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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Alpha Airports | LSE:AAP | London | Ordinary Share | GB0000281328 | ORD 10P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 109.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:3767K Alpha Airports Group PLC 31 March 2005 Alpha Airports Group Plc Preliminary Results for the Year Ended 31 January 2005 Unaudited 31 March 2005 * Sales growth of over 10% year on year benefiting from continuing growth at the UK's regional airports and ongoing recovery in long-haul traffic. * Retail sales growth of 11.3% and Inflight Retail sales growth of 40.6 %. * As indicated in our pre-close statement, adjusted Group pre-tax profits* down nearly 13% to #18.9m (2003/04: #21.7m) reflecting the start up losses on certain new businesses and the investments we have made in the Flight Services business to enhance prospects for future profitable growth. Profit before taxation of #11.7m (2003/04: #17.4m) after deducting exceptional charges of #4.0m. * Retail operating profit was 32.9% ahead of the prior year. * Maintained modest gearing and good interest cover despite capital investment spend of #16.2m, extra working capital investment of #15.5m and #4.5m net spend on acquisitions and disposals, all reflecting our ongoing business growth. Net debt increased to #19.3m (2003/04: net cash #1.9m). * Final dividend per share increased 7.1% to 3.0p (2003/04: 2.8p) giving a full year dividend of 4.0p, up 5.3% from 2003/04 (3.8p). * Successful launch of award winning 'Blue Sky' tray-less meal service in November is generating significant UK and European airline interest. * The new financial year has started as planned and trading is in line with expectations. * Adjusted pre-tax profit and adjusted earnings per share are before goodwill amortisation and exceptional items and are presented to assist readers to assess the underlying trading performance. Commenting on the Preliminary results, Kevin Abbott, Chief Executive, said: "Although underlying trading in the second half was in line with expectations, profitability was impacted by the significant investment made to support future business growth. Whilst this is disappointing in the short term, we believe these initiatives will lead to enhanced growth prospects and performance in the near and long term. We are seeing a continuing flow of opportunities to develop the business and, with a healthy balance sheet and recovering markets, we are well positioned to take our business forward in the current year." Enquiries: Alpha Airports Group Plc Kevin Abbott, Chief Executive Tel: 020 7554 1400 (today) Heather McRae, Finance Director Tel: 020 8580 3200 (thereafter) Gavin Anderson & Company Laura Hickman/ Amelia Ward Tel: 020 7554 1400 Website: www.alpha-group.com Introduction Alpha's business is providing retailing and catering services to the world's airlines and airports. Our essence is "People making travel special." Alpha currently operates from over 150 retail and catering outlets at 74 airports in 13 countries across the globe. Group 2004/5 was a year of significant investment in the business to support future growth. We are working on an unprecedented number and scale of opportunities to build and grow the business, both organically and by acquisition. Group sales including turnover from joint ventures for the twelve months ended 31 January 2005 were 12.8% ahead of the previous year at #497.2m (2003/04: #440.9m). Turnover, excluding joint ventures, was 10.6% above last year at #487.8m. This increase arose from continuing strong growth of short-haul passengers and flights at the UK's regional airports and recovery in long-haul traffic particularly at London Heathrow and in Jordan. We made a strong start in the first half, which weakened slightly in the second half due to the impact of the loss of the Air Canada business at Heathrow. A disappointing pre-tax profit (before exceptional items and goodwill amortisation) of #18.9m was 12.9% below the previous year (2003/04: #21.7m) and can be attributed to a number of specific Flight Services development issues. Firstly, in 2002 we made a decision to grow the business in Australia and move towards becoming a recognised international flight caterer. We have been successful during the year in securing new contracts with Cathay Pacific and Royal Brunei. However, as previously indicated this new business has resulted in significant start-up costs being incurred in the current year as four flight service units were opened but are temporarily operating at an uneconomic level of utilisation; we are actively seeking to secure additional business in 2005/6 and beyond, in what we strongly believe is an important mid to long-term investment opportunity. We have also set-up a global inflight duty free programme for Qantas from our Australian flight service units in Sydney, Melbourne, Brisbane and Perth. Whilst this set-up initially proved a major challenge, we have transferred best practice from the UK and the back-office support, controls and a strong, qualified retail team are now well embedded. Unfortunately, we incurred a significant start-up loss in the period, but with the support and recognition of Qantas, we have now redefined and extended our contract to ensure a viable base for both partners going forward. In the UK, the delay between the start-up of our new American Airlines contract and the September loss of Air Canada, and the resultant transition costs between these two major customers as we retained our highly qualified staff for over three months to ensure a successful American Airlines start-up, contributed to the reduced profit levels in UK Flight Services. In addition, the investments made in our new IT systems within our growing UK Flight Services bonded stores to better manage our wide range of high value stocks, gave rise to significant one-off costs during training and implementation, again leading to temporary losses being incurred. We are confident that with new operating procedures now in place, we will reduce costs in the current year, and can move to centralised control and stocking in late 2005 to achieve a step-change in the future capital commitment and profitability of this major growth business. Finally, our business in the Netherlands has been in a period of transition from short-haul charter logistics to quality long-haul catering and has incurred significant losses in the year. Flight Services Sales (including turnover of joint ventures) within our Flight Services division increased by 13.9% to #277.9m (2003/04: #244.0m) reflecting the return of long-haul traffic and the ongoing growth of low cost airlines operating from the UK regional airports. Turnover, excluding joint ventures, increased by 10% to #268.5m with a 38% reduction in operating profit (before exceptional items and goodwill amortisation) to #8.8m (2003/04: #14.2m) as a result of the issues highlighted above. Our UK Flight Services business enjoyed a 2.1% growth in meals served and maintained its market share despite the loss in the second half of our Air Canada service contract at London Heathrow. During the year we have been very successful in securing future new business, generating 14.4% growth in future UK and European sales. The major new contract wins in the second half were with American Airlines at Heathrow and Gatwick, and Excel Airways at Gatwick. A key to future business growth is our innovation capability, which will provide further step-changes in the quality and cost of our service offerings. In November 2004, we launched our creative and Mercury award winning Blue Sky service with MyTravel Airways on a globally back-catered basis. Blue Sky offers charter passengers an innovative tray-less meal and a more contemporary flexible and high quality inflight meal experience. Blue Sky also provides significant extra service time for the cabin crew and extra galley space for the airline to use for either extending cost-effective back catering, or an increased range of inflight retailing services. To support the most cost-effective servicing of Blue Sky in the UK, we have transformed one of our Birmingham flight service units to become a central food assembly unit. We are extremely pleased with the progress of this service and believe that many of our UK customers will be moving to a similar service proposition in the years ahead. Alpha can also see opportunities to offer such services to grow our mainland European business on a highly competitive basis with relatively low capital cost. Whilst our Jordan business has continued to prosper with the return of long-haul traffic, our Amsterdam unit has struggled to adapt cost-effectively to the reshaped customer mix. We have had to bring in the new culinary skill sets required, and unfortunately have had to release many of our experienced, long-service logistics staff. This redundancy programme has cost #1.4 million, and we have also incurred an additional #1 million operating loss in the year. Whilst we are confident of an eventual return to profitability, we have made provision to write-off the freehold property assets dedicated to this business. In Australia, we have been successful in securing major new clients for our recently acquired and refurbished flight kitchens at the international gateway airports. However, with these kitchens operating currently at very low capacity utilisations, we will continue to incur small ongoing losses until further major customer gains are achieved. Our Inflight Retail sales advanced 40.6% in the year reflecting the tremendous growth of low fare travel, our growing onboard spends per passenger and new business won. We have established additional bases for our airline customers in Germany and Italy, with plans well advanced for further European bases and expanded service offerings being developed for the current year. Following our success with MyTravel last year, we have now been nominated to provide similar inflight procurement and ranging services for Monarch Airlines with effect from May 2005. Retail Another strong year for the Retail division with sales 11.4% ahead to #219.3m (2003/04: #196.9m) and profits ahead 32.9% to #11.7m (2003/04: #8.8m) despite the expansion of the EU from May 2004 and the impact of the Asian tsunami at the end of December. In the UK, our Alpha Airport Shopping 'pink' shops generated a 7.4% increase in sales on a strong regional airport passenger base some 8.3% ahead of the previous year. As anticipated, sales of duty free liquor and tobacco products were down 2.2% as a result of the EU expansion. Once again, our World News specialist stores recorded strong growth with like-for-like sales ahead of last year by 11.7%. The ongoing, successful performance of this brand was one of the key reasons we were awarded a new 7-year contract at Birmingham International Airport Terminal 1, which commenced in January 2005. Our Glorious Britain brand, which operates primarily at Heathrow, had another very successful year with sales up 26.8% on the previous year's record. We expanded our airport Retail Catering offer to Europe last year with a small but successful concession which opened at Skavsta, Sweden, in April. This contributed to the 13.9% growth in turnover of this business unit. With the development of London Luton Airport currently underway, our airside catering profit share contract will terminate in the early part of summer 2005. Our UK business has secured a new contract to operate an Alpha Airport Shopping 'pink' shop, plus World News and Retail Catering outlets at the new Doncaster Robin Hood airport, which commences at the end of April. Our duty free business based in Florida had an excellent year, with passenger growth 21.6% ahead of the previous year leading to a 28% increase in US$ sales, reflecting focussed improvements in our range and hence spend per passenger. After several years of an onerous, loss-making contract, we were delighted to be awarded a new 5-year contract extension by the Greater Orlando Aviation Authority, Florida, commencing 31 July 2005. This contract extension will require a major capital investment of over #1m to upgrade the shops in advance of the critical summer season. In Asia, our Sri Lankan business was performing exceptionally well, with a year on year 18.6% passenger growth up until the end of December, when the tragic events of the Asian tsunami impacted results. Thankfully none of our staff were lost or injured, and our business suffered no loss to property or stock. By the end of January, passenger growth for the 12 months had declined to 15.6%, but we still enjoyed a record growth in sales of over 24% in US$ during the year as a whole. Our newly enlarged and relocated arrivals shop opened in early December, with further investment planned in departures during 2005 to maximise the opportunities available with our 5-year contract extension. Exceptional charges As previously announced our business in the Netherlands has undergone substantial change during the year and we have had to undertake our second significant redundancy programme towards the end of the year at a cost of #1.4m. We have also provided an impairment charge of #3.9m against our freehold property value in the Netherlands. In the UK, the launch of our award winning Blue Sky Service offering has removed work from local units to our central Birmingham facility. This has resulted in 107 redundancies in the UK at a cost of #0.9m. Offsetting these charges of #6.2m is the release of our onerous contract provision in relation to the US business in Orlando. The performance of the business over the last 18 months and our expectations for the remaining six months of the contract means we no longer require #1.5m of this provision and accordingly it has been released. Dividend The Board has recommended an increase in the final dividend of 7.1% to 3.0 pence per share, giving a full year dividend per share of 4.0 pence (2003/04: 3.8 pence). The dividend is payable on 8 June to shareholders on the register as at 6 May 2005. Capital Investment We have made significant capital investment in the business this year with expenditure in excess of #16m, the highest in recent years and ahead of depreciation of some #10m. Major projects in Flight Services included a new 'bonded' store for our flight business at Manchester and new hi-lift vehicles for the increased UK and Eire business volumes and for our expanding business in Australia. Within Retail, a significant new IT investment is underway, and new or expanded shops were opened at Newcastle and Manchester. Acquisitions and Disposals In November 2004, we exchanged contracts to acquire 60% of the share capital of Istanbul Duty Free ("IDF") for initial consideration including acquisition costs of Euro6.1m (#4.2m) with two payments of contingent deferred consideration of Euro0.5m (#0.3m) each. IDF operates duty free shops at two airports, together with duty free border and port shops and also provides inflight retailing to a number of local airlines. We also increased our shareholding in our Italian associate company, Servair Airchef from 25% to 50% at a cost of #2.9m. This followed the exercise of an option by the vendor. Our major shareholder, Servair, also increased its investment in Servair Airchef to 50% at the same time. Due to the success of our Jordan investment, our local partner exercised his right to acquire a further 10% equity stake in Jordan Flight Catering Company Limited. The disposal generated sales proceeds of #1.7m and a profit on disposal of #0.3m. During July we sold our 20% investment in Calibre Airline Systems as part of a full sale of that company. Proceeds of #0.5m were received realising a small profit on disposal of #0.4m. Net Debt Net debt increased during the year to #19.3m (2003/04: cash of #1.9m), however our balance sheet remains strong and gearing levels remain conservative. Increased capital investment, acquisitions net of disposals costing #4.5m and increased working capital, mostly inventory, to support the business growth were the main contributing factors to this net debt increase. Special Reserve During the year we released to distributable reserves the sum of #152.3m previously retained as a "special reserve" in the accounts of the Company improving the capital structure of the business and giving the Company increased flexibility for the future. This "special reserve" was created in 1994 as a result of a capital reduction following the flotation of the Group in January 1994. The "special reserve" could not form part of the Company's distributable reserves until the Directors had satisfied themselves that all conditions attached to the reserve no longer applied, and this event occurred during the year. Our People Creating a great place to work for all our staff remains a critical strategic priority. Our successful Alpha Heroes reward and recognition programme has been extended in the current year to cover all our UK, Eire and Jersey staff, with a Local Heroes scheme developed to be complementary at the local unit level. Our employees have wholeheartedly endorsed these initiatives, with over 3,000 nominations received to recognise those staff that "go the extra mile". In our annual, independent, confidential staff survey, we maintained an excellent upper quartile performance when benchmarked against other quality UK employers, with our key satisfaction score of 76%. Our staff turnover continued to decline from 24.3% in 2003/04 to 21.9% in 2004/05. We are continuing to invest to build a great place to work, with a new tailored management development course launched with Henley Management College to build a "future leaders" capability in depth across the Group. Strategy The Group's strategy is to continue to focus on retailing and catering for airlines and airports. Our pipeline of opportunities continues at a high level of activity and we are confident of further success with a number of these projects. Within Flight Services, we will continue to develop our Blue Sky concept launched last autumn to secure new business growth with this Mercury award-winning, innovative offer. Internationally, our Flight Services credentials should enable us to capitalise on market opportunities in the UK, Europe, the Middle East and Australia. In Retail, we have been focussing our efforts on opportunities at a European level and will continue to work closely with our UK partners to extend the range of services provided to them. Outlook The 2005/06 year has started as planned and trading remains in line with expectations. Within Asia, passenger figures as a result of the tsunami are 15.7% down year-on-year, and we anticipate the trend to continue throughout the first half with a recovery in the second half of the year. Over the past four years we have transformed our business models to adapt to a larger faster growing more competitive aviation market, with significant investment in people, innovation and infrastructure. We continue to concentrate on further enhancing our core business offerings and with a healthy balance sheet, excellent customer and supplier relationships and a strong Alpha team in place, we are well positioned to take the business forward and capitalise on the investments made. Group Profit and Loss Account (unaudited) for the year ended 31 January 2005 Before Exceptional Exceptional Items Items (Note 2) Total Total 2005 2005 2005 2004 Notes #m #m #m #m ------------------- ---- ------- ------- ----- ----- Turnover (including share of joint venture) 1 497.2 - 497.2 440.9 Less share of turnover of joint venture (9.4) - (9.4) - ------------------- ---- ------- ------- ----- ----- Turnover 487.8 - 487.8 440.9 Cost of sales (315.1) (2.3) (317.4) (281.5) * ------------------- ---- ------- ------- ----- ----- Gross profit 172.7 (2.3) 170.4 159.4 Net operating expenses before goodwill amortisation (153.2) (2.4) (155.6) (137.6) * Amortisation of goodwill (2.9) - (2.9) (3.2) ------------------- ---- ------- ------- ----- ----- Group operating profit 16.6 (4.7) 11.9 18.6 ------- ------- ----- ----- Income from interests in associated undertakings 1.0 - 1.0 0.5 Associated undertakings goodwill amortisation (0.3) - (0.3) (0.4) ------- ------- ----- ----- 0.7 - 0.7 0.1 ------- ------- ----- ----- Profit on part disposal of subsidiary undertaking - continuing operations - 0.3 0.3 - Profit on disposal of associate - 0.4 0.4 - ------------------- ---- ------- ------- ----- ----- Profit on ordinary activities before interest 17.3 (4.0) 13.3 18.7 Interest receivable and similar income - - - 0.1 Interest payable and similar charges (1.6) - (1.6) (1.4) ------------------- ---- ------- ------- ----- ----- Profit on ordinary activities before taxation 1 15.7 (4.0) 11.7 17.4 Taxation on profit on ordinary activities 3 (5.9) 0.8 (5.1) (6.7) ------------------- ---- ------- ------- ----- ----- Profit on ordinary activities after taxation 9.8 (3.2) 6.6 10.7 Minority interest (equity) (2.3) - (2.3) (1.6) ------------------- ---- ------- ------- ----- ----- Profit for the financial year 7.5 (3.2) 4.3 9.1 Equity dividends 4 (7.0) - (7.0) (6.5) ------------------- ---- ------- ------- ----- ----- Retained (loss)/profit for the financial year 0.5 (3.2) (2.7) 2.6 ------------------- ---- ------- ------- ----- ----- Earnings per share 5 2.49p 5.33p Diluted earnings per share 5 2.46p 5.28p ------------------- ---- ------- ------- ----- ----- All results relate to continuing operations. *The results for the year ended 31 January 2004 included net pre-tax exceptional charges of #0.7m as explained in Note 2. Statement of total recognised gains and losses for the year ended 31 January 2005 2005 2004 #m #m ------------------------------- ------- ------- Profit for the financial year 4.3 9.1 Currency translation differences on foreign currency net assets and certain loans (0.9) 0.2 ------------------------------- ------- ------- Total recognised gains for the financial year 3.4 9.3 ------------------------------- ------- ------- There are no differences between the reported results for the current and prior year and the results for those years on an historical cost basis. Balance Sheets (unaudited) at 31 January 2005 Group Company ------------ ----------- 2005 2004 2005 2004 (restated)* (restated)* Notes #m #m #m #m --------------------- ---- ------ -------- ------ ------- Fixed assets Intangible assets 11.5 11.3 - - Tangible assets 58.4 56.0 - - Investments in subsidiaries - - 201.0 201.0 Investments in associate 0.5 3.7 - - Interest in joint venture: ------ -------- ------ ------- - share of gross assets 6.5 - - - - share of gross liabilities (5.5) - - - - goodwill arising on acquisition 4.7 - - - ------ -------- ------ ------- 5.7 - - - --------------------- ---- ------ -------- ------ ------- 76.1 71.0 201.0 201.0 --------------------- ---- ------ -------- ------ ------- Current assets Stocks 32.1 22.5 - - Debtors 38.5 28.2 57.3 47.6 Cash at bank and in hand 6 10.8 8.6 - - --------------------- ---- ------ -------- ------ ------- 81.4 59.3 57.3 47.6 --------------------- ---- ------ -------- ------ ------- Creditors: amounts falling due within one year Bank and other borrowings (30.1) (6.7) (26.6) (20.3) Other creditors (69.7) (62.5) (18.2) (12.8) --------------------- ---- ------ -------- ------ ------- (99.8) (69.2) (44.8) (33.1) --------------------- ---- ------ -------- ------ ------- Net current (liabilities)/assets (18.4) (9.9) 12.5 14.5 --------------------- ---- ------ -------- ------ ------- --------------------- ---- ------ -------- ------ ------- Total assets less current liabilities 57.7 61.1 213.5 215.5 Creditors: amounts falling due after one year (0.5) - - - Provisions for liabilities and charges (1.8) (5.9) - - --------------------- ---- ------ -------- ------ ------- Total net assets 1 55.4 55.2 213.5 215.5 --------------------- ---- ------ -------- ------ ------- Capital and reserves Called up share capital 17.4 17.2 17.4 17.2 Share premium account 43.7 42.6 43.7 42.6 Capital redemption reserve 0.4 0.4 0.4 0.4 Other reserves - - - 152.3 Profit and loss account (8.5) (6.3) * 152.0 3.0 * --------------------- ---- ------ -------- ------ ------- Shareholders' funds 7 53.0 53.9 213.5 215.5 Minority interests (equity) 2.4 1.3 - - --------------------- ---- ------ -------- ------ ------- Total equity 55.4 55.2 213.5 215.5 --------------------- ---- ------ -------- ------ ------- *Amounts for the year ended 31 January 2004 have been restated as a result of the adoption of UITF 38 "Accounting for ESOP Trusts" (see Note 7). Approved by the Board of Directors on 31 March 2005 Kevin Abbott Heather McRae Chief Executive Finance Director Group Cash Flow Statement (unaudited) for the year ended 31 January 2005 2005 2004 Notes #m #m ---------------------------- ---- ---- ---- Net cash inflow from operating activities 8.1 13.4 31.1 Dividends received from associates 0.2 0.2 Dividends received from joint ventures 0.1 - Returns on investments and servicing of finance Interest received - 0.1 Interest paid (1.6) (1.5) Dividends paid to minority shareholders in subsidiary undertakings (2.2) (1.1) ---------------------------- ----- ---- ---- Net cash outflow from returns on investments and servicing of finance (3.8) (2.5) ---------------------------- ----- ---- ---- Taxation (4.7) (6.5) -------------------------- ----- ---- ---- Capital expenditure and financial investment Purchase of tangible fixed assets (16.2) (13.6) Disposal of tangible fixed assets 0.1 0.4 -------------------------- ----- ----- ----- Net cash outflow for capital expenditure and financial investment (16.1) (13.2) -------------------------- ----- ----- ----- Acquisitions and disposals Purchase of joint venture 9 (2.9) (0.7) Purchase of business 10 (4.2) - Cash acquired on purchase of business 10 0.4 - Part disposal of subsidiary undertaking - continuing operations 11 1.7 - Disposal of associate 11 0.5 - ------------------------- ----- ----- ----- Net cash outflow for acquisitions and disposals (4.5) (0.7) ------------------------- ----- ----- ----- Equity dividends paid (6.6) (6.2) ------------------------- ----- ----- ----- Net cash (outflow)/inflow before financing (22.0) 2.2 ------------------------- ----- ----- ----- Financing Increase/(decrease) in unsecured loans less than 1 year 21.1 (3.0) Issue of ordinary shares 1.3 0.2 ------------------------- ----- ----- ----- Net cash inflow/(outflow) from financing 22.4 (2.8) ------------------------- ----- ----- ----- Increase/(decrease) in cash 0.4 (0.6) ------------------------- ----- ----- ----- Notes to the Financial Information 1. Segmental analysis Turnover Profit before Taxation Net Assets 2005 2004 2005 2004 2005 2004 (restated) #m #m #m #m #m #m -------------------------- ----- ----- ----- ------ ----- ------ (a) Business sector analysis Flight Services - continuing operations * 268.5 244.0 7.8 13.7 44.4 36.7 ** - share of operating profit of associates - - 0.6 0.5 - - - share of joint venture 9.4 - 0.4 - 5.7 - - associates and joint venture goodwill amortisation - - (0.3) (0.4) - - - subsidiaries goodwill amortisation - - (1.1) (1.4) - - - exceptional items (continuing operations) - - (6.2) (2.9) - - - profit on part disposal of subsidiary undertaking - continuing operations - - 0.3 - - - - profit on disposal of associate - - 0.4 - - - -------------------------- ----- ----- ----- ------ ----- ------ 277.9 244.0 1.9 9.5 50.1 36.7 -------------------------- ----- ----- ----- ------ ----- ------ Retail - continuing operations * 219.3 196.9 11.7 8.8 24.6 16.6 ** - subsidiaries goodwill amortisation - - (1.8) (1.8) - - - exceptional items (continuing operations) - - 1.5 2.2 - - -------------------------- ----- ----- ----- ------ ----- ------ 219.3 196.9 11.4 9.2 24.6 16.6 -------------------------- ----- ----- ----- ------ ----- ------ -------------------------- ----- ----- ----- ------ ----- ------ 497.2 440.9 13.3 18.7 74.7 53.3 Net interest payable - - (1.6) (1.3) - - Net (borrowings)/cash - - - - (19.3) 1.9 -------------------------- ----- ----- ----- ------ ----- ------ Turnover, profit on ordinary activities before taxation and net assets 497.2 440.9 11.7 17.4 55.4 55.2 -------------------------- ----- ----- ----- ------ ----- ------ (b) Geographical analysis United Kingdom - continuing operations * 404.9 367.8 13.2 14.2 43.8 25.3 ** - exceptional items (continuing operations) - - (0.9) (0.3) - - -------------------------- ----- ----- ----- ------ ----- ------ 404.9 367.8 12.3 13.9 43.8 25.3 -------------------------- ----- ----- ----- ------ ----- ------ Rest of the World - continuing operations * 82.9 73.1 6.3 8.3 25.2 28.0 - share of operating profit of associates - - 0.6 0.5 - - - share of joint venture 9.4 - 0.4 - 5.7 - - associates and joint venture goodwill amortisation - - (0.3) (0.4) - - - subsidiaries goodwill amortisation - - (2.9) (3.2) - - - exceptional items (continuing operations) - - (3.8) (0.4) - - - profit on part disposal of subsidiary undertaking - continuing operations - - 0.3 - - - - profit on disposal of associate - - 0.4 - - - -------------------------- ----- ----- ----- ------ ----- ------ 92.3 73.1 1.0 4.8 30.9 28.0 -------------------------- ----- ----- ----- ------ ----- ------ 497.2 440.9 13.3 18.7 74.7 53.3 Net interest - - (1.6) (1.3) - - Net (borrowings)/cash - - - - (19.3) 1.9 -------------------------- ----- ----- ----- ------ ----- ------ Turnover, profit on ordinary activities before taxation and net assets 497.2 440.9 11.7 17.4 55.4 55.2 -------------------------- ----- ----- ----- ------ ----- ------ * Before goodwill amortisation and exceptional items. ** Amounts for the year ended 31 January 2004 have been restated as a result of the adoption of UITF 38 "Accounting for ESOP Trusts" (see Note 7). Turnover is disclosed by origin. There is no material difference in turnover by destination. Net interest payable has not been allocated recognising the centre's role and responsibility in allocating financial resources. 2. Exceptional items The results for the year ended 31 January 2005 include net exceptional items of #4.7m charged against operating profit, comprising redundancy payments in respect of UK Flight operations (#0.9m) and the Netherlands Flight operations (#1.4m), an impairment charge in respect of freehold property fixed assets in the Netherlands (#3.9m), partly offset by the release of #1.5m from the remaining onerous contract provision in Orlando, USA where trading performance has been better than forecast. In April 2004 a Group company disposed of 19.6% of its investment in a subsidiary which owns 51% of Jordan Flight Catering Company Limited, for a net consideration of #1.7m. The Group's profit on disposal, including disposal of related goodwill, was #0.3m. In July 2004 the Group disposed of its 20% shareholding in Calibre Airline Services Limited (an information technology company), for a net consideration of #0.5m, realising a profit on disposal of #0.4m. In the year ended 31 January 2004 the Group implemented a new management structure in Flight Services with a related redundancy cost of #2.9m. These costs were partly offset by the release of #2.2m from two onerous contract provisions. At Newcastle the Group exited a loss making contract during the year and no further provision was required. In Orlando, USA trading performance was better than forecast when the provision was established and consequently the provision was reduced to the directors' current best estimate of losses up until expiry of the contract in July 2005. 3. Taxation 2005 2004 #m #m ------------------------------------- ------ ------- Current tax United Kingdom Corporation tax at 30% (2003/04: 30%) 5.6 6.0 Double tax relief (1.9) (2.0) Tax on exceptional items (0.3) (0.4) Prior year adjustments (0.2) - ------------------------------------- ------ ------- 3.2 3.6 Overseas Corporation taxes 2.6 3.0 Share of taxation of associates 0.3 0.3 Share of taxation of joint venture 0.3 - Tax on exceptional items (0.5) (0.5) Prior year adjustments (0.2) (0.2) ------------------------------------- ------ ------- Total current tax 5.7 6.2 ------------------------------------- ------ ------- Deferred tax United Kingdom Origination and reversal of timing differences (0.5) 0.2 Tax on exceptional items - 0.3 ------------------------------------- ------ ------- (0.5) 0.5 Overseas Origination and reversal of timing differences (0.1) - ------------------------------------- ------ ------- Total deferred tax (0.6) 0.5 ------------------------------------- ------ ------- ------------------------------------- ------ ------- Total tax on profit on ordinary activities 5.1 6.7 ------------------------------------- ------ ------- Taxation as a percentage of profit before taxation 44% 38% Taxation as a percentage of profit before taxation before exceptional items 35% 40% Taxation as a percentage of profit before taxation, exceptional items and goodwill amortisation 31% 33% ------------------------------------- ------ ------- 3. Taxation (continued) The standard rate of tax for the year, based on the UK standard rate of corporation tax is 30%. The actual tax charge for the current and the previous year exceeds the standard rate for the reasons set out in the following reconciliation: 2005 2004 #m #m ------------------------------- ------- ------- Profit on ordinary activities before tax 11.7 17.4 ------------------------------- ------- ------- Tax on profit on ordinary activities at standard rate (30%) 3.5 5.2 Factors affecting tax charge for the period: Adjustments to tax in respect of prior period (0.4) (0.2) Adjustment in respect of foreign tax rates (0.9) (0.7) Expenses not deductible for tax purposes 2.7 2.4 Capital allowance in excess of depreciation 0.1 0.2 Unrelieved overseas losses 1.1 - Other short term timing differences (0.4) (0.7) ------------------------------- ------- ------- Total actual amount of current tax 5.7 6.2 ------------------------------- ------- ------- 4. Equity Dividends 2005 2004 #m #m ------------------------------- ------- ------- Interim dividend paid of 1.0p per ordinary share (2003/04: 1.0p) 1.8 1.7 Proposed final dividend of 3.0p per ordinary share (2003/04: 5.2 4.8 2.8p) ------- ------- ------------------------------- Total dividend of 4.0p per ordinary share (2003/04: 3.8p) 7.0 6.5 ------------------------------- ------- ------- 5. Earnings per share Profit for the year Earnings per share ------------ -------------- 2005 2004 2005 2004 #m #m Pence Pence ------------------------ ------- ------- -------- -------- Profit for the financial year and earnings per share 4.3 9.1 2.49 5.33 Adjustment for profit on part disposal of continued operations (0.3) - (0.17) - Adjustment for profit on disposal of associate (0.4) - (0.23) - Adjustment for goodwill amortisation and impairment 3.2 3.6 1.86 2.11 Adjustment for exceptional items 4.7 0.7 2.73 0.41 Taxation relating to these items (0.8) (0.6) (0.46) (0.35) ------------------------ ------- ------- -------- -------- Adjusted profit and adjusted earnings per share 10.7 12.8 6.22 7.50 ------------------------ ------- ------- -------- -------- The weighted average number of shares in issue during the year was 172,366,466 (2003/04: 170,733,330). Earnings per share is calculated by dividing the profit for the financial year by the weighted average number of shares in issue during the year. Adjusted earnings per share is calculated by eliminating the effect of goodwill amortisation and exceptional items, adjusted for any tax effect. Diluted earnings per share of 2.46p (2003/04: 5.28p) is calculated by reference to the profit for the financial year of #4.3m (2003/04: #9.1m) and the weighted average number of shares in issue during the year of 172,366,466 (2003/04: 170,733,330), as adjusted for potentially dilutive ordinary shares of 2,113,322 (2003/04: 1,510,307). 6. Net (borrowings)/cash 2005 2004 #m #m ------------------------------- ------- --------- 6.1 Bank and other borrowings Unsecured loans (24.1) (3.0) Bank overdrafts (6.0) (3.7) ------------------------------- ------- --------- Total bank and other borrowings due within one year (30.1) (6.7) ------------------------------- ------- --------- 6.2 Net (borrowings)/cash Total bank and other borrowings (30.1) (6.7) Cash at bank and in hand 10.8 8.6 ------------------------------- ------- --------- Net (borrowings)/cash (19.3) 1.9 ------------------------------- ------- --------- 7. Reconciliation of movements in shareholders' funds 2005 2004 (restated)* #m #m ----------------------------------- ------ ------- Profit for the financial year 4.3 9.1 Dividends (7.0) (6.5) ----------------------------------- ------ ------- Retained profit for the financial year (2.7) 2.6 Currency translation differences on foreign currency net assets and certain loans (0.9) 0.2 Issue of shares 1.3 0.2 Credit in respect of long term incentive plan amortisation charge 0.2 0.2 Goodwill charged to the profit and loss account previously written off directly to reserves 1.2 1.2 ----------------------------------- ------ ------- Net (decrease)/increase to shareholders' funds (0.9) 4.4 Opening shareholders' funds as previously reported 54.1 49.9 Prior year adjustment (see below) (0.2) (0.4) ----------------------------------- ------ ------- Opening shareholders' funds as restated 53.9 49.5 ----------------------------------- ------ ------- Closing shareholders' funds 53.0 53.9 ----------------------------------- ------ ------- * Amounts for the year ended 31 January 2004 have been restated as a result of the adoption of UITF 38 "Accounting for ESOP Trusts". There is no effect on the current or prior periods' Group profit as a result of this change in accounting policy; the Group's balance sheet has been restated for prior periods to reflect the shares purchased in July 2002 for the Chief Executive's Long Term Incentive Plan ("LTIP") as a deduction from shareholders' funds (previously included within investments). The LTIP was fully written off in the year ended 31 January 2005 and therefore there is no effect on the Group's balance sheet as at 31 January 2005. The effect on the Group's balance sheet at 31 January 2004 and 31 January 2003 was to decrease investments and shareholders' funds by #0.2m and #0.4m respectively. 8. Notes to the cash flow statement 8.1 Reconciliation of operating profit to net cash inflow from operating activities 2005 2004 #m #m ---------------------------------- -------- ------- Operating profit 11.9 18.6 Depreciation 10.0 9.9 Goodwill amortisation 2.9 3.2 Long term incentive plan amortisation charge 0.2 0.2 Fixed assets impairment 3.9 - (Increase) in stocks (7.3) (2.7) (Increase) in debtors (10.4) (2.6) Increase in creditors 2.2 4.5 ---------------------------------- -------- ------- Net cash inflow from operating activities 13.4 31.1 ---------------------------------- -------- ------- 8.2 Reconciliation of net cash flow to movement in net (debt)/cash 2005 2004 #m #m ------------------------------- ---------- -------- Increase in cash in the period 2.5 2.4 Increase in overdrafts in the period (2.1) (3.0) (Increase)/decrease in debt and lease financing (21.1) 3.0 ------------------------------- ---------- -------- Change in net (debt)/cash from cash flows (20.7) 2.4 Currency translation (0.5) (0.2) ------------------------------- ---------- -------- Movements in net (debt)/cash in period (21.2) 2.2 Net cash/(debt) at 1 February 1.9 (0.3) ------------------------------- ---------- -------- Net (debt)/cash at 31 January (19.3) 1.9 ------------------------------- ---------- -------- 8.3 Analysis of net (debt)/cash 1 February Cash Exchange 31 January 2004 flows movement 2005 #m #m #m #m -------------------------- ------- ------- -------- ------- Cash at bank and in hand 8.6 2.5 (0.3) 10.8 Overdrafts (3.7) (2.1) (0.2) (6.0) -------------------------- ------- ------- -------- ------- 4.9 0.4 (0.5) 4.8 Debt due within 1 year (3.0) (21.1) - (24.1) -------------------------- ------- ------- -------- ------- Total 1.9 (20.7) (0.5) (19.3) -------------------------- ------- ------- -------- ------- 9. Purchase of joint venture On 4 August 2004 the Group purchased a further 25% shareholding in Servair AirChef srl which, together with the original investment, made in February 2001, results in a total shareholding in the company of 50%, representing a joint investment with the Group's major shareholder, Servair. The original shareholding was reported as an associate, but from 4 August 2004 the investment has been reclassified as a joint venture. 10. Purchase of business On 3 November 2004, the Group signed a contract to acquire 60% of the share capital of Istanbul Duty Free, a company operating duty free concessions and shops at seven locations in Turkey and providing inflight retailing to three local airlines. The acquisition was completed on 14 December 2004 and the results of the company were consolidated from that date. 11. Disposal of businesses As previously discussed in Note 2 in July 2004 the Group disposed of its 20% shareholding in Calibre Airline Services Limited (an information technology company) and in April 2004 disposed of 19.6% of its share in Jordan Flight Catering Company Limited. 12. Preliminary announcement The preliminary results for the year ended 31 January 2005 are unaudited. The accounting policies are the same as those set out in the financial statements of the Group for the year ended 31 January 2004, except for the adoption by the Group of UITF 38 "Accounting for ESOP Trusts" by means of a prior year adjustment. The effect on the Group's profit and loss account and balance sheet are shown in Note 7. The financial information set out above does not constitute the Group's audited statutory accounts within the meaning of section 240 of the Companies Act 1985. The financial information for the year ended 31 January 2004 has been extracted from the statutory accounts for that year which have been delivered to the Registrar of Companies: the report of the auditors on those accounts was unqualified and did not contain a statement under section 237 (2) or (3) of the Companies Act 1985. The Group accounts for the year ended 31 January 2005 will be finalised on the basis of the financial information presented by the Directors in the preliminary announcement. 13. Dividend The record date for the final dividend is 6 May 2005 and payment date is 8 June 2005. 14. Issue of annual reports and accounts The Annual Report 2004/05 will be posted to shareholders by 29 April 2005. Copies may be obtained after this date from the Company Secretary, Alpha Airports Group Plc, Europa House, 804 Bath Road, Cranford, Middlesex, TW5 9US. Telephone No. 020 8580 3200. 15. Annual General Meeting The Annual General Meeting of Alpha Airports Group Plc will be held at the Conference Centre, Park Inn, Bath Road, Heathrow on 2 June 2005 at 11am. This information is provided by RNS The company news service from the London Stock Exchange END FR SDDEFSSISELD
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