Latest news :: Alpha Airports Group Plc

Latest news :: Alpha Airports Group Plc: INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 JULY 2006
28th September 2006

Alpha Airports Group Plc ("Alpha" or the "Group") is a leading aviation support services company, providing retailing and catering services to over 100 airlines and 83 airports in 15 countries around the world.

Financial Highlights

H1 2006/07 H1 2005/06 Change Full Year 2005/06
Revenue £278.9m £268.8m +3.8% £550.9m
Adjusted Profit before tax * £8.3m £6.2m +33.9% £18.5m
Profit before tax £4.2m £6.2m (32.3%) £18.4m
Basic earnings per share 1.32p 1.65p (20.0%) 5.74p
Proposed dividend per share 1.0p 1.0p 0% 3.2p
* Stated before exceptional items and including the post-tax results of associates and joint ventures.


Operational Highlights



Airline Services: sales up 3.1% to £151.4m; operating profit before exceptional items up 63.9% to £5.9m


UK operations benefit from continued growth of low cost carriers
New contract with British Airways to provide catering bond services at Gatwick
Australia operation back in profit



Airport Services: sales up 4.6% to £127.5m; operating profit before exceptional items up 8.3% to £3.9m


Higher spend per head at UK airports offsets fewer transactions
International revenues boosted by new retail openings in Italy and Romania



Strategic review ongoing


Emphasis on leveraging scale either with existing assets or through acquisition
Focus on innovation: pioneering new products and services



Ten-year £800m contract signed with Manchester Airport (see separate announcement)


Commenting on the results, Peter Williams, Chairman & Chief Executive, said:

"Against a difficult trading backdrop and the distraction of internal events, these are encouraging results.

"We operate in highly competitive markets and to succeed we must focus on improving our performance through a combination of innovation and building scale.

"The second half of the year remains a challenge but we are confident that the full year results will subject to the current security concerns, be in line with our expectations."

Enquiries: Alpha Airports Group Plc
Peter Williams, Chairman & Chief Executive
Tim Redburn, Finance Director 020 8580 3200
www.alpha-group.com
College Hill
Kate Pope/Mark Garraway 020 7457 2020


Chairman's Statement

Group Results

Overall revenue for the six months ended 31 July 2006 increased by 3.8% to £278.9m (2005/06: £268.8m) with small increases in all of the Group’s business and geographic segments.

As expected, the Group’s trading performance showed a significant improvement in the period with profit before tax and exceptional items increasing by 33.9% to £8.3m (2005/06: £6.2m).

Exceptional costs of £4.1m (2005/06: nil) in the first six months were mainly related to the events earlier this year, that led to the share suspension and subsequent investigation (£2.7m), and redundancies (£1.1m) that took place as part of a restructuring of Airport Services early in the period.

Net interest costs increased to £1.8m (2005/06: £1.3m) reflecting higher borrowings during the period as compared with the first six months of the previous financial year as a result of capital expenditure and additional payments to the Group’s pension scheme.

The UK tax charge in the first half has been reduced by £1.5m in respect of recoveries of overpaid tax in prior years. The tax charge in the second half of the financial year is expected to be similar to last year at around 27%.

Basic earnings per share, before exceptional items, were 2.98p (2005/06: 1.65p).

Net Debt and Cash Flow

Net debt at 31 July 2006 was £38.7m compared to £37.1m at 31 January 2006. During the period, capital expenditure amounted to £10.7m against depreciation of £6.2m. Major investment projects included completion of the Airport Services management information system.

Other significant cash movements included the pension payment (£3.8m) referred to below.

Dividend and Dividend Policy

The Board has approved an interim dividend of 1.0p (2005/06: 1.0p) to be paid on 30 November 2006 to shareholders on the register at the close of business on 3 November 2006.

The Board has reviewed its future dividend policy. Whilst it is intended to retain flexibility regarding future events, the Board recognises the need to balance dividend payments with medium-term free cash flow generation and to maintain a level of dividend cover consistent with a progressive dividend policy. It is therefore the Board’s intention that the Group will maintain a dividend cover of not less than 2 times pre-exceptional earnings; this policy will apply from, and including, the year ending 31 January 2007.

Pensions

As previously reported, Alpha and the Trustees of the Alpha Airports Group Pension and Life Assurance Plan (the "Scheme") agreed that the final salary scheme would change to a career average scheme with effect from 6 April 2006. These changes have been made to help address the deficit on the Scheme. The Group also increased its ongoing contributions by 0.9% to 11.3% of pensionable salaries, made a payment of £3.8m and has agreed to make further payments of £3.0m per annum to fund the past service deficit. The cash cost in the current financial year will be approximately £6.0m.

During the period the Group recognised an actuarial gain on the Scheme of £4.0m before tax in the statement of recognised income and expense.