NATS Holdings Limited – Results for the year ended 31 March 2018
NATS Holdings Limited (NATS) today announced its results for the year ended 31 March 2018.
|Financial year ended 31 March||2018||2017|
|Revenue – £m||913.1||919.3|
|Profit before tax and goodwill impairment – £m||132.8||136.5|
|Profit before tax – £m||132.8||125.5|
|Capital expenditure – £m||185.6||156.4|
|Net debt1 – £m||71.5||132.7|
|Gearing2 – (%)||27.5%||35.9%|
|Dividends3 – £m||57.0||24.0|
|Flights handled (millions)||2.52||2.45|
|Safety: risk-bearing Airprox4 (attributable to NATS)||0||0|
|Delay seconds per flight (en route delay attributable to NATS)||7.2||10.9|
|Cumulative % reduction in enabled CO2 savings (average per flight against a 2006 baseline)||6.4%||5.0%|
1. Excludes derivative financial instruments
- Ratio of net debt to regulatory assets of the economically regulated business (NATS (En Route) plc)
3. Paid in financial year. In June 2018 the company paid an interim dividend for the year ending 31 March 2019 of £29.5m.
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:
“2017/18 was a positive year. Our controllers safely managed a 2.7% increase in flights over the UK and North Atlantic with very little delay, providing an excellent service to our airline customers. At the same time, we successfully deployed a major technology upgrade in our Swanwick centre for the airspace sectors over London’s airports.
“During the year, we obtained support from our customers for a revised technology and airspace investment plan until the end of 2019. This focuses on developing new technology enabling us to move away more quickly from current systems. We are now consulting customers on our initial Business Plan for the next regulatory reference period (2020 to 2024) which will modernise and transform our business.
“We renewed a number of important UK airport contracts and made significant progress in developing our presence in Asia Pacific with new contracts awarded in Hong Kong and Singapore.
“We made great strides in two areas of advanced technology that will redefine air traffic management. We invested in Searidge Technologies, a Canadian provider of smart digital tower technology. London City Airport also chose NATS to provide a digital tower service from 2020 and we are developing a prototype digital tower for Singapore’s Changi Airport. We also made a strategic investment in Aireon, which is creating a global satellite-based air traffic surveillance service capable of tracking and monitoring aircraft in real-time. This will provide safety, capacity and fuel saving benefits to customers flying across the North Atlantic.
“This year the group reported a profit before tax of £132.8m (2017: £125.5m, after charging £11m for goodwill impairment). Excluding goodwill impairment, the result was slightly lower than last year. This was because the additional revenue we received from air traffic growth was offset by price reductions for our airline customers as well as a reassessment of our earnings from the MOD’s Project Marshall asset provision contract and higher operating costs.”
Chairman, Dr. Paul Golby said:
“I am pleased with our safety, operational and financial performance during 2017/18 and the contribution we made to a very busy global aviation network. Our air traffic service is a vital part of this and we are now looking increasingly to the role we can play in the future of the wider aviation industry.
“Our industry faces fundamental challenges in the coming years. Air traffic in the UK is forecast to rise to three million flights per year by 2030, exceeding current airspace capacity. We will also have to accommodate new airspace users, such as drones, making our airspace even more complex. To meet these challenges, and to serve the nation as effectively as we do today, we will need to transform our industry.
“We are consulting our customers on an initial Business Plan that will ensure we are able to respond to these new emerging challenges. However, NATS cannot do this alone. In order for the country to realise the benefits of economic growth through increasing air travel while minimising the impact on overflown communities, it will be essential to adopt a collaborative approach with the wider aviation industry, government, the CAA and local communities.
“In the current reference period (2015-2019) we have started to make the comprehensive technical, software and airspace changes required to safely handle air traffic growth and will complete this programme of change by the middle of the next decade. We have much work to do alongside our airline and airport customers and local communities to complete this modernisation programme.”
Notes to Editors
- The accounts of NATS Holdings Limited and its subsidiaries were approved by the Board on 5 July 2018 and are subject to formal adoption by shareholders at the Annual General Meeting to be held on 26 July 2018. 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, the Pension Protection Fund, easyJet Airline Company Limited and USS Sherwood Limited. Nominal shareholdings in The Airline Group are retained by Deutsche Lufthansa AG, Thomas Cook Airlines Limited, TUI Airways 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. NERL reported a profit before tax of £134.2m (2017: £104.8m).
- NATS (Services) Limited provides airport air traffic and related engineering services at most of the UK’s major airports, including Heathrow, the world’s busiest dual runway airport. It provides defence services to the UK MOD through Aquila, a joint venture, including air traffic services at four airfields and asset and service support. In the UK, it also provides information, design and data services to airlines and airspace users. Its international services are provided primarily to customers in Asia Pacific and the Middle East. NATS Services reported a profit before tax of £2.5m (2017: £17.3m).