2019 Annual Report & Accounts
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PORT OF DOVER 2019 ANNUAL REPORT & ACCOUNTS Prepared for now Building for the future REPORT ‘KEEPING PEOPLE Contents AND GOODS FLOWING’ THE PORT AT A GLANCE 2 STRATEGIC REPORT Chairman’s Statement ............................................................4 Chief Executive’s Statement ...................................................8 Chief Financial Officer’s Report ............................................20 Ferry Business Model ....................................................................26 Review of Principal Risks .....................................................28 £122bn OF TRADE REPORT OF THE BOARD Board Governance Report ....................................................34 Report of the Audit Committee ...........................................38 17% Report of the Remuneration Committee ..............................40 OF TRADE IN UK GOODS Report of the Nomination Committee .................................42 Members of the Board .........................................................44 HALF OF THE FREIGHT Board Performance .............................................................46 TRAFFIC SERVES THE Directors’ Report ..................................................................48 MIDLANDS AND NORTH Statement of Responsibilities of the Board ...........................52 11 FINANCIAL STATEMENTS MILLION PASSENGERS Independent Auditor’s Report to the Members (2018: 12 MILLION) of Dover Harbour Board .......................................................56 Cargo Cruise Marina Consolidated Income Statement ..........................................58 Consolidated Statement of Comprehensive Income .............59 2.1 106 130 242 Consolidated and Board Statement of Financial Position......60 MILLION TOURIST VEHICLES SHIPS CALLS BERTH HOLDERS Consolidated and Board Statement of (2018: 2.3 MILLION) (2018: 115) (2018: 127) (2018: 244) Changes in Reserves............................................................. 61 Consolidated Statement of Cashflows .................................62 Statement of Accounting Policies .........................................63 2.4 310,907 205,674 Notes to the Financial Statements ........................................70 MILLION FREIGHT VEHICLES TONNES PASSENGERS (2018: 2.5 MILLION) (2018: 357,785) (2018: 184,966) Summary of Five Year Financial Results ...............................85 Summary of Five Year Traffic Statistics ................................85 4 | STRATEGIC REPORT STRATEGIC REPORT | 5 STRATEGIC REPORT Chairman’s Statement THE PORT HAS REMAINED CENTRAL TO THE CONTINUING DEBATE ON UK TRADE IN WHAT HAS BEEN ONE OF THE MOST UNSETTLING ECONOMIC AND POLITICAL PERIODS WE SPENT MUCH OF THE YEAR REMINDING IN PEACETIME. GOVERNMENTS, POLITICIANS, INDUSTRY AND THE GENERAL PUBLIC OF THE ENDURING Although such a climate has contributed to the wider downward trend in unitised freight, it has also highlighted BENEFITS OF DOVER’S LOCATION, EFFICIENCY, Dover’s particular importance to UK-European trade and its role as the UK’s primary access for just-in-time goods to the CAPACITY AND SERVICE FREQUENCY. whole of the UK. We spent much of the year reminding governments, politicians, industry and the general public of the enduring benefits of Dover’s location, efficiency, capacity and service frequency. This included the now Prime Minister, the Rt Hon Boris Johnson MP, who on a visit to Dover acknowledged Dover’s robust Brexit preparations and notable resilience as well as supporting its continued success for the whole of the UK. The reduced ferry traffic contributed to Group revenues being relatively flat at £71.5 million (2018: £70.5 million). In order that the Port can make the necessary and substantial investments in its critical infrastructure, careful financial management has been required to ensure that adequate profits can be maintained throughout this turbulent economic period. Despite these challenges, I am pleased to report that we achieved a headline operating profit of £12.7 million (2018: £14.6 million). Together with a focus on creating efficiencies, this prudent approach will continue to be our near term approach for the business. As we prepared for the short term, we continued building for the long term with parts of the western docks development opening for both customer and community benefit. The opening of the new marina pier and improved access to the seafront with the new and iconic bascule bridge attracted fresh community footfall from the Spring. Following the successful trialling of two new deep water berths with cruise and cargo vessels, the new Dover Cargo Terminal West, operated by Port of Dover Cargo Limited, became fully operational in early December. 6 | STRATEGIC REPORT STRATEGIC REPORT | 7 THE BOARD Bob Lane OBE retired from the Board in September 2019 having completed his six-year term. On behalf of the Board, I thank him for his contribution. Bob brought considerable expertise in the area of regeneration, which has helped guide us during the revival of the western docks throughout that time. With such a strong and continuing focus on infrastructure in both the eastern and western docks, I was pleased to welcome Jane Simpson onto the Board from October. Jane brings significant infrastructure, engineering and asset management experience as well as further increasing the number of women on the Board as part of our overall ambitions to promote women in maritime at all levels across the Group. STAFF I thank the staff for their efforts over the past year and especially for their exceptional commitment to ensuring that the Port was prepared for the UK’s departure from the EU under ‘no-deal’ terms on multiple occasions during 2019. I know that such preparations impacted staff particularly during the first half of the year and for that commitment I am most grateful. OUTLOOK Maintaining financial resilience, approach to aligning our activity with pursuing an ongoing programme of the sustainability agenda in order that I THANK THE STAFF FOR THEIR Following the General Election, the diversification within particularly the the collective Port of Dover community EFFORTS OVER THE PAST YEAR Port has engaged with senior cabinet cruise and cargo businesses and can improve our performance. ministers and officials along with our fostering a rejuvenated ferry business, AND ESPECIALLY FOR THEIR new MP to ensure Dover’s role and which has been buoyed by We remain very alert to emerging risks, requirements remain central to the announcements from both ferry and specifically impacts as a result of EXCEPTIONAL COMMITMENT Government’s future trade negotiations operators of new dedicated tonnage on the Coronavirus Pandemic. Whilst we with the EU and their success. the route, should help ensure the Port do not yet know the full degree of the TO ENSURING THAT THE PORT of Dover Group overall remains resilient impact on the business, we are We will continue to promote with and able to build for the long term. confident the Board is taking WAS PREPARED FOR THE UK’S Government, customers and reasonable mitigating actions in the stakeholders, the benefits of a thriving A key and continuing focus for 2020 short term, with an eye toward the DEPARTURE FROM THE EU UNDER and resilient Dover for industry across onwards will be our duty to administer, longer term. The Board will continue ‘NO-DEAL’ TERMS ON MULTIPLE the whole of the UK and indeed maintain and improve the Port of Dover our diligent monitoring of the situation. Ireland as we continue working with in a way that sustainably delivers for the OCCASIONS DURING 2019. our French sister ports and ferry long-term. We will continue the work operator partners during this key started with our employees, customers Richard Everitt transition year. and other stakeholders to develop our Chairman 8 | STRATEGIC REPORT STRATEGIC REPORT | 9 STRATEGIC REPORT Chief Executive’s Statement IT HAS BEEN A WATERSHED YEAR FOR THE PORT OF DOVER …THE IMPORTANCE OF DOVER TO AND ITS FUTURE IN SEVERAL WAYS. TRADE FOR ALL REGIONS OF THE UK HAS BEEN HIGHLIGHTED AS HAS THE KEEPING UK TRADE CONNECTED SUPERIOR RESILIENCE OF ITS Following the EU referendum, we had invested considerable energy in OPERATION FOR ALL SUPPLY CHAINS communicating and planning for the potential challenges of the UK’s departure from the EU. By 2019, together with our French sister ports and ferry operator partners, we were prepared, on three different occasions in fact, for a possible no-deal outcome. Much behind-the-scenes cross-Whitehall work had led to securing the practical arrangements that would enable Dover, indeed all EU-facing gateways, to be prepared and able to handle all of the goods it does now for the UK after Brexit in a way that was focused on keeping traffic flowing. The designation for the movement of protected animals and plants in September provided the final piece in the jigsaw for UK Brexit border arrangements, meaning that the Port of Dover would maintain its status as an approved point of entry to the UK for all goods originating in the EU. Meanwhile, a new ‘no deal’ Brexit customs system at Calais was successfully tested on the route and ferry operators adapted their IT systems, demonstrating the close working that has taken place by all partners operating this critical cross-Channel trade route. To highlight our readiness, we launched a positive preparedness campaign during London International Shipping Week. The two- month campaign, including national media, industry events and party conference appearances, culminated in the then Government