3rd Dec 2009 07:00
The Go-Ahead Group plc ("Go-Ahead" or the "Group")
Go-Ahead to sell the majority of its aviation ground handling and cargo operations
Go-Ahead is pleased to announce that it has exchanged contracts to sell the majority of its aviation ground handling and cargo operations.
The sale consists of separate agreements under which most of the Group's ground handling and cargo operations at Heathrow will be sold to Dnata and most of the Group's ground handling operations outside Heathrow will be sold to Servisair UK Limited ("Servisair"). Completion for both agreements is expected at the end of January 2010, subject to contract.
Keith Ludeman, Group Chief Executive of Go-Ahead, said: "We are pleased to be selling these operations to two highly respected companies whose core businesses include aviation ground handling and cargo. We will be spending the next two months working closely with Dnata, Servisair and our customers and employees to maintain a high quality of service and ensure a smooth transition at the end of January. This announcement marks another important step in delivering the Group's strategy which focuses on growing our core bus and rail operations."
Dnata agreementDnata will acquire 100% of the issued share capital of Plane Handling Ltd, consisting of cargo operations at Heathrow and Manchester and ground handling operations at Heathrow Terminal 3. In addition, it will acquire the passenger and ground handling assets and employees of aviance at Heathrow Terminals 3 and 4. The total cash consideration is £15m, assuming no net debt and normal levels of working capital and is payable by Dnata on completion.
Servisair agreementUnder this asset sale agreement by aviance, Servisair will acquire the ground handling operations at 11 UK airports (Aberdeen, Belfast International, Belfast Harbour, Birmingham International, Cardiff, Edinburgh, Glasgow, Luton, Manchester, Southampton and Stansted), the aviance passenger lounge operation at Gatwick and the aviance cargo operations at Stansted for a nominal upfront cash consideration.
Retained aviation services division activitiesGo-Ahead will retain responsibility for a small number of activities at Heathrow, primarily to support remaining ground handling contracts at Terminal 1 into the first half of 2011. The expected losses from these activities will be provided for as at 31 December 2009 as part of the transaction.
Go-Ahead will also continue to operate its Meteor parking business which is not affected by the above transactions.
Financial impact on the aviation services division of Go-AheadAt this stage, the above transactions are expected to be broadly cash neutral, with proceeds of £15m offset by the estimated cost of residual liabilities, future losses under the retained ground handling activities at Heathrow and other transaction costs. All of these costs will be provided for in the first half of this financial year, resulting in £Nil net proceeds compared to a carrying value of approximately £20m for the ground handling and cargo operations. On this basis, we will recognise an exceptional loss on sale of approximately £20m in the first half of this financial year relating to the above transactions.
In addition, we expect to recognise an exceptional, non cash impairment charge relating to the Meteor parking operations of approximately £15m in the first half of this year, writing down the carrying value of these operations to £Nil following a strategic review of the business.
As a result of the above, the operating profit for this division (before amortisation and exceptional items) for this financial year to June 2010 is expected to be close to breakeven, compared to a loss of £4.5m last year.
Ends
For further information, please contact:
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The Go-Ahead GroupJim Boyd, Group Corporate Affairs Director Catherine Garland, Group Communications & Investor Relations Manager |
020 7821 3927 020 7821 3929 |
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Citigate Dewe Rogerson Michael Berkeley, Chris Barrie, Angharad Couch |
020 7638 9571 |
Notes to editors
Dnata Dnata was established in 1959 and celebrates its 50th anniversary this year. It is the ground and passenger handling agent at Dubai International Airport and the operator of the Dubai air cargo terminal. Dnata has since extended its operations internationally. It currently provides ground handling services at 17 airports in seven countries including Singapore, Switzerland, Philippines, Australia, Pakistan and China. For further information visit www.dnata.com
ServisairServisair is a leading global provider of aviation ground services delivering an integrated range of handling solutions across 128 locations. Servisair's team of 15,000 dedicated employees work around the clock to look after the needs of 700 customers, handling 1.1 million aircraft movements, 81 million passengers and 900,000 tonnes of cargo per year. Servisair forms part of the Derichebourg Group.For further information visit www.servisair.com
Go-Ahead Go-Ahead is a leading UK public transport operator, providing high quality services in the bus and rail sectors. Employing around 27,000 people across the country, almost one billion passenger journeys are undertaken on our services each year. We are committed to operating our companies in a socially and environmentally responsible way and are proud to have been awarded the Carbon Trust Standard after taking action on climate change. In addition to the travelling public, our customers include the Department for Transport, Transport for London (TfL) and local authorities.
Bus Go-Ahead is one of the UK's largest bus operators. With a fleet of over 3,500 buses, we carry, on average, around 1.6 million passengers every day. Our operations are focused on high density commuter markets. We have a strong presence in London, with around 21% market share, where we provide regulated services for TfL. We operate deregulated services in the north east, Oxford, the south east and southern England. We recently expanded our UK bus operations with the acquisition of Plymouth CityBus.
Rail The rail operation, Govia, is 65% owned by Go-Ahead and 35% by Keolis. It is the busiest rail operation in the UK, responsible for nearly 30% of all UK passenger rail journeys through its three rail franchises: Southern (which includes the Gatwick Express), Southeastern and London Midland. On 13 December 2009, Southeastern will launch the UK's first high speed domestic rail service between Kent and London, significantly reducing current journey times. Southeastern is currently running preview services.
Aviation Services The Group also provides car parking services through Meteor, which includes the 'Meet & Greet' and 'Pink Elephant' brands and operates limited ground handling services at Terminal 1, Heathrow.
For further information visit www.go-ahead.com
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