NATS Holdings Limited - Results for the year ended 31 March 2020
23 October 2020
NATS Holdings Limited (NATS) today announced its results
for the year ended 31 March 2020.
|
Financial year ended 31 March
|
2020
|
2019
|
|
Financial highlights:
|
|
|
|
Revenue - £m
|
892.1
|
885.7
|
|
Profit before tax1 - £m
|
25.3
|
98.2
|
|
Capital expenditure - £m
|
158.5
|
156.5
|
|
Net debt2 - £m
|
170.7
|
73.9
|
|
Gearing3 - (%)
|
29.0%
|
25.7%
|
|
Dividends4 - £m
|
59.0
|
59.0
|
|
Operational highlights:
|
|
|
|
Flights handled (millions)
|
2.48
|
2.54
|
|
Safety: risk-bearing Airprox5 (attributable to NATS)
|
1
|
1
|
|
Delay seconds per flight (en route delay attributable to NATS for calendar years 2019 and 2018)
|
8.4
|
12.5
|
|
Enabled cumulative % reduction in CO2 emissions (average per flight against a 2006 baseline)
|
7.0%
|
6.9%
|
Notes
1.
Profit before tax for the year ended 31 March 2020 is after a goodwill impairment charge of £49.0m (2019: nil)
2. Excludes derivative financial instruments.
3. Ratio of net debt (as defined by NERL's Licence) to regulatory assets of the economically regulated business.
4.
Paid in financial year.
5. An Airprox is a situation in which the safety of the aircraft was or may have been compromised in the opinion of a pilot or a controller. Data for 2019 is restated following an assessment by the UK Airprox Board in 2020.
2019/2020 financial year
key points
NATS handled 2.48m flights (2019: 2.54m).
S
ervice performance improved on the prior year and met the
2019
regulatory targets
for safety, delay and
environmental
flight efficiency.
The year-on-year profit reductionreflected our assessment of the
likely
impact of Covid-19 on the value of assets and investments
.
NATS'
Board rejected the Civil Aviation Authority's (CAA) p
lan
for Reference Period 3 (RP3: 2020-2024) leading to a referral to the Competition and Markets Authority (CMA). The CMA's findings
were balanced but largely
overtaken by the impacts of Covid-19 on
the sector. The CAA will
now
need to re
set
the
RP3
price control
bythe start of 2023
.
The Government confirmed that after the Brexit transition period, NERL's economic and safety regulation will be determined
solely
by the CAA, including the revised
price control
for the final years of RP3.
In conjunction with the CAA and the Department for Transport, we established the Airspace Change Organising Group to coordinate airspace modernisation
for
the industry.
We introduced
space-based surveillance
into our North Atlantic service to
improv
e
safety, flight efficiency and
reduce
emissions.
The MOD renewed its military area radar contract to 2030 and the Aberdeen Glasgow and Southampton airports group extended its ATC contract to 2029.
Covid-19 significantly reduced traffic levels from March 2020.
Our response was to protect staff
, maintain
a safe operation
,
control expenditure
and
manag
e
liquidity. In August 2020, we secured an additional 380m bank facility.
CEO, Martin Rolfe said:
"The year was good in terms of the quality of our service provision. We also progressed a number of major strategic projects designed to deliver the ATC capability UK aviation required for the future. However, as the year closed the impact of the Covid-19 pandemic was becoming more apparent. We adapted to this rapidly and have positioned ourselves well to manage the challenge to both us and our customers.
"The UK Airprox Board determined that one airprox
was attributable
to NATS for the 2019/20 financial year. We carried out thorough investigations to ensure causal factors were identified and
changes
implemented to address them. This process was reviewed by our Board and its Safety Review Committee.
"The need for the CMA referral was disappointing for all parties. While circumstances for the industry subsequently changed, their findings still provide some principles to guide the CAA's review of RP3 that will take place considering the impact of Covid-19."
"The
immediate and steep reduction in air traffic volume from March 2020 impactedthe entire aviation industryto a degree never seen before.
"Our focus has been to
ensure we can
continue providing a safe service and are well positioned to supportthe future recovery of the sector.
Our
short-term priorities included protecting employees, securing additional funding
and
temporarily
suspending our capital investment programme
. We have also
start
ed
re-sizing the business
,
in anticipation of sustained lower
demand
, through a voluntary redundancy programme from which we anticipate in the region of 400 colleagues will leave the business by the end of the calendar year."
"The resilience and adaptability of our people has been exceptional.
We
are well
advanced
in permanently adopting some of the innovation we have seen
.
I am grateful and very proud of everythingthe team has achieved in
such difficult
circumstances."
Chairman, Dr. Paul Golby said:
"No previous demand shock, including 9/11, volcanic ash, the global
financial crisis and Gulf wars, has posed such a significant threat and level of uncertainty to NATS' business.
The Board has challenged and
supported
management
in responding rapidly to protect the company's staff,
operation, cash conservation and funding
."
"While the timing, rate and extent of that recovery remains uncertain, the Board expects the regulatory framework underpinned by
the requirements of
the Transport Act 2000 will ensure that the company is able to finance its licensed activities.
This confidence was reinforced by our lenders agreeing an additional bank facility through to 2022."
Notes to Editors
·
The accounts of NATS Holdings Limited and its subsidiaries were approved by the Board on 22 October 2020 and are available from
https://www.nats.aero/news/annual-report-accounts-2020/
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 (in Liquidation), 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) and operates under licence from the Secretary of State for Transport. NERL reported a profit before tax of £28.9m (2019: £86.0m).
·
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 six 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 loss before tax of £5.5m (2019: £14.5m profit)
For more information contact the NATS Press Office on 01489 615945 /
press.office@nats.co.uk
