Shannon Group Plc Annual Report 2017
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2017 ANNUAL REPORT AND ACCOUNTS INVESTING IN OUR FUTURE www.shannongroup.ie Annual Report and Accounts I 2017 Annual Report and Accounts I 2017 CONTENTS 2 About Shannon Group plc DIRECTORS’ REPORT AND FINANCIAL STATEMENTS 3 Shannon Group Economic Impact 42 Directors’ Report 5 Chairman’s Statement and Chief Executive Officer’s Review 51 Statement of Directors’ Responsibilities in respect of the 13 Financial Overview Annual Report and the Financial Statements 14 Investing for Growth 52 Independent Auditor’s Report to the Members of 16 Shannon Airport 2017 Aviation Highlights Shannon Group plc 18 Commemorating the legacy of Dr Brendan O’Regan 53 Consolidated Statement of Profit or Loss 20 Shannon Group Businesses 54 Consolidated Statement of Other Comprehensive Income 28 Shannon Group Welcomes 55 Consolidated Statement of Financial Position 30 Board of Directors 56 Company Statement of Financial Position 32 Executive Team 57 Consolidated Statement of Changes in Equity 35 Corporate Social Responsibility 58 Company Statement of Changes in Equity 59 Consolidated Cash Flow Statement 60 Company Cash Flow Statement 61 Notes to the Financial Statements FURTHER INFORMATION 100 General Business and Other Information 101 Shannon Airport Route Maps – Summer 2018 2 1 Annual Report and Accounts I 2017 Annual Report and Accounts I 2017 ABOUT SHANNON GROUP PLC SHANNON GROUP ECONOMIC IMPACT Shannon Group plc is a commercial semi-state group, comprising three companies, Shannon Group is a key economic engine for the West of Ireland. focused on delivering economic benefits for the West of Ireland and the wider Shannon Group is a key economic engine for the work, visit and do business and every day Our property company is providing key business national economy. The Group is a major economic asset and driver of the Irish West of Ireland. A recent study, undertaken by we open up the world for the many leisure infrastructure to create the environment to W2 Consulting, has calculated that Shannon and business travellers who pass through support IDA Ireland and Enterprise Ireland economy, both at national and regional level. It brings together Shannon Airport Group generates €3.6 billion in GVA (Gross Value our airport. to entice foreign direct investment (FDI) and Added) each year, supporting over 46,500 jobs indigenous jobs to the area. Our heritage company provides visitor Authority DAC (‘Shannon Airport’), Shannon Commercial Enterprises DAC (‘Shannon which contribute €1.15 billion in tax revenue to attractions to give people reasons to visit our the Exchequer. Commercial Properties’) and Shannon Heritage DAC (‘Shannon Heritage’). region and stimulates annual tourism revenue A well-connected airport improves the economic of over €40 million. The Group was formally established on 5 environs, supports the growing aviation cluster tourism company Shannon Heritage. Today, attractiveness of the region as a place to live, September 2014 following the enactment of the at Shannon through the IASC brand, harnesses Shannon Group employs over 680 people in State Airports (Shannon Group) Act, 2014. its property and land assets owned by Shannon high season. Commercial Properties, and offers visitors a Shannon Group provides air transport and range of heritage tourism options through its aviation services at Shannon Airport and its OVERALL ECONOMIC IMPACT OF SHANNON GROUP BY BUSINESS SHANNON AIRPORT 13,695 jobs OUR VISION is to be a €938 Million GVA customer and value-driven €318 Million TAX success story making a real difference by attracting more and more people and CATALYTIC IMPACT businesses to our region. OF AIRPORT 31,900 jobs €2.6 Billion GVA €821 Million TAX ECONOMIC IMPACT OF SHANNON GROUP 46,516 jobs €3.6 Billion GVA SHANNON OUR MISSION is to manage OUR CORE VALUES €1.15 Billion TAX and develop our aviation, tourism demonstrate the standards and COMMERCIAL and property assets, to generate principles that define what we PROPERTIES a sustainable commercial return, do and how we do it, central to 81 jobs to drive excellence in safety these are: Integrity, Customer €12 Million VA standards and service to customers Focus, Teamwork, Innovation, G and to make a difference to the Responsibility and Community €3.8 Million TAX communities we serve. Engagement. SHANNON HERITAGE 840 jobs €28 Million GVA €8.9 Million TAX 2 3 Annual Report and Accounts I 2017 Annual Report and Accounts I 2017 CHAIRMAN’S STATEMENT AND CHIEF EXECUTIVE OFFICER’S REVIEW 4 5 Annual Report and Accounts I 2017 Annual Report and Accounts I 2017 Shannon Heritage continued to develop product of Brexit. The recognition of policymakers of the I would like to acknowledge the support and CHAIRMAN’S offering and recorded over 887,300 visitors to national importance of increased air connectivity encouragement we received during the year its sites in the Mid-West and Dublin in 2017. into the West of Ireland; of the role of tourism from our Shareholder, the Department of Over the past five years visitor numbers to in supporting effective regional growth; and Transport, Tourism and Sport, and thank STATEMENT its attractions have doubled. It continues to the importance of strong infrastructure to Minister Ross and his department team for their A Strong Foundation for the Future play an important role in attracting overseas attract FDI, will be vital to achieving our continued support. visitors to the region and provided a range ambitious targets. On 28 August 2017, Tony Brazil and Michael of special events for its domestic customers It is certainly challenging for other Irish airports Leydon retired from the Shannon Group Board throughout 2017. to grow market share given the extent of having served their full term. I would like to CONTINUED IMPROVEMENT IN FINANCIAL The support outlined in the National Aviation which was completed on time and on budget. Dublin’s dominance. We believe that it is thank them for their contribution and support OPTIMISING FUTURE GROWTH POTENTIAL PERFORMANCE AND INVESTMENT IN OUR Policy for the role of Shannon Airport as a key We expanded our customer offering to add a important for Ireland to have a strong, growing during their time on the Board and wish them We are entering the next phase in our FUTURE tourism and business gateway for the region, new look Duty Free store, improved executive airport in its capital, providing access to new every success in their future endeavours. I would development as a Group. We have achieved a I am pleased to report that 2017 was Shannon particularly with regard to the development of lounges, restaurant and dining facilities. destinations across the globe. However, there is like to extend a warm welcome to Tom Kelly, Group’s third consecutive year of growth since lot to date, but we know that there is more to a risk that the dominance of Dublin Airport will Chief Executive Officer of AerCap Ireland, who niche markets, is also very welcome. Shannon Commercial Properties accelerated the establishment of the Group in 2014, with the be done in the future. limit the growth in connectivity in the regions, was appointed to the Shannon Group Board on Shannon Group’s €150 million-plus investment its €40 million investment programme Group delivering a strong financial performance. We believe that with the right supports, Shannon which in turn will limit the ability of these 25 October 2017. plan to 2022, contained in the National currently underway at Shannon Free Zone We continued to focus on delivering our Group can be central to delivering the economic regions to grow. Development Plan, is a statement of our intent aimed at bringing significant new advanced My thanks to our many loyal customers and commercial mandate and improving our overall development and employment ambitions set and determination to grow Shannon Airport, manufacturing, warehousing and office space Therefore we welcome the statement regarding business partners who have supported Shannon profitability during the year. This has resulted in out in the National Planning Framework. With Shannon Commercial Properties, Shannon solutions to support the IDA and Enterprise the Mid-West in the National Planning Airport, Shannon Commercial Properties and the Group recording a turnover of €72.2 million, Government support I believe we can unleash Heritage and the International Aviation Services Ireland led drive for inward investment in Framework emphasising that future growth Shannon Heritage throughout the year. Rest up 7.4% on 2016 and a 23% increase in EBITDA Shannon Group’s significant potential to Centre. As a major economic asset and key the region. will be based on leveraging national and assured that we remain committed to further to €9.3 million. This is a positive performance meet the objectives of the National Planning international connectivity. We believe that it is enhancing our customer experience and service driver of the Irish economy, both at national Building on the drive to create the right and creates a strong foundation for the future. Framework for more balanced regional growth. critically important for all of our stakeholders, offering in the years to come. and regional level, we have made and continue environment for industry to thrive, Shannon Shannon Group is already a proven economic that our region has year-round access to key to make a huge contribution as an enabler of Commercial Properties unveiled a 6,000 sq I look forward to 2018 as a year of further DELIVERING OUR GOALS engine for the region, with the Group’s business hubs in North America and Europe, to economic growth nationally and regionally. ft Gateway Hub enterprise space at Shannon growth and investment in the Group and On the formation of Shannon Group, our initial activities supporting over 46,500 jobs, support our growth. It is very important for Ireland that we seize Airport House. Officially opened in November continued value-creation for stakeholders.