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Print1:00 am, December 17, 2008
MAG scraps sale of Humberside Airport
Manchester Airports Group (MAG) has failed to find a buyer for its stake in Humberside Airport.
MAG put its 82.7 per cent shareholding up for sale in April and said it has since had talks with “a number of potential purchasers”.
In a statement, MAG said: “Given several positive developments recently at Humberside Airport and the current economic climate, retaining its majority stake as part of MAG is the correct course of action.
Group chief executive Geoff Muirhead said: "When we began our strategic review, we recognised that Humberside Airport was a solid business and that everyone had done a fantastic job in retaining and attracting airlines as well as maintaining stable passenger numbers, particularly during recent times of significantly increased competition.
"In the last few months, Humberside Airport has attracted an increase in its heliport business, its KLM services continue to perform well, a new state-of-the-art perishables hub has opened and discussions are currently underway about further developments on site.
"Coupled with the backdrop of an economic downturn and the beginnings of a recession in the UK, we have decided not to sell Humberside Airport and will retain it as part of the group. We firmly believe that this decision means that we can develop Humberside Airport further and add value for our shareholders."
MAG paid £10m for its stake in 1999 and has since invested a further £7m on infrastructure improvements. Humberside generated a total of £640,000 of retained profit between 1999 and 2007 but has not paid any dividends.
Its turnover has increased from £6.5m in 1999 to £12m in 2007, but operating profit has slumped from £1.6m in 2004 to £476,000 in the year ended March 31, 2007, the latest for which accounts are available.
The pre-tax loss in 2007 was £622,000 but thanks to a £938,000 tax credit this was turned into a retained profit of £316,000.
Humberside’s prospects have taken a knock since Peel Holdings opened Robin Hood Airport near Doncaster, which is just 28 miles away.
Cllr Mark Kirk, leader of North Lincolnshire Council, that owns the remainder of the airport, said: “This is very good news. I am delighted that MAG is to retain its majority share in the airport. It is a thriving and very much loved local airport. Only recently we announced the new £1.6m perishables cold storage hub that opened last month. This is a huge investment.
"Today's announcement from MAG confirms the confidence it has in the area at a time of economic uncertainty."
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