MAG Annual Report and Accounts 2018 MAG Annual Report and Accounts 2018 Overview
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ANNUAL REPORT AND ACCOUNTS ANNUAL REPORT FOR THE YEAR ENDED 31 MARCH 2018 MAG Annual Report and Accounts 2018 MAG Annual Report and Accounts 2018 Overview MAG is a leading UK airport group which owns and operates three major UK airports and a successful airport property business. Manchester London Stansted East Midlands MAG Property Airlines Destinations Revenue1 Cash generated supported fromreached operations1 £818.1m Cargo shipped XX £328.8XXX m Passenger +10.2%+XX% +XX% (tonnes) 2017: £742.7m +3.6% numbers Airlines (2016: X X) Adjusted EBITDA*,1 (2016:2017: £317.3m XXX) 58.9XXXkm supported +XX%+6.7% £358.8XX m (2016:2017: 55.2m XXXk) +XX%+5.8% 2017: £339.2m (2016: X X) Notes 1 All numbers relate to continuing operations, and 2017 numbers have been restated as explained on pages 78 and 120. * As explained in the financial review on page 30. Content Section at start: Page Title at start: Overview Our vision 1 Strategic report Governance Financial statements OUR VISION View the latest results online at To be the premier www.magairports.com/ airport management investor-relations/ and services company. Overview 1 Our vision 2 Our mission 3 Financial highlights 4 At a glance 6 Global connectivity Strategic report 8 Chairman’s statement 10 Key performance indicators 12 Chief Executive’s operating review 18 Business model 20 Our strategy 28 Financial review 40 Risk management 44 Corporate social responsibility ResultPassenger from 1 operationsNumbers Governance 54 Chairman’s introduction to corporate governance £206.8XX.Xmm 56 Board of Directors 59 Corporate governance report +XX%+5.6% 67 Directors’ remuneration report (2016:2017: £195.8m 55.9) 70 Directors’ report 73 Directors’ responsibilities statement CargoAdjusted* shipped,1 operating(tonnes) profit Financial statements 76 Independent auditor’s report XXXk 78 Accounting policies £215.4 m 84 Consolidated income statement +XX%+6.2% 85 Consolidated statement of comprehensive income (2016:2017: £202.9m XXXk) 86 Consolidated statement of changes in equity 87 Consolidated statement of financial position 88 Consolidated statement of cash flows 89 Notes to the financial statements Notes 1 All numbers relate to continuing operations, and 2017 numbers 121 Company financial statements have been restated as explained on pages 78 and 120. * As explained in the financial review on page 30. Content Section at start: Page Title at start: Our mission 2 MAG Annual Report and Accounts 2018 Overview OUR MISSION To deliver sustainable growth in shareholder value, balancing the needs of our customers, passengers, employees and the communities in which we work, while maintaining the highest safety and security standards. Operating highlights • Successful route network development over the course of the year with an array of important destinations added • Emirates announces a daily link from London Stansted to Dubai, the first time a Middle Eastern hub carrier has served London Stansted • Start of Manchester Airport Transformation Programme, which will give the airport the terminal facilities needed to make best use of its two full-length runways • The initial phases of London Stansted’s Transformation Programme got underway, which will ultimately provide the facilities for long-term growth • London Stansted submitted a planning application to raise limits on the number of passengers that the airport is permitted to serve from 35m passengers per year to 43m – without increasing the currently permitted number of flights or the agreed noise footprint • Let 70,000 sq ft of office space, including 51,000 sq ft to e-commerce giant The Hut Group, at Manchester Airport 280+ • Major new employment programme, destinations by MAG Connect, launched in response to 70 airlines expected growth in the coming years 680k745k tonnes of cargo shipped Content Section at start: Page Title at start: Financial highlights 3 Strategic report Governance Financial statements Financial highlights1 Revenue Adjusted EBITDA* Adjusted operating profit* £818.1m £358.8m £215.4m 2018 818.1 2018 358.8 2018 215.4 2017 742.7 2017 339.2 2017 202.9 2016 715.0 2016 317.7 2016 186.9 +£75.4m +£19.6m +£12.5m +10.2% +5.8% +6.2% Passenger Cash generated Result from numbers from operations operations 58.9m £328.8m £206.8m 2018 58.9 2018 328.8 2018 206.8 2017 55.2 2017 317.3 2017 195.8 2016 51.2 2016 322.4 2016 175.6 +3.7m +£11. 5 m +£11. 0 m +6.7% +3.6% +5.6% Notes 1 All numbers relate to continuing operations unless stated, and 2017 and 2016 numbers have been restated as explained on pages 78 and 120. * As explained in the financial review on page 30. Content Section at start: Page Title at start: At a glance 4 MAG Annual Report and Accounts 2018 Overview At a glance The Group serves almost 60m passengers flying through its airports, which together employ over 5,000 MAG personnel and support over 40,000 jobs onsite. Group revenue MAG’s overall strategic intent is to increase long-term shareholder value by 40.7% £544.6m generating profitable growth, developing 2017 its assets and deploying efficient and customer-focused operating processes throughout the business. Group Revenue £818.1m Aviation Aviation £332.7m +10.2% Retail £482.3m 2016 Retail £181.6m 2017: £742.7m Car parking Car Parking £187.2m Property Property £44.4m Other Other £72.2m Aviation Retail MAG has a diverse carrier mix from across the globe, with an excellent Across our airports, retail space at MAG extends to in excess of track record of supporting and delivering passenger growth. 400,000 sq ft with over 50 operators and we work with a diverse range of brands, both new and established, to help them operate By forging strong commercial partnerships with airlines, our airports successfully in an airport environment. have been able to increase choice and convenience for our passengers and make a stronger contribution to economic growth Partnering with MAG gives retailers access to potentially more than in their regions. 58m customers each year. MAG owns and operates three of the top four cargo airports in the UK, which handle over £27.5bn and 745,000 tonnes of air cargo to and from the UK every year. Aviation revenue Operational Retail revenue Operational £332.7m 280+ £181.6 m 200+ 2017: £309.0m More than 70 airlines 2017: £163.3m shops, bars and restaurants serving 280+ destinations across our airports Content Section at start: Page Title at start: 5 Strategic report Governance Financial statements Our strategic values INVESTING Deliver great service Provide modern and customer at every touch point focused infrastructure Read more on pages 22 and 23 CONNECTING Enhance the reputation Achieve profitable growth and profile of MAG in all our businesses Read more on pages 24 and 25 TRANSFORMING Focus on Energise and unlock the operational excellence potential of our people Read more on pages 26 and 27 Car Parking Property We use a combination of market-leading analytical, ecommerce, MAG Property manages almost 6m sq ft of high-quality space in marketing and trading expertise to deliver a tried and tested formula offices, terminals, hangars, warehouses and hotels across our airport for our highly successful airport car parking businesses. Our car parks portfolio at Manchester, London Stansted and East Midlands. cater for all tastes and budgets ranging from our competitively priced We do much more than simply let the space: we understand the JetParks brand through to Meet & Greet and Valet services. complexities of the infrastructure and services that make airports work, so we know how to help businesses based there take full advantage of them. Car Parking revenue Operational Property revenue Operational £18 7. 2 m 75,000+ £44.4m £526m 2017: £163.1m parking spaces across all 2017: £42.4m of investment property our sites assets across all airports * Numbers relate to continuing operations unless stated, and 2017 numbers have been restated as explained on pages 78 and 120. Content Section at start: Page Title at start: Global connectivity 6 MAG Annual Report and Accounts 2018 Overview Global connectivity Manchester East Midlands London Stansted Investing in the future of UK aviation MAG serves almost 59m passengers flying through its airports, travelling to over 280 destinations through over 70 different airlines Content Section at start: Page Title at start: 7 Strategic report Governance Financial statements 40,000+40,000 people employed onon our site sites £7.XX.X 7 5 bn Contributedcontributed toto thethe UK economy from MAG airports 280+on site destinations £XX.Xbn Contributed to the 70+UK economy from MAGairlines airports Content Section at start: Page Title at start: Strategic report Chairman’s statement 8 MAG Annual Report and Accounts 2018 Overview Chairman’s statement This has been a landmark year for MAG “This year MAG has successfully delivered continued growth in its core business and is focused on preparing itself for the next generation of travel.” In the fast-evolving travel industry it is non-stop operation. I am pleased to report increasingly important for our organisation that through the implementation of meticulous to be able to act and execute decisively, planning, MAG is succeeding in delivering and it has been our ability to do this that on both counts. Sir Adrian Montague CBE has enabled MAG to deliver sustained At Manchester Airport the £1 billion Chairman, MAG growth in a year where there have been Transformation Programme (MAN-TP) is many challenges. fully underway with approximately £1m In the last 12 months our airports have currently being spent every day continued to perform strongly with almost on delivering a vision that will provide this 59m passengers having been through country with a truly world-class gateway our doors, delivering like-for-like revenue that will continue to link the North to key growth and increased profits for the investment and trade opportunities across seventh consecutive year.