OLNEY 1 BRAVO
26th Nov 2003, 21:06
From the FT:
TBI encounters turbulence at US airport operations
By Sharlene Goff
TBI's interim profits took a nosedive as the airports operator revealed a £6.3m goodwill write-down relating to its US airport services business.
The group, which was hit by the collapse in air travel after September 11, yesterday said pre-tax profit fell 52 per cent to £7.2m in the six months to September 30. It was also affected by increased recurring costs, such as air traffic control fees and pension and insurance charges.
Keith Brooks, chief executive, said the group would consider selling the US business, providing the timing and circumstances were right.
He added that the company's focus on providing services to low-cost airlines had helped lift revenues by 4 per cent. Passenger numbers also increased, from 8.71m to 9.95m, of which 68 per cent flew with low-cost carriers.
The refinancing of its debt facilities at Luton incurred a one-off charge of £1.8m but it was expected to provide an annual interest saving of £1.6m.
The number of charter passengers at the London airport fell by 15 per cent as MyTravel withdrew some of its routes.
But Mr Brooks said Luton was a big opportunity for growth, especially since EasyJet had launched a thrice-daily route from Luton to Berlin Schonefeld this month.
Ryanair had also established a base at TBI's Stockholm Stavsta airport, which more than tripled passenger traffic, but costs in the development of terminal facilities led to operating losses of £656,000 (profit of £166,000). Sales were £103.5m (£99.7m). Earnings per share fell from 1.34p to 0.01p and the interim dividend was maintained at 0.7p. The shares fell 2¼p to 60p.
FT Comment
* The increase in costswas greater than anticipated and triggered a spate of downgrades. Oriel Securities reduced its estimate for full- year pre-tax profit before exceptionals by £3m to £23.1m. The shares, which have rallied 34 per cent since March, are trading on a p/e of about 24.5 compared with BAA on about 15. Evidence of tighter cost control and an upturn in passenger numbers might be needed before this premium can be justified.
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1069493501241&p=1012571727117
With this set of results, even if Luton does get the go ahead from the government for major expansion, how on earth are TBI going to fund it? Moreover, I see they are still going on about the withdrawal of the Summer 2003 My Travel Programme - certainly it was severely cut back and there was no based aircraft but some of the programme did happen and on other airlines. There seems to be a convenient omission of the fact that Air 2000 had an aircraft based at Luton every day of the week rather than for just three days as in previous years. They also fail to mention all the business that continues to go to Stansted in preference to Luton.
Unless of course the downturn is a result of trying to keep Buster in sarnies!!
For what it is worth, I would not be surprised if TBI's share in Luton is sold so long as the forthcoming Government decisions on airports in the south east are beneficial to Luton and allow it to expand - it will be rather like having a piece of land with planning permission already granted.
Discuss!
TBI encounters turbulence at US airport operations
By Sharlene Goff
TBI's interim profits took a nosedive as the airports operator revealed a £6.3m goodwill write-down relating to its US airport services business.
The group, which was hit by the collapse in air travel after September 11, yesterday said pre-tax profit fell 52 per cent to £7.2m in the six months to September 30. It was also affected by increased recurring costs, such as air traffic control fees and pension and insurance charges.
Keith Brooks, chief executive, said the group would consider selling the US business, providing the timing and circumstances were right.
He added that the company's focus on providing services to low-cost airlines had helped lift revenues by 4 per cent. Passenger numbers also increased, from 8.71m to 9.95m, of which 68 per cent flew with low-cost carriers.
The refinancing of its debt facilities at Luton incurred a one-off charge of £1.8m but it was expected to provide an annual interest saving of £1.6m.
The number of charter passengers at the London airport fell by 15 per cent as MyTravel withdrew some of its routes.
But Mr Brooks said Luton was a big opportunity for growth, especially since EasyJet had launched a thrice-daily route from Luton to Berlin Schonefeld this month.
Ryanair had also established a base at TBI's Stockholm Stavsta airport, which more than tripled passenger traffic, but costs in the development of terminal facilities led to operating losses of £656,000 (profit of £166,000). Sales were £103.5m (£99.7m). Earnings per share fell from 1.34p to 0.01p and the interim dividend was maintained at 0.7p. The shares fell 2¼p to 60p.
FT Comment
* The increase in costswas greater than anticipated and triggered a spate of downgrades. Oriel Securities reduced its estimate for full- year pre-tax profit before exceptionals by £3m to £23.1m. The shares, which have rallied 34 per cent since March, are trading on a p/e of about 24.5 compared with BAA on about 15. Evidence of tighter cost control and an upturn in passenger numbers might be needed before this premium can be justified.
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1069493501241&p=1012571727117
With this set of results, even if Luton does get the go ahead from the government for major expansion, how on earth are TBI going to fund it? Moreover, I see they are still going on about the withdrawal of the Summer 2003 My Travel Programme - certainly it was severely cut back and there was no based aircraft but some of the programme did happen and on other airlines. There seems to be a convenient omission of the fact that Air 2000 had an aircraft based at Luton every day of the week rather than for just three days as in previous years. They also fail to mention all the business that continues to go to Stansted in preference to Luton.
Unless of course the downturn is a result of trying to keep Buster in sarnies!!
For what it is worth, I would not be surprised if TBI's share in Luton is sold so long as the forthcoming Government decisions on airports in the south east are beneficial to Luton and allow it to expand - it will be rather like having a piece of land with planning permission already granted.
Discuss!