Final Results - Part 2
29 March 2001 - 5:00PM
UK Regulatory
RNS Number:2596B
Alpha Airports Group PLC
29 March 2001
Part 2
PRELIMINARY RESULTS FOR THE YEAR ENDED 31ST JANUARY 2001
HIGHLIGHTS
29 March 2001
Group Profit and Loss Account
for the year ended 31 January 2001
2001 2000
Notes #m #m
Turnover 1
- Continuing 431.5 441.2
- Discontinued 1.5 73.9
------ --------
433.0 515.1
Cost of sales (296.5) (334.5)
------- --------
Gross profit 136.5 180.6
Administration expenses (121.3) (159.8)
------- -------
EBITDA 2 28.6 35.3
Depreciation on
tangible fixed assets (10.2) (11.6)
Amortisation of goodwill (3.2) (2.9)
Operating profit 15.2 20.8
Operating profit
- Continuing 16.3 16.1
- Discontinued (1.1) 4.7
--------- ---------
3 15.2 20.8
-------- ---------
Share of operating
loss of associates
(including goodwill (0.2) -
amortisation of
#0.2m)
(Loss)/profit on
disposal of discontinued
operations 11 (8.4) 1.7
------- --------
Profit on ordinary
activities before
interest 1 6.6 22.5
Interest receivable 0.2 0.5
Interest payable (0.9) (3.7)
------- --------
Profit on ordinary
activities before 1 5.9 19.3
taxation
Taxation on profit on
ordinary activities 4 (6.4) (8.2)
-------- -------
(Loss)/profit on
ordinary activities after taxation (0.5) 11.1
Minority interest
(equity) - (0.6)
-------- --------
(Loss)/profit for the (0.5) 10.5
financial year
Equity dividends 5 (5.8) (5.6)
------- --------
Retained
(loss)/profit for the
financial year 8 (6.3) 4.9
--------- ---------
(Loss)/earnings per 6 (0.29p) 6.07p
share
Diluted 6 (0.29p) 6.06p
(loss)/earnings per
share
IIMR headline 6 6.55p 7.70p
earnings per share
Adjusted earnings per 6 6.55p 7.64p
share
--------- ---------
Statement of total recognised gains and losses
for the year ended 31 January 2001
2001 2000
#m #m
(Loss)/profit for the
financial year (0.5) 10.5
Currency translation differences
on foreign currency net assets
and certain loans 0.3 (2.3)
--------- --------
Total recognised gains and losses for the (0.2) 8.2
year
There are no differences between the Group and Company reported results for
the current and prior year and the results for those years on an
historical cost basis.
Balance Sheet
at 31 January 2001
Group Company
2001 2000 2001 2000
Notes #m #m #m #m
Fixed assets
Intangible assets 17.7 15.8 - -
Tangible assets 60.0 57.9 - -
Investments 2.6 - 210.6 210.6
----- ------ ------- ------
80.3 73.7 210.6 210.6
Current assets
Stocks 24.6 20.6 - -
Debtors 28.0 26.2 48.2 66.3
Cash at bank and in
hand 7 4.5 10.3 6.1 30.2
-------- ------- --------- -------
57.1 57.1 54.3 96.5
------- ------- -------- -------
Creditors: amounts falling due within
one year
Bank and other 7 (7.4) (0.6) (6.0) -
borrowings
Other creditors (58.0) (60.4) (22.3) (76.8)
------- ------- -------- --------
(65.4) (61.0) (28.3) (76.8)
Net current
(liabilities)/assets (8.3) (3.9) 26.0 19.7
------- ------- -------- -------
Total assets less
current liabilities 72.0 69.8 236.6 230.3
------- -------- ------- --------
Creditors: amounts
falling due after more than one year
Other creditors (1.0) (0.4) - -
Provisions for
liabilities and charges (8.0) (8.6) - -
------ ------ ------- -------
Total net assets 1 63.0 60.8 236.6 230.3
Capital and reserves
Called up share capital 17.1 17.5 17.1 17.5
Share premium account 42.2 42.2 42.2 42.2
Capital redemption 13 0.4 - 0.4 -
reserve
Other reserves - - 152.3 152.3
Profit and loss account 3.3 0.8 24.6 18.3
-------- -------- -------- -------
Shareholders' funds 8 63.0 60.5 236.6 230.3
Minority interests (equity) - 0.3 - -
Total equity 63.0 60.8 236.6 230.3
======== ======== ======== =======
Approved by the Board of Directors
on 29 March 2001 Kevin Abbott, Chief Executive Heather McRae, Finance Director
Group Cash Flow Statement for the
year ended 31 January 2001
2001 2000
Notes #m #m
9.1 20.3 37.9
Net cash inflow from
operating activities
Returns on investments
and servicing of finance 0.2 0.5
Interest received (0.9) (4.9)
Interest paid
Interest element
of finance lease rental
payments - (0.1)
Dividends paid to
minority shareholders (0.1) (0.5)
in subsidiary undertakings
-------- --------
Net cash outflow from
returns on investments
and servicing of finance (0.8) (5.0)
========= ========
Taxation (6.7) (8.2)
--------- --------
Capital expenditure
Purchase of tangible
fixed assets (16.1) (12.8)
Sale of tangible fixed assets 3.8 1.5
--------- -------
Net cash outflow for
capital expenditure (12.3) (11.3)
-------- -------
Acquisitions and disposals
Purchase of minority
interests in subidiary
undertakings 10 (3.2) -
Purchase of associates 10 (2.8) -
Purchase of business 10 (0.2) (14.6)
Disposals of businesses 11 0.7 90.3
------- ------ -------
Netcash(outflow)/inflow
for acquisitions and disposals (5.5) 75.7
------ -------
Equity dividends paid (5.6) (2.3)
------ -------
(12.3) 86.8
------- ------
Netcash(outflow)/inflow before financing
Financing
Purchase of own shares (1.7) -
Unsecured loan less than 1 year 6.0 -
Repayment of long-term loan - (90.0)
Capital element
of finance lease payments (0.6) (0.8)
--------- -------
Net cash inflow/(outflow)
from financing 3.7 (90.8)
Decrease in cash 9.2 (6.9) (4.0)
======== ======
Notes to the Financial Information
1. Segmental analysis
Turnover Profit/(loss) Net assets/
before (liabilities)
interest
2001 2000 2001 2000 2001 2000
#m #m #m #m #m #m
(a) Business sector
analysis
Flight Services
- continuing
operations 274.7 254.1 17.0 12.8 53.5 42.4
-discontinued
operations 1.5 9.2 (1.1) - - 0.2
- share of operating
loss of associates
(including
goodwill amortisation) - - (0.2) - - -
- goodwill amortisation - - (1.4) (1.1) - -
-loss on disposal of
discontinued operations - - (8.4) (0.2) - -
------ ------ ------ ------ ---- ------
276.2 263.3 5.9 11.5 53.5 42.6
Retail Services
- continuing operations 156.8 187.1 2.5 6.2 18.3 15.5
- goodwill amortisation - - (1.8) (1.8) - -
- exceptional items
(continuing operations) - - - - (3.2) (3.3)
------ ------ ------ ------ ------- ------
156.8 187.1 0.7 4.4 15.1 12.2
Ground Services
- discontinued
operations - 64.7 - 4.7 - -
- profit on disposal
of discontinued operation - - - 1.9 - -
- 64.7 - 6.6 - -
433.0 515.1 6.6 22.5 68.6 54.8
Corporate provisions - - - - (2.2) (2.6)
------ ------ ------ ----- ------- ------
433.0 515.1 6.6 22.5 66.4 52.2
Net interest payable - - (0.7) (3.2) - -
Net (borrowings)/cash - - - - (3.4) 8.6
Turnover,profit on
ordinary activities
before taxation
and net assets 433.0 515.1 5.9 19.3 63.0 60.8
===== ====== ===== ==== ======= =====
In-flight Retail previously reported separately is now included in Flight
Services to reflect the new operational structure. The prior year figures have
been restated to show the segments on a comparable basis.
Net interest payable has not been allocated recognising the centre's role and
responsibility in allocating financial resources.
Notes to the Financial Information
continued
1. Segmental analysis (continued)
Turnover Profit/ (loss) Net
before assets/(liabilities)
interest
2001 2000 2001 2000 2001 2000
#m #m #m #m #m #m
(b) Geographical analysis
United Kingdom
-continuing
operations 356.5 373.3 12.1 13.5 52.5 42.3
-goodwill
amortisation - - (1.3) (1.1) - -
------ ----- ------- ------ ---- -------
356.5 373.3 10.8 12.4 52.5 42.3
------ ------ ------ ------- ----- -------
Rest of the World
-continuing
operations 75.0 67.9 7.4 5.5 19.3 15.6
-discontinued
operations 1.5 73.9 (1.1) 4.7 - 0.2
-goodwill
amortisation - - (1.9) (1.8) - -
-share of operating
loss of associates - - (0.2) - - -
(including goodwill
amortisation)
-exceptional items
(continuing operations) - - - - (3.2) (3.3)
-(loss)/profit on disposal
of discontinued
operations - - (8.4) 1.7 - -
----- ------ ------ ------- ------ ------
76.5 141.8 (4.2) 10.1 16.1 12.5
------ ------ ------ ------ ------ -------
433.0 515.1 6.6 22.5 68.6 54.8
Corporate
provisions - - - (2.2) - (2.6)
433.0 515.1 6.6 22.5 66.4 52.2
Net interest payable - - (0.7) (3.2) - -
Net (borrowings)/
cash - - - - (3.4) 8.6
----- ------ ------ ----- ------ -------
Turnover, profit on
ordinary activities
before taxation and net
assets 433.0 515.1 5.9 19.3 63.0 60.8
====== ======= ======= ====== ====== =======
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.
Notes to the Financial Information
continued
2. Accounting policies
The accounting policies are the same as those set out in the financial
statements of the Group for the year ended 31 January 2000.
The directors consider that EBITDA (earnings before interest, taxation,
depreciation and amortisation) is a standard measure used widely by analysts,
investors and other interested parties in the industry. Accordingly, the
profit and loss account has been amended to provide this information.
3. Operating profit is analysed between continuing and discontinued operations
as follows:
Continuing Discontinued Continuing Discontinued
operations operations Total operations operations Total
2001 2001 2001 2000 2000 2000
#m #m #m #m #m #m
Turnover 431.5 1.5 433.0 441.2 73.9 515.1
Cost of sales (294.5) (2.0) (296.5) (282.9) (51.6) (334.5)
------- ------ ------- -------- ------- -------
Gross Profit 137.0 (0.5) 136.5 158.3 22.3 180.6
(120.7) (0.6) (121.3) (142.2) (17.6) (159.8)
Administration
expenses
EBITDA 29.7 1.1 28.6 28.6 6.7 35.3
Depreciation
on fixed tangible
assets (10.2) - (10.2) (9.6) (2.0) (11.6)
Amortisation of
goodwill (3.2) - (3.2) (2.9) - -
------- ------ ------ ------ ------ ------
Operating
profit/(loss) 16.3 (1.1) 15.2 16.1 4.7 20.8
4. Taxation
2001 2000
#m #m
United Kingdom corporation tax 7.1 5.9
at 30 % (1999/00 - 30.2%)
Double tax relief (3.2) 1.8)
Prior year adjustments (0.4) (0.1)
Overseas taxation 3.0 2.7
Movement in deferred tax (0.1) 1.5
----- ------
6.4 8.2
----- ------
Taxation as a percentage of profit before
taxation 108% 42%
Taxation as a percentage of profit before
taxation, exceptional items and goodwill
amortisation 36% 33%
The movement in deferred tax of #1.5m in the year ending 31 January 2000 arose
from the disposal of DynAir.
Compared to 1999/00, taxation at 108% of profit before tax is unusually high
principally due to a goodwill write-off of #9.0m on the disposal of
discontinued businesses.
Notes to the Financial Information continued
5. Equity dividends
2001 2000
#m #m
Interim dividend of 1.0p per ordinary share
(1999/00 -1.0p) 1.7 1.7
Proposed final dividend of 4.1 3.9
2.4p per ordinary share
(1999/00 - 2.2p)
Total dividend of 3.4p per 5.8 5.6
ordinary share (1999/00 -
3.2p)
6. Earnings per share
(Loss)/profit for the year (Loss)/earnings per share
2001 2000 2001 2000
#m #m Pence Pence
Loss/profit
for the financial
year and (loss)
/earnings per
share (0.5) 10.5 (0.29) 6.07
Adustment
for loss/(profit)
on disposal of
discontinued
operations 8.4 (1.7) 4.87 (0.98)
Adjustment
for loss
on sale of
fixed assets - 0.1 - 0.06
Adjustment
for goodwill
amortisation 3.4 2.9 1.97 1.68
Taxation
relating to
these items - 1.5 - 0.87
------ ------- ------- --------
Adjusted
profit and IIMR
headline earnings
per share 11.3 13.3 6.55 7.70
Adjustment for
loss on sale
of fixed assets - (0.1) - (0.06)
------ ------- ------- -------
Adjusted
profit and
adjusted
earnings per
share 11.3 13.2 6.55 7.64
====== ====== ======= ========
The weighted average number of shares in issue during the year was
172,491,309(1999/00:172,889,466).Earnings per share are calculated by dividing
the profit for the financial year by the weighted average number of shares
in issue during the year. An additional measure of earnings per share has been
recommended by theInstitute ofInvestment Management and Research (IIMR). The
IIMRheadline earnings require the adjustment of earnings to eliminate certain
items, adjusted for any tax effect.
Finally, the IIMR headline earnings per share is adjusted to arrive at an
adjusted earnings per shar by eliminating the effect of exception alite ms
and profits and losses on sale of fixed assets, adjusted for any tax effect.
Diluted loss per share of 0.29 p (1999/00:earnings per share of 6.06p) has
been calculated by reference to the loss for the financial year of #0.5m
(1999/00: profit of #10.5m) and the weighted average number of shares in issue
during the year of 172,491,309 (1999/00:172,889,466), as adjusted for
potentially dilutive ordinary shares of 208,976 (1999/00: 281,535).
Notes to the
Financial Information continued
7. Net cash/(borrowings)
2001 2000
#m #m
7.1 Bank and other borrowings
Unsecured loans (6.0) -
Bank overdrafts (1.4) (0.6)
------ -------
Total bank and other borrowings (7.4) (0.6)
------ -------
7.2 Repayment analysis
Repayable otherwise than by instalments:
- within one year or on demand (7.4) (0.6)
7.3 Net (borrowings)/cash
Total bank and other borrowings (7.4) (0.6)
Finance lease obligations:
-due within one year (0.3) (0.7)
-due between one and two years (0.2) (0.3)
-due between two and five years - (0.1)
------ -------
(0.5) (1.1)
Cash at bank and in hand 4.5 10.3
------ -------
Net (borrowings)/cash (3.4) 8.6
7.4 Currency Analysis
Bank and other borrowingts are payable
in the following currencies:
-Sterling (7.4) -
-French Franc - (0.2)
-Barbados Dollar - (0.4)
----- ------
(7.4) (0.6)
Cash at Bank and in hand is analysed in the following
currencies:
-Australian Dollar 0.4 0.4
-Canadian Dollar 0.6 0.2
-Sterling - 5.8
-United States Dollar 2.2 2.7
-Netherland Guilder 1.0 1.1
-Others 0.3 0.1
------ -------
4.5 10.3
====== =======
Notes to the Financial Information
continued
8. Reconciliation of movements in
shareholders' funds
2001 2000
#m #m
(Loss)/profit for the financial
year (0.5) 10.5
Dividends (5.8) (5.6)
------ -------
Retained (loss)/profit for the
financial year (6.3) 4.9
Issue of additional share capital
to shareholders - 1.4
Currency translation differences on
foreign currency net assets and
certain loans 0.3 (2.3)
Goodwill reinstated on disposal of
businesses 9.0 58.6
Goodwill charged to the profit and loss
account previously written off
directly to reserves 1.2 1.2
Purchase of own shares (Note 13) (1.7) -
------ -------
Net increase in shareholders' funds 2.5 63.8
Opening shareholders' funds 60.5 (3.3)
----- -------
Closing shareholders' funds as at
31 January 2001 63.0 60.5
===== =======
In the year ending 31 January 2000 an exchange loss of #0.5m on relevant
foreign currency loans was taken to reserves and offset against the exchange
profit arising on the translation of the net investments in overseas
subsidiary undertakings.
Goodwill of #10.3m which arose on the acquisition of the original shareholding
of Orient Lanka Limited in 1996 was written off to reserves. With effect from
1 February 1998 this is being amortised through the profit and loss account
over 8.5 years (the remaining life of the licence as at that date).
Accordingly, the charge in the profit and loss account of #1.2m (1999/00:
#1.2m) has been added back into shareholders' funds.
Notes to the Financial
Information continued
9. Notes to the cash flow statement
9.1 Reconciliation of operating profit to net cash inflow from operating
activities
Continuing Discontinued Total Total
2001 2001 2001 2000
#m #m #m #m
Operating 16.3 (1.1) 15.2 20.8
profit/(loss)
Loss on sale of fixed - - - 0.1
assets
Depreciation 10.2 - 10.2 11.6
Goodwill amortisation 3.2 - 3.2 2.9
(Increase)/decrease
in stocks (3.4) - (3.4) 2.3
(Increase)/decrease
in debtors (3.0) (0.2) (3.2) 6.8
Decrease)/increase
in creditors (1.9) 0.2 (1.7) (6.6)
------ ------ ------ -------
Net cash inflow from
operating activities 21.4 (1.1) 20.3 37.9
======= ======= ======= =======
9.2 Reconciliation of net cash flow to movement in net debt
2001 2000
#m #m
(Decrease) in cash in the period (6.9) (4.0)
(Increase)/decrease in debt
and lease financing (5.4) 90.8
------ -------
Change in net cash from cash flows (12.3) 86.8
Translation differences 0.3 (2.0)
------- -------
Movements in net cash in period (12.0) 84.8
Net cash/(debt) at 1 February 2000 8.6 (76.2)
------ ------
Net (debt)/cash at 31 January 2001 (3.4) 8.6
====== ======
9.3 Analysis of net debt
1 February Cash Exchange 31 January
2000 flows movement 2001
#m #m #m #m
Cash at bank and in
hand 10.3 (6.1) 0.3 4.5
Overdrafts (0.6) (0.8) - (1.4)
9.7 (6.9) 0.3 3.1
Debt due within 1
year - (6.0) - (6.0)
Finance leases due
after 1 year (1.1) 0.6 - (0.5)
------ ------ ------ ------
(1.1) (5.4) - (6.5)
----- ------- ------ ------
Total 8.6 (12.3) 0.3 (3.4)
====== ======= ====== ======
Notes to the Financial Information
continued
10. Acquisitions of businesses
Provisional
ALPHA fair value and
Flight Tax Free book value at the
Services Shops ISG AIFR ATS date of acquistion
Pty
#m #m #m #m #m #m
Goodwill 1.8 0.6 1.8 1.2 0.9 6.3
Share of
net assets
acquired - 0.4 - - - 0.4
Minority
interest 0.1 - - 0.1 - 0.2
------- ------ ------ ------ ------ -----
Total net
assets acquired 1.9 1.0 1.8 1.3 0.9 6.9
Satisfied by:
Cash
(including costs
of acquisitions) 1.9 1.0 1.8 1.3 0.2 6.2
Deferred
consideration - - - 0.7 0.7
------ ------ ------ ----- ------- --------
1.9 1.0 1.8 1.3 0.9 6.9
On 1 February 2000 the Group acquired the remaining 15% minority interest in
ALPHA Flight Services Pty. Limited for a consideration of #1.9m. This resulted
in a further #1.8m of goodwill which is being amortised over 20 years.
On 15 June 2000 the Group paid #1.0m to Virgin Express, Brussels for a 49.98%
interest in Tax Free Shops. This resulted in provisional goodwill of #0.6m
which is being amortised over the life of the in-flight retailing contract
with Virgin Express (5 years).
On 4 October 2000 the Group acquired a 25% interest in Inflight Sales Group
(Asia) Limited ("ISG"), a Hong Kong based in-flight retailer, with operations
in the USA and Far East. The consideration was US $2.5m (#1.8m) and goodwill
of #1.8m arising on this acquisition will be written off over 5 years. An
additional deferred consideration of up to US$2.5m would be payable contingent
on ISG's profits exceeding a target in the year to 31 August 2001 which, based
on latest forecasts, ISG is unlikely to achieve. Therefore, no provision for
deferred consideration has been made.
On 23 October 2000 the Group acquired the remaining 20% minority interest in
ALPHA On Board Sales and Services (later renamed as ALPHA In-flight Retail
Limited), for a consideration of #1.3m. This resulted in goodwill of #1.2m
which is being written off over 20 years.
On 28 January 2001 ALPHA Flight Services Pty. Limited purchased the business
of ATS Air Terminal Services Pty Limited, a catering business based in
Brisbane, for a consideration of #0.8m payable in four instalments, of which
#0.2m was paid on acquisition. In addition, a final amount of #0.1m will
become payable in 2003 provided the airline contract is renewed prior to the
date of that payment. Total goodwill of #0.9m arose on the acquisition and is
being amortised over 22 months (the remaining life of the airline catering
contract).
Notes to the Financial Information
continued
11. Disposals of businesses
ALPHA Flight
Services OBSS
SAS Sri Lanka Total
#m #m #m
Net assets disposed of:
Tangible fixed assets 0.4 - 0.4
Stocks 0.1 - 0.1
Debtors 0.9 0.5 1.4
Creditors (1.5) (0.3) (1.8)
------ ------- -----
(0.1) 0.2 0.1
Goodwill previously eliminated
against reserves 8.1 0.9 9.0
Loss on disposal of discontinued
businesses (8.1) (0.3) (8.4)
(0.1) 0.8 0.7
Satisfied by:
Closure costs (0.1) - (0.1)
Cash consideration - 0.8 0.8
------ ------ -------
(0.1) 0.8 0.7
On 25 June 2000 the flight kitchen at Paris Orly ceased trading and was closed
shortly afterwards, assisted by the French courts. Losses of #1.1m up until
the date of cessation of operations have been reported within trading profit.
The loss on disposal of discontinued business (#8.1m) includes the costs of
cessation together with goodwill of #8.1m previously charged against reserves.
On 23 October 2000 the Group sold its interest in OBSS Sri Lanka for a
consideration of #0.8m which resulted in a loss on sale of #0.3m after
charging goodwill of #0.9m previously eliminated against reserves.
12. Post balance sheet events
Since the year end the Group has acquired a 25% interest in Airchef 2000 Srl,
for #2.9m.
In December 2000, the Group paid a deposit of #0.1m in respect of a proposed
purchase for the flight catering business of Banksia Pacific Pty Ltd. The
purchase was completed on 6 March 2001 for a total consideration of #1.7m.
13. Purchase of own shares
During the year the Company purchased a total of 4.1m shares representing
2.35% of the ordinary share capital of the Company as at 31 January 2000. The
nominal value of the shares purchased (#0.4m) has been credited to the capital
redemption reserve.
The total cost of the purchase of #1.1m has been charged to the profit and
loss account reserve (Note 8).
14. Preliminary Announcement
The preliminary results for the year ended 31 January 2001 are unaudited. 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 2000 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 2001
will be finalised on the basis of the financial information presented by the
Directors in the Preliminary announcement.
15. Dividend
The record date for the final dividend is 6 April 2001 and payment date is 6
June 2001.
16. Issue of Annual Reports and Accounts
The 2001 Annual Report and Accounts will be posted to shareholders by 4 May
2001. 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. 020 580 3200.
17. Annual General Meeting
The 2001 Annual General Meeting of ALPHA Airports Group Plc will be held in
the Aviation Suite, Heathrow Park Hotel, Bath Road, Longford, West Drayton,
Middlesex UB7 0EQ on 31 May 2001, at 11am.
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