NATS Holdings Limited – Results for the year ended 31 March 2016

20 June 2016

NATS Holdings Limited (NATS) today announced its results for the year ended 31 March 2016.

Financial year ended 31 March 2016 2015
Financial highlights:
Revenue – £m 898.1 922.4
Profit before tax, goodwill impairment & exceptional redundancy costs (in 2015) – £m  137.1 226.5
Profit before tax – £m 44.4 200.3
Capital expenditure – £m 147.6 153.5
Net debt1 – £m 303.3 378.7
Gearing2 – (%) 49.1% 53.4%
Dividends3 – £m 81.7 77.0
Operational highlights:
Flights handled 2,278,000 2,216,000
Safety: risk-bearing Airprox4 (attributable to NATS) 0 1
Delay seconds per flight (en route delay attributable to NATS) 4.3 2.2
Cumulative % reduction in enabled CO2 savings (average per flight against a 2006 baseline) 4.3% 4.2%

1. Excludes derivative financial instruments
2. Ratio of net debt to regulatory assets of the economically regulated business (NATS (En Route) plc)
3. Paid in financial year.  In May 2016 the company declared and paid an interim dividend for the year ending 31 March 2017 of £24m.
4. 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.

CEO, Martin Rolfe said:

“As indicated last year, revenue and profit were lower this year.  Our prices are reducing significantly following the 2014 regulatory review and in response to competition in the UK airport contract market.  Profit reduced through lower revenue, increases in pension costs and depreciation charges, and a higher goodwill impairment charge than last year.

“It was another very safe year for the 2.28 million flights we handled in the UK (3% more than 2015) and benchmarking against our peers around the world confirms we are meeting, and in some cases setting, safety best practice. We continue to look for ways to reduce safety risk and introduced measures over the winter which further improved safety performance.

“Average delay per flight was also good, albeit marginally higher than the previous year, and we were about seven times better than the European average.  Our introduction of Time-Based Separation at Heathrow contributed significantly to our good performance by improving landing rates in strong headwinds.

“This year we started to implement our strategy to integrate and deploy the technology necessary for the UK’s contribution to a Single European Sky and we achieved the two early milestones we set ourselves.  We also renewed or won a number of important airport contracts and, just as importantly for customers, smoothly transferred Gatwick to a new provider.”

Chairman, Dr. Paul Golby said:

“We knew that the RP2 period would be challenging as a result of tougher regulatory targets and increased competition for the provision of air traffic services at UK airports.   NATS is well equipped to meet these challenges and has a clear future focus to:

  • deliver a safe, efficient and reliable service from our air traffic control centres and airport towers;
  • transform the business through the integration and deployment of Single European Sky ATM Research programme (SESAR) technologies; and
  • win and retain commercial UK business and explore sound international opportunities as they arise.”

Notes to Editors

  • The accounts of NATS Holdings Limited and its subsidiaries were approved by the Board on 20 June 2016 and are subject to formal adoption by shareholders at the Annual General Meeting to be held on 28 July 2016.  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 Share Trust 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 £22.4m (2015: £172.7m).
  • NATS (Services) Limited provides air traffic services at most of the UK’s major airports, including Heathrow, the world’s busiest dual runway airport.  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 £22.3m (2015: £27.9m).
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