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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 |
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Alpha Airports Group PLC
28 September 2006
Alpha Airports Group Plc
Interim Results for the Six Months Ended 31 July 2006
Alpha Airports Group Plc ("Alpha" or the "Group") is a leading aviation support
services company, providing retailing and catering services to over 100 airlines
and 83 airports in 15 countries around the world.
Financial Highlights
H1 2006/07 H1 2005/06 Change Full Year
2005/06
Revenue #278.9m #268.8m +3.8% #550.9m
Adjusted Profit before tax* #8.3m #6.2m +33.9% #18.5m
Profit before tax #4.2m #6.2m (32.3%) #18.4m
Basic earnings per share 1.32p 1.65p (20.0%) 5.74p
Proposed dividend per share 1.0p 1.0p - 3.2p
* Stated before exceptional items and including the post-tax results of
associates and joint ventures.
Operational Highlights
* Airline Services: sales up 3.1% to #151.4m; operating profit before
exceptional items up 63.9% to #5.9m
- UK operations benefit from continued growth of low cost carriers
- New contract with British Airways to provide catering bond services at
Gatwick
- Australia operation back in profit
* Airport Services: sales up 4.6% to #127.5m; operating profit before
exceptional items up 8.3% to #3.9m
- Higher spend per head at UK airports offsets fewer transactions
- International revenues boosted by new retail openings in Italy and
Romania
* Strategic review ongoing
- Emphasis on leveraging scale either with existing assets or through
acquisition
- Focus on innovation: pioneering new products and services
* Ten-year #800m contract signed with Manchester Airport (see separate
announcement)
Commenting on the results, Peter Williams, Chairman & Chief Executive, said:
"Against a difficult trading backdrop and the distraction of internal events,
these are encouraging results.
"We operate in highly competitive markets and to succeed we must focus on
improving our performance through a combination of innovation and building
scale.
"The second half of the year remains a challenge but we are confident that the
full year results will subject to the current security concerns, be in line with
our expectations."
28 September 2006
Enquiries:
Alpha Airports Group Plc 020 8580 3200
Peter Williams, Chairman & Chief Executive www.alpha-group.com
Tim Redburn, Finance Director
College Hill 020 7457 2020
Kate Pope/Mark Garraway
Chairman's Statement
Group Results
Overall revenue for the six months ended 31 July 2006 increased by 3.8% to
#278.9m (2005/06: #268.8m) with small increases in all of the Group's business
and geographic segments.
As expected, the Group's trading performance showed a significant improvement in
the period with profit before tax and exceptional items increasing by 33.9% to
#8.3m (2005/06: #6.2m).
Exceptional costs of #4.1m (2005/06: nil) in the first six months were mainly
related to the events earlier this year, that led to the share suspension and
subsequent investigation (#2.7m), and redundancies (#1.1m) that took place as
part of a restructuring of Airport Services early in the period.
Net interest costs increased to #1.8m (2005/06: #1.3m) reflecting higher
borrowings during the period as compared with the first six months of the
previous financial year as a result of capital expenditure and additional
payments to the Group's pension scheme.
The UK tax charge in the first half has been reduced by #1.5m in respect of
recoveries of overpaid tax in prior years. The tax charge in the second half of
the financial year is expected to be similar to last year at around 27%.
Basic earnings per share, before exceptional items, were 2.98p (2005/06: 1.65p).
Net Debt and Cash Flow
Net debt at 31 July 2006 was #38.7m compared to #37.1m at 31 January 2006.
During the period, capital expenditure amounted to #10.7m against depreciation
of #6.2m. Major investment projects included completion of the Airport Services
management information system.
Other significant cash movements included the pension payment (#3.8m) referred
to below.
Dividend and Dividend Policy
The Board has approved an interim dividend of 1.0p (2005/06: 1.0p) to be paid on
30 November 2006 to shareholders on the register at the close of business on 3
November 2006.
The Board has reviewed its future dividend policy. Whilst it is intended to
retain flexibility regarding future events, the Board recognises the need to
balance dividend payments with medium-term free cash flow generation and to
maintain a level of dividend cover consistent with a progressive dividend
policy. It is therefore the Board's intention that the Group will maintain a
dividend cover of not less than 2 times pre-exceptional earnings; this policy
will apply from, and including, the year ending 31 January 2007.
Pensions
As previously reported, Alpha and the Trustees of the Alpha Airports Group
Pension and Life Assurance Plan (the "Scheme") agreed that the final salary
scheme would change to a career average scheme with effect from 6 April 2006.
These changes have been made to help address the deficit on the Scheme. The
Group also increased its ongoing contributions by 0.9% to 11.3% of pensionable
salaries, made a payment of #3.8m and has agreed to make further payments of
#3.0m per annum to fund the past service deficit. The cash cost in the current
financial year will be approximately #6.0m.
During the period the Group recognised an actuarial gain on the Scheme of #4.0m
before tax in the statement of recognised income and expense.
Operating Review
Airline Services
Alpha Airline Services provides catering logistics, inflight catering, bonded
stores, inflight retail and management services to airlines in both the UK and
Overseas.
Total sales increased by 3.1% to #151.4m (2005/06; 146.9m) during the period.
Operating profit for the six months, before exceptional items of #0.5m,
increased by 63.9% to #5.9m (2005/06: #3.6m).
While UK sales were marginally down, a reduction in overall catering revenue was
offset by strong growth from inflight retail.
Start up costs incurred in the prior year associated with the American Airlines
contract at Heathrow and Gatwick did not recur and the benefits of a cost
reduction plan, together with a new contract in Edinburgh for Delta Airlines,
benefited the bottom line in UK catering.
With the continued growth in the low cost carrier market we continued to see
more demand for our inflight retail, bonded store and logistics services which
made an improved contribution to profits.
We are pleased to announce that, since the period end, we have entered into a
new contract with British Airways to provide all of their catering bond services
at Gatwick.
Overall, in the UK there was a marked improvement in profitability but stiff
competition means that these operations will continue to operate on low margins.
Internationally, we saw improvements in Australia, with increased revenues as a
result of the Malaysian Airlines contract, and the operation returning to profit
after a number of difficult years. In Jordan our excellent business continued
to perform well, despite the political issues in the region, and converted
increased revenue into profit. Our recent acquisition in Romania doubled both
profits and revenue in that country. In the last few months we have retained
contracts in Amsterdam for Cathay Pacific and Japan Airlines.
Airport Services
Alpha Airport Services operates retail stores and catering outlets at airports
in the UK and around the world.
Total sales increased by 4.6% to #127.5m (2005/06: #121.9m) during the period.
Operating profit for the six months, before exceptional items of #0.8m,
increased by 8.3% to #3.9m (2005/06: #3.6m).
In the UK, revenue was slightly ahead, including improved contributions from
refitted World News stores at Heathrow terminal 3 and Aberdeen. Although
passenger numbers at the airports that we serve were up 4.7%, the number of
transactions was down. The average transaction value also, coincidentally,
increased by 4.7%. As a consequence UK profits remained static when compared
with the first half of the previous financial year.
International revenue increased by 4.3% with the main growth coming from the
retail outlets that were opened last year in Italy at Rome Fiumicino and
Ciampino. During the period we opened a new World News Cafe at Henri Coanda
airport, Bucharest and we completed the refurbishment of our tax and duty free
stores at Orlando International Airport in the USA.
Overseas retail profits increased by 8.0% over the same period in the last
financial year. Our Sri Lanka business, which opened a new bar in the departures
area at Colombo airport, continued to be the main profit contributor overseas.
Manchester Airport Contract Extension
We are delighted to have announced today a ten-year extension to our ongoing
contract with Manchester Airport (see separate announcement). The contract is
expected to realise turnover in excess of #800 million over the ten years and
involves the delivery of retail services in all three of Manchester's terminals.
Strategic Review
Following my appointment in May, I initiated a review of the Group's strategy.
Whilst, as for any group, this is an ongoing process, a number of key issues
have already become apparent.
There is no doubt that Alpha has world-class examples of tax and duty free
stores and capabilities in the provision of catering on aircraft. What is
essential, though, is that we concentrate on ensuring that we maximise returns
on those markets where we have scale or can achieve scale either with existing
facilities or through acquisition.
In the more developed markets in which we operate, there is intense competition
for new contracts in both airline and airport services. For example, in places
such as the UK, returns are not as good as those, for instance, in emerging
economies. However, as an international business with international customers,
it is imperative that we have a well established domestic business which then
qualifies us for the new business opportunities that exist in emerging markets.
Consequently, we will continue to operate only in those countries where we have
scale or believe we can achieve scale. In all markets, we will review each
contract and each retail outlet to ensure that we have the correct focus and
return on capital employed.
Another key issue for our longer-term strategy is innovation. Alpha, has since
its inception been a pioneer in inflight catering and duty and tax free
retailing in the UK/Europe and we must continue to exploit this strength.
More recently Alpha has pioneered the buy-on-board and the Blue Sky Services
menu concept which has been very successful with airlines such as MyTravel. In
both our markets there is a danger that the only comparison is one of price.
Whilst cost is obviously an important issue for our customers, it is important
that Alpha continues to provide innovation in its offer to differentiate itself
from its competitors.
Outlook
Security issues around the world continue to influence the Board's view of
performance in the second half of the current financial year.
It is estimated that the initial impact of the UK security issues in August
impacted that month's operating profit by approximately #0.3m. During
September, there has been a gradual return towards normality but airport
retailing continues to be affected by lower passenger spending. The recent
easing of hand baggage restrictions is welcome but it will take time to restore
confidence fully in air travel and it is too early to form views about the
longer term.
Our overseas operations, particularly in Jordan and Sri Lanka, have their own
security issues. However, Alpha has a reputation for its innovation and
flexibility which will stand it in good stead in a rapidly changing environment.
Our domestic markets remain very competitive. Some consolidation in the UK is a
possibility and Alpha will look to take advantage of any suitable opportunities
that might arise There are also a number of potential international
opportunities which would enable us to leverage Alpha's management skills and
industry knowledge.
The second half of the year remains a challenge but we are confident that the
full-year results will subject to the current security concerns, be in line with
our expectations.
Group Income Statement
for the six months ended 31 July 2006, 31 July 2005
and for the year ended 31 January 2006
Six months ended 31 July 2006 Unaudited Audited
(unaudited) Six months Year
Before Exceptional ended Ended
Exceptional Items 31 July 31 January
Items (Note 3) Total 2005 2006*
Notes #m #m #m #m #m
Continuing operations
Revenue 2 278.9 - 278.9 268.8 550.9
Cost of sales (180.5) - (180.5) (176.4) (359.8)
Gross profit 98.4 - 98.4 92.4 191.1
Administrative expenses (88.6) (4.1) (92.7) (85.2) (170.6)
Operating profit 2 9.8 (4.1) 5.7 7.2 20.5
Interest payable and similar
charges (2.0) - (2.0) (1.6) (3.2)
Interest receivable 0.2 - 0.2 0.3 0.4
Share of post-tax profits of
associate and joint ventures 0.3 - 0.3 0.3 0.7
Profit before taxation 8.3 (4.1) 4.2 6.2 18.4
UK taxation credit/(charge) 4 1.6 1.2 2.8 (0.5) (1.7)
Overseas taxation charge (2.9) - (2.9) (1.2) (2.9)
Taxation (charge)/credit (1.3) 1.2 (0.1) (1.7) (4.6)
Profit for the period 7.0 (2.9) 4.1 4.5 13.8
Attributable to:
Equity shareholders 2.3 2.9 10.0
Minority interests 1.8 1.6 3.8
Profit for the period 4.1 4.5 13.8
Dividends
A dividend of 1.0p per share (2005/06: 1.0p per share) amounting to #1.7m (2005/06: #1.7m) has been proposed
for the interim period ending 31 July 2006 but remains unpaid at the period end. The final dividend in respect of
last year of 3.2p per share (2004/05: 3.0p per share) amounting to #5.6m will be paid on 6 October 2006 to
shareholders who were on the register of members on 8 September 2006.
Earnings per share from continuing operations (Note 5)
- Basic 1.32p 1.65p 5.74p
- Diluted 1.31p 1.62p 5.66p
* Exceptional items in relation to the year ended 31 January 2006 are disclosed in
note 3.
Group Statement of Recognised Income and Expense
for the six months ended 31 July 2006, 31 July 2005
and for the year ended 31 January 2006
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 July 31 July 31 January
2006 2005 2006
#m #m #m
Profit for the period 4.1 4.5 13.8
Currency translation differences on foreign currency
net assets (0.6) 1.1 0.3
Actuarial gains/(losses) on defined benefit pension
schemes 4.0 (6.5) (6.3)
Deferred tax on pension schemes (1.2) 1.9 1.9
Net profit/(losses) not recognised in income statement 2.2 (3.5) (4.1)
Total recognised income 6.3 1.0 9.7
Attributable to:
Equity shareholders 4.3 (0.6) 5.9
Minority interests 2.0 1.6 3.8
6.3 1.0 9.7
Group Balance Sheet
at 31 July 2006, 31 July 2005, 31 January 2006
Unaudited Unaudited Audited
31 July 31 July 31 Jan
2006 2005 2006
Notes #m #m #m
Assets
Non-current assets
Goodwill 16.4 16.4 16.4
Intangible assets 8.4 4.5 7.3
Property, plant and equipment 65.1 59.9 62.1
Investments accounted for using equity method 6.8 6.6 6.9
Other debtors 2.4 2.3 2.6
Deferred taxation 9.3 10.7 10.6
108.4 100.4 105.9
Current assets
Inventories 41.2 39.6 35.9
Trade and other receivables 51.5 55.2 45.0
Cash and cash equivalents 6 26.4 10.9 16.0
Current taxation 1.1 - -
120.2 105.7 96.9
Liabilities
Current liabilities
Financial liabilities - bank and other borrowings 6 (65.0) (33.9) (52.8)
Trade and other payables (84.0) (94.6) (68.2)
Current tax liabilities (2.6) (2.6) (1.3)
Provisions for liabilities and charges (3.3) (0.3) (3.2)
(154.9) (131.4) (125.5)
Net current liabilities (34.7) (25.7) (28.6)
Non-current liabilities
Financial liabilities - bank and other borrowings 6 (0.1) (0.5) (0.3)
Other non-current liabilities (0.6) (0.5) (0.6)
Deferred taxation (2.1) (0.5) (1.9)
Retirement benefit obligations (23.1) (35.5) (30.4)
Provisions for liabilities and charges (0.4) (0.3) (0.4)
(26.3) (37.3) (33.6)
Net assets 47.4 37.4 43.7
Shareholders' equity
Ordinary shares 7 17.4 17.4 17.4
Share premium 7 43.9 43.9 43.9
Capital redemption reserve 7 0.4 0.4 0.4
Other reserves 7 (1.4) 0.2 (0.6)
Accumulated losses 7 (16.6) (27.4) (21.8)
Total shareholders' equity 43.7 34.5 39.3
Minority interests 7 3.7 2.9 4.4
Total equity 47.4 37.4 43.7
Group Cash Flow Statement
for the six months ended 31 July 2006, 31 July 2005 and for the year ended 31 January 2006
Unaudited Unaudited Audited
Six months Six months Year
ended Ended ended
31 July 31 July 31 Jan
2006 2005 2006
Notes #m #m #m
Cash flows from operating activities
Cash generated from operations 8 12.4 18.3 23.8
Interest received 0.2 0.3 0.4
Interest paid (1.5) (1.3) (2.7)
Tax received / (paid) 0.4 (1.3) (4.3)
Net cash generated from operating activities 11.5 16.0 17.2
Cash flows from investing activities
Acquisition of businesses - (3.9) (3.9)
Cash acquired on purchase of business - 0.3 0.3
Expenditure on intangible assets (software) (1.5) (1.9) (5.2)
Purchase of property, plant and equipment (9.2) (7.3) (16.1)
Dividends received from associate 0.4 0.2 0.2
Dividends received from joint ventures - - 0.1
Net cash used in investing activities (10.3) (12.6) (24.6)
Cash flows from financing activities
Net proceeds from issue of ordinary share capital - 0.2 0.2
Repayment of finance leases (0.3) (0.3) (0.5)
Repayment of long term #60m facility - (39.9) (39.9)
Loans from #100m facility - 39.9 39.9
Increase in loans 13.4 8.8 25.7
Dividends paid to shareholders - (5.2) (7.0)
Dividends paid to minority interests (2.7) (1.3) (2.0)
Net cash used in financing activities 10.4 2.2 16.4
Effects of exchange rate changes (0.1) (0.1) (0.4)
Net increase in cash and cash equivalents 11.5 5.5 8.6
Cash and cash equivalents at opening period 13.4 4.8 4.8
Total cash and cash equivalents at closing period 24.9 10.3 13.4
Notes to the Financial Information
1 Accounting policies
(1) Basis of preparation
This financial information comprises the consolidated interim balance sheets as
at 31 July 2006 and 31 July 2005 and related consolidated interim statements of
income and cashflows and related notes for the six months periods then ended of
Alpha Airports Group Plc (herein referred to as the 'financial information').
The interim consolidated financial information for the six months to 31 July
2006 is set out on pages 5 to 14. It has been prepared in accordance with the
Listing Rules of the Financial Services Authority. In preparing this financial
information, management has used the principal accounting policies as set out on
pages 35 to 40 of the Group's annual financial statements for the year ended 31
January 2006, which have been consistently applied in the six months ended 31
July 2006.
The figures for the six months to 31 July 2006 and 31 July 2005 are unaudited
and do not constitute statutory accounts. However, the auditors have carried out
a review of the figures to 31 July 2006 and their report is set out in the
Independent review report.
A copy of the statutory accounts for the year ended 31 January 2006, prepared in
accordance with IFRS as detailed in the preceding annualaccounts, has been
delivered to the Registrar of Companies and contained an unqualified auditors'
report in accordance with section 235 of the Companies Act 1985.
The Group has chosen not to adopt IAS 34 'Interim Financial Statements', in
preparing its interim statements for the six months ended 31 July 2006 and
therefore, this interim statement is not in compliance with international
financial reporting standards.
(2) Balance Sheet as at 31 January 2006
The Group Balance Sheet as at 31 January 2006, as previously published, reported
deferred taxation assets of #8.5m under non-current assets and #2.1m under
current assets. In order to comply with latest accounting standards, the
deferred taxation asset under current assets has been reclassified under non-
current assets. Therefore, the comparative balance sheet, as at 31 January 2006,
now reports a non-current deferred taxation asset of #10.6m.
(3) Going Concern Basis
The Group's accounts have been prepared on the basis that the Group is a going
concern. After making enquiries, the directors have a reasonable expectation
that the Group has adequate resources to continue in operational existence for
the foreseeable future. For this reason, they continue to adopt the going
concern basis in preparing the financial statements.
2 Segment reporting
2 (i) Business segments
Airline Services Airport Services Unallocated Group
Six Six Six Six Six Six Six Six
months months Year months months Year months months Year months months Year
ended Ended ended ended ended ended ended ended ended ended ended ended
31 31 31 31 31 31 31 31 31 31 31 31
July July January July July January July July January July July January
2006 2005 2006 2006 2005 2006 2006 2005 2006 2006 2005 2006
#m #m #m #m #m #m #m #m #m #m #m #m
Profit for the
period
Continuing and
acquired operations
Revenue 151.4 146.9 298.5 127.5 121.9 252.4 - - - 278.9 268.8 550.9
Profit before
exceptional items 5.9 3.6 10.1 3.9 3.6 10.5 - - - 9.8 7.2 20.6
Exceptional items
- cost of sales - - 0.1 - - 0.2 - - - - - 0.3
Exceptional items
- admin expenses (0.5) - (1.0) (0.9) - 0.6 (2.7) - - (4.1) - (0.4)
Operating profit 5.4 3.6 9.2 3.0 3.6 11.3 (2.7) - - 5.7 7.2 20.5
Interest payable
and similar charges - - - - - - (2.0) (1.6) (3.2) (2.0) (1.6) (3.2)
Interest receivable - - - - - - 0.2 0.3 0.4 0.2 0.3 0.4
Share of post-tax
profits of associate
and joint ventures 0.3 0.3 0.7 - - - - - - 0.3 0.3 0.7
Profit before
taxation 5.7 3.9 9.9 3.0 3.6 11.3 (4.5) (1.3) (2.8) 4.2 6.2 18.4
Taxation charge
on ordinary
activities - - - - - - (0.1) (1.7) (4.6) (0.1) (1.7) (4.6)
Profit for the
period 5.7 3.9 9.9 3.0 3.6 11.3 (4.6) (3.0) (7.4) 4.1 4.5 13.8
2 (ii) Geographical segments
UK & Ireland International Unallocated Group
Six Six Year Six Six Year Six Six Year Six Six Year
months months Ended months months ended months months ended months months ended
Ended Ended 31 ended 31 ended 31 ended ended 31 ended Ended 31
31 31 January July 31 January 31 31 January 31 31 January
July July 2006 2006 July 2006 July July 2006 July July 2006
2006 2005 2005 2006 2005 2006 2005
#m #m #m #m #m #m #m #m #m #m #m #m
Profit for the period
Continuing operations
Revenue 226.1 223.2 449.7 52.8 45.6 101.2 - - - 278.9 268.8 550.9
Profit before 3.3 2.6 8.8 6.5 4.6 11.8 - - - 9.8 7.2 20.6
exceptional items
Exceptional items - cost - - 0.3 - - - - - - - - 0.3
of sales
Exceptional items - (1.4) - (0.4) - - - (2.7) - - (4.1) - (0.4)
admin expenses
Operating profit 1.9 2.6 8.7 6.5 4.6 11.8 (2.7) - - 5.7 7.2 20.5
Interest payable and - - - - - - (2.0) (1.6) (3.2) (2.0) (1.6) (3.2)
similar charges
Interest receivable - - - - - - 0.2 0.3 0.4 0.2 0.3 0.4
Share of post-tax
profits of associate
and joint ventures - - - 0.3 0.3 0.7 - - - 0.3 0.3 0.7
Profit before taxation 1.9 2.6 8.7 6.8 4.9 12.5 (4.5) (1.3) (2.8) 4.2 6.2 18.4
Taxation charge on - - - - - - (0.1) (1.7) (4.6) (0.1) (1.7) (4.6)
ordinary activities
Profit for the period 1.9 2.6 8.7 6.8 4.9 12.5 (4.6) (3.0) (7.4) 4.1 4.5 13.8
There are no material sales between the business segments.
Unallocated items comprise interest (payable)/receivable, thus recognising the centre's role
and responsibility in allocating financial resources, taxation charges, and the exceptional
charges in respect of the special committee investigation which were conducted on behalf of
the Group.
3 Exceptional items
Profit before tax includes net exceptional items of #4.1m for the six months ended 31
July 2006, #nil for the six months ended 31 July 2005 and #0.1m for the year ended 31
January 2006 as follows:
Six months ended 31 July Year ended 31 January
2006 2006
Cost Administrative Cost Administrative
of Sales Expenses Total of Sales Expenses Total
Notes #m #m #m #m #m #m
Special committee investigation 3.1 - (2.7) (2.7) - - -
UK Airport Services redundancies 3.2 - (0.9) (0.9) (0.2) - (0.2)
UK Airline Services redundancies 3.2 - - - (1.2) (0.7) (1.9)
VAT advisor fraud 3.3 - (0.5) (0.5) - (2.5) (2.5)
Gain on transfer to Career Average 3.4 - - - 1.7 2.8 4.5
Pension Scheme
- (4.1) (4.1) 0.3 (0.4) (0.1)
3.1 As a result of the temporary suspension of the Company's shares on the stock exchange
from 25 April to 6 July 2006, the Group underwent a special committee investigation
which completed its work during the first half of the year. Exceptional costs of #2.7m
were incurred as a result. A current tax amount at the UK standard rate of tax has been
credited to the income statement in respect of this charge.
3.2 Redundancy charges of #1.1m were incurred in the UK during the half year ending 31 July
2006, arising from the loss of several positions in Airport and Airline Services.
3.3 During the year ended 31 January 2006 the Group provided #2.5m for the cost of a fraud
carried out by a third party UK based European VAT advisor. A further provision of #0.5m
was made during the half year ended 31 July 2006 in respect of professional fees and
other costs of dealing with European VAT authorities in connection with the fraud.
3.4 During the year ended 31 January 2006, as a result of the actuarial valuation on 6 April
2005, the Alpha Airports Group Pension and Life Assurance Plan changed from a final
salary pension scheme to a career average based pension scheme with effect from 6 April
2006. The effect of this change was to reduce the deficit by #4.5m and this change in
past service cost was reflected through the Group income statement. Due to the size and
nature of this change in past service cost, the amount was shown as an exceptional item
and a deferred tax amount at the UK standard rate of tax was charged through the Group
income statement.
4 Taxation
During the half year ended 31 July 2006 the Group reached agreement with the UK tax
authorities regarding the treatment of certain items in its tax computations for earlier
years. As a result the Group recognised a credit to the tax charge in the income
statement of #2.1m of which #1.3m had been received by 31 July 2006. As a result of the
agreement the Group also recognised a charge of #0.6m to deferred tax.
In addition, the Group has taken a deferred taxation credit at the standard rate of UK
taxation on the exceptional items reported in Note 3, resulting in an exceptional tax
credit of #1.2m.
The overseas tax rate has increased due to tax losses considered unrecoverable,
increasing the tax charge by #0.5m, and higher levels of earnings remitted from overseas
operations giving rise to additional tax on receipt in the UK of #0.6m.
Overall, the tax charge for the half year ended 31 July 2006 was #0.1m, an effective
rate of 2%. The effective rate for the Group will revert to nearer 25% to 30% in the
second half.
5 Earnings per share
(a) Basic and diluted earnings per share in respect of continuing operations
Basic earnings per share is calculated by dividing the earnings attributable to ordinary
shareholders by the weighted average number of ordinary shares outstanding during the year.
For diluted earnings per share, the weighted average number of ordinary shares in issue is
adjusted to assume conversion of all dilutive potential ordinary shares. In respect of the
diluted earnings per share, the Average share price includes the period when the shares were
suspended, as reported in Note 3.
Reconciliations of the earnings and weighted average number of shares used in the
calculations are as follows:
Profit for the period Weighted average no. of Earnings per share
shares
Six Six Year Six Six Year Six Six Year
months months ended 31 months months ended 31 months months ended
ended Ended January ended ended 31 January ended 31 ended 31 31
31 July 31 July 2006 31 July July 2006 July July January
2006 2005 2006 2005 2006 2005 2006
#m #m #m millions millions millions Pence Pence Pence
Basic EPS 2.3 2.9 10.0 174.4 174.1 174.3 1.32 1.65 5.74
Effect to reflect - - - 0.7 3.4 2.3 (0.01) (0.03) (0.08)
dilutive ordinary
shares under
options
Diluted EPS 2.3 2.9 10.0 175.1 177.5 176.6 1.31 1.62 5.66
(b) Underlying earnings per share
Underlying profit for the financial year and underlying earnings per share have been
calculated to exclude the effect of exceptional items in order that the effects of
these items on reported earnings can be fully appreciated.
Reconciliations of the underlying profit for the financial year and underlying earnings
per share are as follows:
Profit for the period Earnings per share
Six Six Year Six Six Year ended
months months ended 31 months months 31 January
ended ended January ended 31 ended 2006
31 July 31 July 2006 July 2006 31 July
2006 2005 2005
#m #m #m Pence Pence Pence
Basic EPS 2.3 2.9 10.0 1.32 1.65 5.74
Adjustments for:
- exceptional items 4.1 - 0.1 2.35 - 0.06
(Note 3)
- taxation relating to (1.2) - - (0.69) - -
these items
Underlying EPS 5.2 2.9 10.1 2.98 1.65 5.80
6 Net debt
31 July 31 July 31 January
2006 2005 2006
#m #m #m
Cash and cash 26.4 10.9 16.0
equivalents
Bank loans due within one year - (63.2) (32.9) (49.8)
unsecured
Bank overdrafts due within one year - (1.5) (0.6) (2.6)
unsecured
Finance lease obligations within one year (0.3) (0.4) (0.4)
Finance lease obligations over (0.1) (0.5) (0.3)
one year
(38.7) (23.5) (37.1)
7 Shareholders' funds and statement of changes in shareholders' equity
Share Share Capital Other Accumulated Minority Total
capital Premium redemption reserves losses Total interests equity
reserve
#m #m #m #m #m #m #m #m
At 31 January 2006 17.4 43.9 0.4 (0.6) (21.8) 39.3 4.4 43.7
Share options
- value of - - - - 0.1 0.1 - 0.1
employee services
Exchange - - - (0.8) - (0.8) 0.2 (0.6)
adjustments
Profit for the - - - - 2.3 2.3 1.8 4.1
half year
Actuarial gains on - - - - 4.0 4.0 - 4.0
defined benefit
pension scheme
Deferred tax on - - - - (1.2) (1.2) - (1.2)
pension schemes
Dividends - - - - - - (2.7) (2.7)
At 31 July 2006 17.4 43.9 0.4 (1.4) (16.6) 43.7 3.7 47.4
8 Net cash from operating Six Six
activities months months Year
ended ended Ended
31 31 31
July July January
2006 2005 2006
#m #m #m
Profit before tax 4.2 6.2 18.4
Share of post-tax profit of - (0.2) (0.4)
joint ventures
Share of post-tax profit of (0.3) (0.1) (0.3)
associate
Interest payable and similar 2.0 1.6 3.2
charges
Interest receivable (0.2) (0.3) (0.4)
Depreciation and 6.2 5.4 11.9
amortisation
Increase in exceptional provisions 0.1 - 1.7
Decrease in retirement benefit provisions credited to income (3.5) - (4.5)
statement
Share options 0.1 0.1 0.2
Changes in working capital (excluding effects of acquisitions and
disposals of subsidiaries)
Increase in (5.7) (6.7) (3.2)
inventories
Increase in trade and other (6.7) (18.7) (9.0)
receivables
Increase in creditors 16.2 31.0 6.1
Increase in - - 0.1
provisions
Cash generated from 12.4 18.3 23.8
operations
9 Adjusted figures
The Group uses adjusted figures as key underlying performance measures.
Adjusted figures are stated before exceptional items, but including share
of post-tax profits of associate and joint ventures.
Six months Six months Year
ended ended ended
31 July 31 July 31 January
2006 2005 2006
#m #m #m
Operating profit 5.7 7.2 20.5
Adjustments:
Share of profit from associate/ 0.3 0.3 0.7
joint ventures
Exceptional items (Note 3) 4.1 - 0.1
Adjusted operating profit 10.1 7.5 21.3
Profit before tax 4.2 6.2 18.4
Adjustments:
Exceptional items (Note 3) 4.1 - 0.1
Adjusted profit before tax 8.3 6.2 18.5
Profit attributable to equity 2.3 2.9 10.0
shareholders
Adjustments:
Exceptional items (Note 3) 4.1 - 0.1
Taxation on these items (1.2) - -
Adjusted attributable profit 5.2 2.9 10.1
10 Approval of Group Interim Financial Information
The Group interim financial information was approved by the Board of
Directors on 27 September 2006.
This preliminary announcement contains certain forward looking statements based on
current assumptions and forecasts made by the management of Alpha Airports Group Plc.
These statements are subject to risks and uncertainties because they relate to events
that may or will occur in the future and could cause actual results to differ
materially from those expressed. Many of these risks and uncertainties relate to
factors that are beyond Alpha's ability to control or estimate precisely, such as
future market and economic conditions, the actions of competitors, operational problems
and the actions of government regulators. Alpha undertakes no obligation to update
forward-looking statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR KDLFLQKBBBBZ
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