Gatwick Funding Limited Half Year Announcement (5761I)

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RNS Number : 5761I

Gatwick Funding Limited

13 August 2021

Gatwick Funding Limited

13 August 2021

Issuer: Gatwick Funding Limited

Date: 13 August 2021

Gatwick Funding Limited (the "Issuer")

a company incorporated in Jersey (registered number 107376)

Half year results publication - Gatwick Airport

The Issuer's parent, Ivy Holdco Limited, today published its report and unaudited condensed interim consolidated financial statements for the six months ended 30 June 2021.

The Ivy Holdco Limited report and unaudited condensed interim financial statements consolidate the results of Ivy Holdco Limited, the Issuer, Ivy Bidco Limited and Gatwick Airport Limited. These financial statements and a related investor presentation are available on the Gatwick Airport Limited website at www.gatwickairport.com/investor .

UK aviation travel in danger of continuing to substantially lag behind Europe and US if UK Government does not build on its world class vaccination programme

-- Government must act to simplify travel requirements to improve passenger confidence in international travel and not squander the benefits of its world leading vaccination programme

-- Passenger numbers for Gatwick in first six months hit very low levels due to global impact of COVID-19 and associated international travel bans.

-- The business has a strong liquidity position and is well placed for recovery due to successful refinancing alongside reduced capital expenditure and operating costs.

-- Focus remains on safety and wellbeing of passengers travelling and staff as well as operational readiness.

With over 75% of UK adults double vaccinated the UK Government needs to take advantage of its world leading vaccination programme to improve passenger confidence in international travel by substantially simplifying its current travel requirement rules. The UK is in danger of continuing to lag behind Europe and the US whose much simpler travel rules are enabling passengers to travel more freely and enjoy much needed breaks and reunions with family and friends. The UK aviation recovery is far behind countries in Europe such as France and Germany whose travel bookings are on average over 50 per cent of pre-pandemic levels whereas the in the UK it is sitting at approximately 16 per cent.

To simplify current travel rules and remove the prohibitive cost of COVID-19 testing for many passengers Gatwick is calling on Government to:

   --    Have no test requirements for travellers from "green" countries, 

-- Have no test requirements for double vaccinated travellers from "amber" and a single lateral flow test for those non-vaccinated from an "amber" country.

Gatwick passenger numbers were very low at just 569k in the first six months ended 30 June 2021 due to the impact of COVID-19 and the associated international travel bans. While the airport remained open throughout this period all revenue streams were impacted and the collapse in passenger demand along with Government restrictions led to a GBP244.6m loss for the six-month period and negative EBITDA at -GBP50.2m.

A strategic and sustained reduction in capital expenditure resulted in the deferral or cancellation of over GBP570m from investment originally planned in 2020, 2021 and 2022. Swift and decisive actions taken in 2020 reduced operating costs by 34.4% in the first half of the year through renegotiated contracts, temporary infrastructure shutdowns, halting discretionary expenditure and the continued consolidation of operations into one passenger terminal. Staff costs are GBP31.3m lower (46.4%) in the first half of the year due to the restructuring that was completed in Q4 2020.

As of 30 June 2021 the business has a strong liquidity position with GBP779m of liquidity including GBP624m of cash which is sufficient liquidity to meet operating cashflows, planned investment levels and interest payments for at least the next 12 months. This ensures Gatwick is well placed for the recovery. Gatwick has commenced a consent solicitation process to address forecast breaches in Financial Covenants, following successful discussions with its banks and with bondholders forming a special committee of the Investment Association.

A priority continues to be protecting the health and wellbeing of employees and passengers with enhanced cleaning and mandatory face masks guidance for all Gatwick staff in passenger facing areas. The airport continues to host an NHS testing site alongside walk-in and drive-through private testing facilities also being made available.

Gatwick Airport, Chief Executive Officer, Stewart Wingate said:

"First I would like to thank all our staff for their hard work and fortitude throughout what has no doubt been the most challenging six months the airport has witnessed with its low passenger and air traffic volumes. I remain certain that Gatwick will recover and as a business we are financially and operationally well placed for that.

"In the UK we are all emerging to enjoy more freedoms due to our world class vaccination programme, however we are in danger of squandering the advantage that vaccination programme has afforded us for international travel. Our Government needs to act now and remove unnecessary and costly PCR testing requirements for passengers, particularly for those double vaccinated.

"UK travel recovery should not be allowed to lag behind the US and Europe. Passengers need the travel rules simplified so they can choose to travel more freely and enjoy much needed breaks and reunions with family and friends which are currently much more attainable for those in Europe and the US."

For further information please contact

 
                       Gatwick Airport Press 
 Media enquiries        Office                  [phone] 
                       Steve Wirths             +44 ( 0 )1293 968827 
 Investor enquiries     Lloyd Garrett            [phone] 
 

Further information on the financial results and the associated investor presentation can be found at www.gatwickairport.com/investor

About Gatwick Airport

Gatwick is the UK's second largest airport and flies a range of both short and long-haul point-to-point services. The airport is a vital piece of the UK's national infrastructure and is also a major driver for both the regional and national economies.

In 2019, a new long-term partnership was formed with VINCI Airports who purchased a 50.01% stake in the airport. VINCI Airports, the leading private airport operator in the world, manages 45 airports in 12 countries in Europe, Asia and the Americas. The company harnesses its expertise as a comprehensive integrator to develop, finance, build and operate airports, while leveraging its investment capability and expertise in optimising operational performance, modernising infrastructure and driving environmental transition. VINCI Airports became the first airport operator to start rolling out an international environmental strategy, in 2016, with a view to achieving net zero emissions throughout its network by 2050.

Global Infrastructure Partners (GIP), which manages the remaining 49.99% interest in Gatwick, is an independent infrastructure investor that makes equity investments in high quality infrastructure assets in the energy, transport and water/waste sectors. GIP has US$70 billion of Assets under Management. Its 41 portfolio companies operate in over 50 countries.

For more information on VINCI Airports please visit www.vinci-airports.com and for more information on GIP please visit http://global-infra.com

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August 13, 2021 02:28 ET (06:28 GMT)