from continuing
operations.
TBI PLC
Balance sheets
31 March 2003
2003 2002 2003 2002
Group Group Company Company
£'000 £'000 £'000 £'000
Fixed assets
Goodwill 133,059 141,688 - -
Other intangible assets 11,364 13,140 - -
Intangible assets 144,423 154,828 - -
Tangible assets 217,877 214,520 755 536
Investment properties 135,077 123,283 1,100 1,050
Trade investments 1,676 1,232 - -
Investments in subsidiaries - - 216,844 216,844
499,053 493,863 218,699 218,430
Current assets
Stock 1,243 1,026 - -
Debtors 28,914 45,646 264,981 290,758
Cash at bank and in hand 27,768 35,181 6,117 10,479
57,925 81,853 271,098 301,237
Current liabilities
Creditors - amounts falling due within one year (63,433) (61,068) (87,702) (98,628)
Net current (liabilities)/assets (5,508) 20,785 183,396 202,609
Total assets less current liabilities 493,545 514,648 402,095 421,039
Creditors - amounts falling due after more than one (170,387) (200,037) (67,304) (88,697)
year
Accruals and deferred income (4,638) (2,747) (1,850) -
Provisions for liabilities and charges (17,889) (16,784) - -
Net assets 300,631 295,080 332,941 332,342
Capital and reserves
Called up share capital 55,889 55,889 55,889 55,889
Share premium account 166,611 166,611 166,611 166,611
Capital reserve 49,634 49,634 69,653 69,653
Revaluation reserve 15,959 7,137 50 -
Profit and loss account 13,800 18,677 40,738 40,189
Equity shareholders' funds 301,893 297,948 332,941 332,342
Equity minority interests (1,262) (2,868) - -
Capital employed 300,631 295,080 332,941 332,342
TBI PLC
Consolidated cash flow statement
for the year ended 31 March 2003
2003 2003 2002 2002
£'000 £'000 £'000 £'000
Net cash inflow from operating activities 42,915 40,345
Returns on investments and servicing of finance
Interest received 1,155 3,802
Interest paid (11,336) (13,629)
Interest element of finance lease and hire purchase (390) (419)
repayments
Net cash outflow from returns on investments and (10,571) (10,246)
servicing of finance
Tax (161) (2,601)
Capital expenditure and financial investment
Additions to tangible fixed assets (12,002) (4,331)
Additions to investment properties (4,911) (3,215)
Sale of tangible fixed assets 259 143
Grant received - 101
Net cash outflow for capital expenditure and financial (16,654) (7,302)
investment
Acquisitions and disposals
Purchase of trade investments (561) (1,232)
Other acquisitions (378) (451)
Sale of trade investments and joint ventures - 28,700
Net cash (outflow)/inflow for acquisitions and disposals (939) 27,017
Equity dividends paid (12,854) (12,041)
Management of liquid resources
Cash withdrawn from/(placed on) deposit 4,607 (5,499)
Sale/(purchase) of US securities 92 (1,629)
Net cash inflow/(outflow) from management of liquid 4,699 (7,128)
resources
Financing
Proceeds from loan note 19,000 -
Bank loans drawn down 3,546 2,829
Repayment of bank loans (27,767) (28,102)
Capital element of finance lease and hire purchase (2,572) (2,355)
repayments
Net cash outflow in respect of financing (7,793) (27,628)
(Decrease)/increase in net cash in the year (1,358) 416
TBI PLC
Consolidated statement of total recognised gains and losses
for the year ended 31 March 2003
2003 2002
£'000 £'000
Profit for the financial year 4,598 8,239
Unrealised surplus/(deficit) on revaluation of investment properties 8,822 (7,544)
Exchange differences on overseas investments 3,379 (45)
Total net gain for the year 16,799 650
Prior year adjustment in respect of FRS 19 - (5,034)
Total gains/(losses) recognised in the year 16,799 (4,384)
TBI PLC
Notes to the financial statements
31 March 2003
1. Segmental information
Business analysis
In the segmental information provided below, Airport Ownership relates to
airports which are either owned or operated under long term agreements.
Turnover is derived from third parties.
2003 2002
£'000 £'000
Turnover
Airport Ownership Traffic income 76,531 82,659
Commercial income 48,453 49,856
Tenant income 12,565 12,296
Airport Services 26,271 30,230
Airport Management 4,686 3,838
Total airports 168,506 178,879
Other operations 9,112 7,291
177,618 186,170
Gross profit
Airport Ownership Traffic income 76,531 82,659
Commercial income 48,453 49,856
Tenant income 12,565 12,296
Airport Services 3,893 4,847
Airport Management 4,411 3,711
Total airports 145,853 153,369
Other operations 7,348 5,723
153,201 159,092
Operating profit before depreciation, amortisation and exceptional items
Airport Ownership 45,821 52,442
Airport Services 794 1,804
Airport Management 2,861 2,618
Total airports 49,476 56,864
Other operations 2,379 1,322
Head office costs (4,587) (5,125)
47,268 53,061
Depreciation
Airports - normal (11,378) (10,937)
- exceptional - (5,743)
Other operations (1,420) (1,035)
Head office costs (247) (263)
(13,045) (17,978)
Amortisation of intangible assets
Airports - normal (8,280) (8,244)
- exceptional - 5,630
(8,280) (2,614)
Operating profit
Airports 27,513 35,251
Other operations 959 287
Head office costs (4,834) (12,181)
23,638 23,357
Profit on ordinary activities before tax
Airports 27,513 35,251
Other operations 959 287
Head office costs (4,834) (12,181)
Additional cost on disposal of property business (1,000) -
Profit on sale of investments and joint ventures - 4,940
Net interest payable (12,481) (11,752)
10,157 16,545
TBI PLC
Notes to the financial statements (continued)
31 March 2003
1. Segmental information (continued)
2003 2002
£'000 £'000
Net assets
Airports 433,921 427,496
Other operations 15,822 20,214
Net debt (Note 6) (149,112) (152,630)
300,631 295,080
Other operations include the hotel, aircraft and unallocated head office assets
and liabilities.
Geographical analysis (origin and destination)
2003 2002
£'000 £'000
Turnover United Kingdom 124,373 128,616
Rest of Europe 3,749 3,022
North America 38,390 42,665
South and Central America 11,106 11,789
Australasia - 78
177,618 186,170
Profit on ordinary activities United Kingdom 21,473 19,956
before tax Rest of Europe (1,216) (1,815)
North America (451) 2,204
South and Central America 2,832 2,928
Australasia - 5,024*
Net interest (12,481) (11,752)
10,157 16,545
* This includes the profit on sale of investments and joint ventures
Net assets United Kingdom 346,937 343,789
Rest of Europe 28,494 25,286
North America 62,961 68,474
South and Central America 11,351 10,161
Net debt (Note 6) (149,112) (152,630)
300,631 295,080
TBI PLC
Notes to the financial statements (continued)
31 March 2003
2. Net interest payable 2003 2002
£'000 £'000
Interest payable and similar charges
Interest payable on bank and similar loans 11,057 13,256
Interest on finance lease and hire purchase arrangements 390 419
Bank charges 396 298
Amortisation of debt issue costs 479 483
Total 12,322 14,456
Interest receivable and similar income
Short term deposits and corporate bonds 1,385 1,272
Interest receivable from other investments 63 1,432
Forgiveness of accrued interest receivable - exceptional (1,607) -
Total (159) 2,704
Net interest payable 12,481 11,752
3. Tax
2003 2002
£'000 £'000
(a) Analysis of charge in the year
Current tax
UK corporation tax on profits for the year 1,350 -
ACT written off during the year - 236
Adjustments in respect of previous periods (46) (639)
1,304 (403)
Foreign tax 1,009 959
Total current tax (Note 3(b)) 2,313 556
Deferred tax
Origination and reversal of timing differences 1,640 5,841
Total deferred tax 1,640 5,841
Total tax on profit on ordinary activities 3,953 6,397
Current tax assessed for the year takes into account tax relief claimed at the
UK standard rate of corporation tax of 30% on:
• the exceptional cost of £1.0 million arising on the
additional cost on disposal of the property business
• the exceptional cost of £1.6 million arising on the
forgiveness on accrued interested receivable
TBI PLC
Notes to the financial statements (continued)
31 March 2003
3. Tax (continued)
(b) Factors affecting the current tax charge for the year
The current tax assessed for the year is lower than the standard rate of corporation tax in the UK of 30%.
The differences are explained below:
2003 2002
£'000 £'000
Profit before tax 10,157 16,545
Profit multiplied by standard rate of corporation tax in the UK of 30% 3,047 4,964
(2002: 30%)
Accelerated capital allowances (1,695) (1,384)
Other timing differences (486) (174)
Tax losses (344) (5,823)
ACT written off - 236
Adjustments relating to prior year (46) (639)
Permanent differences 1,814 3,329
Higher tax rates on overseas earnings 23 47
Current tax charge for year (Note 3(a)) 2,313 556
4. Dividends
2003 2002 2003 2002
Pence per share Pence per share £'000 £'000
Interim dividend - paid 0.70 0.70 3,912 3,912
Final dividend - proposed 1.60 1.60 8,942 8,942
2.30 2.30 12,854 12,854
5. Earnings per share
Earnings per share have been calculated in accordance with FRS 14, 'earnings per
share', by dividing the profit for the financial year by the weighted average
number of ordinary shares in issue during the year, based on the following
information:
2003 2002
Profit for the financial year (£'000) 4,598 8,239
Earnings before amortisation and exceptional items (£'000) 15,995 19,699
Basic weighted average share capital 559 559
(number of shares, million)
Diluted weighted average share capital 559 560
(number of shares, million)
The difference between the basic and the diluted weighted average number of shares is wholly attributable to
outstanding share options.
TBI PLC
Notes to the financial statements (continued)
31 March 2003
5. Earnings per share (continued)
The calculation of earnings per share before amortisation and exceptional items
is based on the following analysis:
2003 2002
£'000 £'000
Profit for the financial year 4,598 8,239
Exceptional items 4,912 4,285
Amortisation 8,280 8,244
Tax effect on above adjustments (1,795) (1,069)
15,995 19,699
The earnings per share before amortisation and exceptional items have been
presented as the directors consider that this provides a more meaningful
indication of the Group's underlying financial performance.
6. Analysis of net debt
Cash Loan Other bank Sub total Debt due Debt due Finance lease Total
note deposits within after one and hire
receivable one year year purchase
arrangements
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 31 March 2002 4,478 20,000 30,703 55,181 (9,074) (191,032) (7,705) (152,630)
Cashflow (1,358) (19,000) (4,699) (25,057) 10,689 13,532 2,572 1,736
Non-cash changes - (1,000) - (1,000) (10,264) 9,787 (945) (2,422)
Exchange movements (444) - (912) (1,356) 123 5,414 23 4,204
At 31 March 2003 2,676 - 25,092 27,768 (8,526) (162,299) (6,055) (149,112)
At 31 March 2001 4,063 20,000 23,583 47,646 (2,874) (222,050) (6,999) (184,277)
Cashflow 416 - 7,128 7,544 (1,921) 27,194 2,355 35,172
Non-cash changes - - - - (4,280) 3,797 (3,061) (3,544)
Exchange movements (1) - (8) (9) 1 27 - 19
At 31 March 2002 4,478 20,000 30,703 55,181 (9,074) (191,032) (7,705) (152,630)
The funding arrangements at London Luton Airport Group Limited impose
restrictions on the transferability of net debt items held at London Luton
Airport Group Limited to other Group companies without the funder's consent.
The funding arrangements at Orlando Sanford International, Inc. impose
restrictions on the transferability of net debt items held at Orlando Sanford
International, Inc. to other Group companies without the funder's consent.
TBI PLC
Airport operational information
Airport ownership with a controlling interest
At 31 March At 31 March At 31 March At 31 March At 31 March At 31 March
2003 2002 2003 2002 2003 2002
London Luton Belfast International Cardiff International
Airport Airport Airport
Total passengers ('000)
Charter 1,033 1,402 725 781 1,006 1,133
Scheduled 591 562 355 1,048 253 322
Low cost 4,950 4,596 2,589 1,840 255 70
Transit 25 37 25 16 9 16
Total 6,599 6,597 3,694 3,685 1,523 1,541
Terminal passengers
Spend per head £4.05 £4.02 £2.18 £2.28 £2.85 £2.75
Net passenger supplement £3.19 £3.17 £2.70 £3.43 £5.60 £6.07
per head
Total £7.24 £7.19 £4.88 £5.71 £8.45 £8.82
Charter services
Number of tour operators 23 25 22 23 40 36
Number of seats offered 1,205 1,656 812 890 1,097 1,250
('000)
New charter destinations 1 3 1 - 7 6
Scheduled services
Number of major airlines 5 5 3 7 3 3
Number of seats offered 788 777 543 1,725 451 572
('000)
Low cost services
Number of major airlines 3 2 4 2 2 1
Number of seats offered 6,379 5,648 3,538 2,440 487 99
('000)
Freight tonnage 21,342 25,242 45,819 46,413 3,071 2,881
Some of the scheduled services from London Luton - Amsterdam, Barcelona,
Belfast, Dublin, Edinburgh, Geneva, Glasgow, Malaga, Nice, and Paris.
Some of the scheduled services from Belfast International Airport - Amsterdam,
Birmingham, Bristol, Cardiff, Edinburgh, Glasgow, Liverpool, London Gatwick,
London Luton and London Stansted.
Some of the scheduled services from Cardiff International Airport - Amsterdam,
Dublin, Edinburgh, Geneva, Glasgow, Malaga, Milan, Munich, Paris and Toulouse.
Airport ownership with a controlling interest, shown above, relate to airports
which are either owned or operated under long term agreements.
TBI PLC
Airport operational information
Airport ownership with a controlling interest (continued)
At 31 March At 31 March At 31 March At 31 March At 31 March At 31 March
2003 2002 2003 2002 2003 2002
Orlando Sanford Stockholm Skavsta Airport Bolivian Airports
Total passengers ('000)
Charter 917 949 - - - -
Scheduled - 5 10 9 1,973 1,861
Low cost 210 233 321 255 - -
Transit 62 132 7 7 351 325
Total 1,189 1,319 338 271 2,324 2,186
Terminal passengers
Spend per head £3.18 £3.74 £1.95 £1.18 £1.32 £1.58
Net passenger supplement £1.16 £1.42 £0.79 £0.36 £2.33 £2.53
per head
Total £4.34 £5.16 £2.74 £1.54 £3.65 £4.11
Charter services
Number of tour operators 26 23 - - - -
Number of seats offered ('000) 1,158 999 - - - -
New charter destinations 2 12 - - - -
Scheduled services
Number of major airlines - 1 1 1 9 9
Number of seats offered ('000) - 10 35 51 3,518 3,838
Low cost services
Number of major airlines 2 1 1 1 - -
Number of seats offered ('000) 428 466 437 359 - -
Freight tonnage 6,937 7,719 15,055 11,790 5,354 5,680
Some of the services from Orlando Sanford - Allentown, Atlanta, Cancun,
Charlotte, London Gatwick, Manchester, Newburgh, Portsmouth, Punta Cana and San
Juan.
Some of the services from Stockholm Skavsta Airport - Frankfurt Hahn and London
Stansted.
Some of the services from the Bolivian Airports - Asuncion, Bogota, Caracas,
Lima, Mexico City, Miami, Panama City, Paris, Quito and Rio de Janeiro.
Airport ownership with a controlling interest, shown above, relate to airports
which are either owned or operated under long term agreements.
TBI PLC
Additional financial information
2003 2002
£'000 £'000
Total operating profit before depreciation, amortisation and
exceptional items
London Luton 21,305 20,413
Belfast International 10,015 15,619
Cardiff International 10,896 12,574
Orlando Sanford 778 1,085
Stockholm Skavsta (376) (960)
Bolivia 3,203 3,711
Airport Services 794 1,804
Airport Management - North America 1,174 998
- London Luton Airport 1,364 1,220
- Australia - 84
- Costa Rica 323 316
Total - airports division 49,476 56,864
Other operations 2,379 1,322
Head office (4,587) (5,125)
Total operating profit before depreciation, amortisation, and 47,268 53,061
exceptional items
Exceptional items (2,305) (9,112)
Depreciation - normal (13,045) (12,235)
- exceptional - (5,743)
Amortisation - normal (8,280) (8,244)
- exceptional - 5,630
Profit before interest, tax and profit on sale of investments 23,638 23,357
and joint ventures
(Loss)/profit on sale of investments and joint ventures (1,000) 4,940
Net interest payable excluding exceptional interest items (10,874) (11,752)
Exceptional interest items (1,607) -
Profit on ordinary activities before tax 10,157 16,545
Tax on profit on ordinary activities (3,953) (6,397)
Profit for the financial year 6,204 10,148
Profit attributable to shareholders before amortisation and 15,995 19,699
exceptional items (Note 5)
Earnings per share before amortisation and exceptional items 2.86p 3.52p
TBI PLC
Additional financial information (continued)
Turnover from owned and managed airports
2003 2002
£'000 £'000
London Luton 64,858 64,526
Belfast International 27,007 32,809
Cardiff International 21,882 22,735
Orlando Sanford 9,121 10,243
Stockholm Skavsta 3,899 3,025
Bolivia 10,782 11,473
Total 137,549 144,811
Owned and managed airports relate to airports which are either owned or operated
under long term agreements.
Accounting Policy
This preliminary announcement has been prepared on the basis of accounting
policies consistent with those set out in the annual report and accounts for the
year ended 31 March 2002.
Audit Status
The financial information set out in this announcement does not constitute the
Group's statutory accounts for the years ended 31 March 2003 or 31 March 2002.
The financial information has, however, been extracted from statutory accounts
for those years which have been audited. The auditors' reports on those
statutory accounts were unqualified.
This preliminary announcement was approved by the Board on 9 June 2003.
This information is provided by RNS
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