89DG.L Regulatory News (89DG)

NATS Holdings Limited - Results for the year ended 31 March 2019

28 June 2019

NATS Holdings Limited (NATS) today announced its results for the year ended 31 March 2019.

Notes

1. Excludes derivative financial instruments.

2. Ratio of the net debt (as defined by NERL's Licence) to regulatory assets of the economically regulated business.

3. Paid in financial year. In May 2019 the company paid an interim dividend for the year ending 31 March 2019 of £30.0m.

4. An Airprox is a situation in which, in the opinion of a pilot or a controller, the distance between aircraft as well as their relative positions and speed have been such that the safety of the aircraft involved was or may have been compromised.

CEO, Martin Rolfe said:

"This was an excellent year for service performance with the delivery of a safe and resilient ATC service, every day, against a backdrop of growing traffic and while introducing complex new technology into our terminal control operation.

"We safely handled 2.54 million flights in the year, which was a record volume for the UK, and represented just under 25% of all flights in Europe. While doing this, we completed the deployment of electronic flight strips, a major new electronic system which replaced a paper system. This followed a complex transition plan that we developed with airlines and airports to minimise the impact on their operations, and we received very positive feedback on the manner and timing of this deployment.

"Our average delay per flight (for the 2018 calendar year) was 12.5 seconds, and included 4.8 seconds of delay specifically associated with this transition. In spite of this our performance was five times better than the average delays experienced elsewhere across Europe.

"Our objective is to continue to deliver one of the best levels of service performance in Europe and during the year we submitted a plan to CAA for the next five years (Reference Period 3 or RP3) which we believe would achieve this. We are currently engaging with CAA on its proposals for RP3 and we expect to see their final plan later this summer.

"We also made good progress in developing the infrastructure that will support London City Airport's future digital tower service and we have started to use space-based surveillance to monitor flights across the North Atlantic, which is the first oceanic region to have the ability to do so.

"The group reported a profit before tax of £98.2m (2018: £132.8m) which was £34.6m less than the prior year. This mainly reflected real price reductions to our en route customers, and investment in additional staff to meet the growth in air traffic volumes and to progress our technology change and airspace programmes."

Chairman, Dr. Paul Golby said:

"The Government's Aviation Green Paper sets out an ambitious plan for the future of UK aviation. Published alongside this was our technical feasibility study into airspace modernisation in the South of England recognising the importance of airspace change and our role in delivering it. We have been commissioned by the Department for Transport and the CAA to create and maintain a strategic masterplan of airspace change out to 2040 and to create the Airspace Change Organising Group to lead this change programme. This group comprising individuals from NATS, airports and airlines, will design and manage a collaborative programme which will deliver airspace change, delivering further capacity for those wishing to fly, mitigating noise impacts on overflown communities and reducing CO2 emissions from aviation.

"Last summer we consulted customers on our plan for RP3 to deliver a safe, high quality and resilient service 24/7 with higher traffic and at lower prices than in RP2, including our role in the modernisation of UK airspace and upgrading our air traffic management service. These will be enabled by the completion of the largest and most complex technology upgrade that we or any of our European counterparts have previously undertaken. These aims were shared across our industry and were strongly supported during our consultation with customers.

"The CAA has published its draft proposals for the UK's National Performance Plan for RP3. In our response to the CAA we have provided constructive input on how to achieve the strategic objectives the aviation industry requires while continuing to deliver excellent service performance which is amongst the most cost efficient in Europe."

ENDS

Note to editors

· The accounts of NATS Holdings Limited and its subsidiaries were approved by the Board on 27 June 2019 and are subject to formal adoption by shareholders at the Annual General Meeting to be held on 25 July 2019. 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, 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) within the framework of the European Commission (EC) Single European Sky (SES) and operates under licence from the Secretary of State for Transport. NERL reported a profit before tax of £86.0m (2018: £134.2m).

· 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 (since April 2019) 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 profit before tax of £14.5m (2018: £2.5m).

About NATS

NATS is a leading air traffic management and solutions company, established in the UK in 1962 and now operating in countries around the world.

NATS handled 2.6 million flights in 2018, covering the UK and eastern North Atlantic from its centres at Swanwick, Hampshire and Prestwick, Ayrshire. NATS also provides air traffic services at 14 UK airports; at Gibraltar Airport and, in a joint venture with Ferrovial, at a number of airport towers in Spain.

Building on its reputation for operational excellence and innovation, NATS offers aerodrome, data, engineering, capacity, efficiency and environmental performance solutions to customers worldwide, including airports, airlines air traffic service providers and Governments.

For more information For more information contact the NATS Press Office on 01489 615945, email press.office@nats.co.uk, tweet @NATS or visit the NATS website at www.nats.aero