NATS Holdings Limited – Results for year ended 31 March 2015

NATS Holdings Limited (NATS) today announced its results for the year ended 31 March 2015.

Notes

1 Operating profit before the cost of redundancy and goodwill impairment
2 Excludes derivative financial instruments
3 Ratio of the net debt to regulatory assets of the economically regulated business, NATS (En Route) plc
4 Paid in financial year.  In May 2015 the company declared an interim dividend for the year ending 31 March 2016 of £54.4m which was paid to shareholders in June 2015.
5 An Airprox is a situation in which, in the opinion of a pilot or a controller, the distance between aircraft as well as their relative positions and speed have been such that the safety of the aircraft involved was or may have been compromised.

Martin Rolfe, CEO, commenting on the results, said:

“The past year saw some good growth for the UK aviation sector. Air traffic volumes increased compared with the previous year, reflecting improvements in the economy. I am pleased to report that NATS supported our airline and airport customers by maintaining our excellent overall safety, service and environmental performance.

“Our profit before tax was £200.3m, which was £42.8m higher than the previous year.  Our underlying performance remained strong and our results reflected far lower exceptional charges for redundancy and goodwill impairment.

“We have not lost sight of the technical failure at Swanwick in December 2014.  On behalf of NATS, I apologise again for the inconvenience caused to passengers and our customers.  We are pleased that the Independent Enquiry Report acknowledged that safety was not compromised at any time and it recognised the quality and timeliness of NATS’ response.  We will be implementing the majority of the Enquiry’s recommendations.”

“Turning to the future, we are pleased that the European Commission confirmed that our plan for the regulated business for Reference Period 2 (RP2: 2015-2019) met its targets.  Over this period, when we expect traffic to continue to grow, our plan is to deliver a 21% reduction in prices by 2019 while retaining the excellent safety and service standards that our customers rely on.

“Through our Aquila joint venture, and with our partner Thales, we will deliver the Project Marshall contract that was awarded by the Ministry of Defence last year.  This contract will deliver a genuine transformation of the military’s air traffic management and will help its cost efficiency.”

Paul Golby, Chairman, said:

“Since joining in September, I have been immensely impressed by the clear focus on safety and real drive for excellence in customer service of everyone I have met at NATS.

More than 240 million passengers flew safely through the UK and North Atlantic airspace over the 12 months, with the overwhelming majority experiencing no delay due to NATS.  This was a good way to end the regulatory reference period.  I would like to thank NATS staff for their support in achieving this outcome.

“In the coming years, the company faces a number of challenges including significant RP2 price reductions, the increasingly competitive UK airport market and other cost pressures such as a higher pension accounting cost and depreciation charges.   We expect this to result in a much lower group profit before tax in 2016.  I am confident though that our future plans will address the lessons of 2015 and the challenges of the years ahead.”

• View the Annual Report and Accounts for 2015

Notes to Editors

• The accounts of NATS Holdings Limited and its subsidiaries were approved by the Board on 25 June 2015 and are subject to formal adoption by shareholders at the Annual General Meeting to be held on 30 July 2015. NATS Holdings Limited is the parent company of the NATS group.

• NATS Holdings Limited operates through a Private Public Partnership (PPP) and is owned by the UK Government (48.9%); The Airline Group Limited (41.9%); LHR Airports Limited (4.2%) and the NATS Employee Sharetrust Limited (5.0%). The Airline Group is a consortium including British Airways plc, Monarch Airlines Retirement Benefit Plan Limited, easyJet Airline Company Limited and USS Sherwood Limited.  Nominal shareholdings in The Airline Group are retained by Deutsche Lufthansa AG, Thomson Airways Limited, Thomas Cook Airline Limited and Virgin Atlantic Airways Limited.

• NATS (En Route) plc (NERL) is the core of NATS’ operations and accounts for more than 75% of the NATS group’s revenue.  It is the sole provider of air traffic control services for aircraft flying en route in UK airspace and the eastern part of the North Atlantic.  It provides approach services to aircraft arriving at or departing from the major airports around London and air traffic control services to helicopters operating in the North Sea.  NERL also has a long-term agreement to provide the military with engineering, surveillance and communications services.  It is economically regulated by the Civil Aviation Authority (CAA) within the framework of the European Commission (EC) Single European Sky (SES) and operates under licence from the Secretary of State for Transport.  It operates from two air traffic control centres, at Swanwick in Hampshire and Prestwick in Ayrshire. NERL reported a profit before tax of £172.7m (2014: £133.9m).

• NATS (Services) Limited provides air traffic services at most of the UK’s major airports, including Heathrow and Gatwick, the world’s busiest dual and single-runway airports. NATS Services also sells engineering, consultancy (including training), defence and aviation information management services to customers in the UK and overseas. NATS Services reported a profit before tax of £27.9m (2014: £23.3m).