Shannon Group reports 2% increase in turnover after 'positive year'

Turnover hit €67.2 million in 2016

Shannon Group reports 2% increase in turnover after 'positive year'

Shannon Group CEO Matthew Thomas

THE Shannon Group plc has reported an increase in turnover of over 2% for 2016 after a “positive year of trading”.

The Group – parent company of Shannon Airport, Shannon Commercial Properties and Shannon Heritage – saw turnover hit €67.2 million in 2016, up over 2% on the previous year.

2016, the Group's second full year of trading, saw it record EBITDA – Earnings Before Interest, Taxes, Depreciation and Amortization – of €7.6 million, reflecting a 10% increase on the previous twelve months.

Shannon Group CEO Matthew Thomas said that “a continuation of the company’s improving financial performance is necessary to enable it to undertake critical investments across its business units”.

“The Shannon Group has a unique mix of complementary businesses that, more than any other commercial entity in the region, gives it the potential to positively influence economic development. For example, 16 companies who announced new or expanded operations in 2016 in the Mid-West, which was the fastest growing region outside of Dublin last year, cited the global connectivity at Shannon Airport as a key influencer in their decision to invest here,” he said.

“To realise our full potential as a catalyst for growth in the region we plan to undertake a significant investment programme across our businesses, particularly at Shannon Airport and Shannon Commercial Properties. Our third business unit, Shannon Heritage, manages Ireland’s largest collection of day and night-time visitor attractions and we see very significant opportunity for growth there also, both in terms of increasing visitor numbers at our existing heritage sites and also through expanding our portfolio.”

Chair Rose Hynes said the Group “delivered another solid performance, with progress being achieved across all its business units. Maintaining a strong investment programme and improving the competitiveness of our cost base are key factors in ensuring the Group’s sustainability”.

Last month, the Group confirmed it was introducing a range of cost-cutting measures at Shannon Airport, which will include reducing the status of the airport which will restrict the number of larger airlines transiting through it.

The measures are to allow for a €44 million investment programme over the next five years. Among these projects is the overlay of the airport runway commencing this summer at a cost of €15 million.

The State is loaning more than €10 million to the Airport to aid it in upgrading the runway. The Irish Strategic Investment Fund (ISIF) will loan more than €10 million to Shannon to carry out the work from a €335 million fund following the accrual of the State’s 25 per cent share in Aer Lingus, after the airline’s sale two years ago.

To facilitate the five-year investment programme, it is also reducing the status of the airport to category seven from category nine.

This will limit the number of larger airlines that can fly there.

A spokesperson said: “This and other operational changes will result in a lower employee requirement and, to that end, we are proposing a Voluntary Early Retirement Scheme (“VER”) to employees over the age of 55 years.

“We are also seeking to agree a redeployment programme for a number of business areas.

“We also require a number of measures which are vital to ensure we meet the needs of the business in the most cost effective manner. Among them are roster and shift changes, and work practice changes and efficiencies.

“These savings will bring Shannon’s competitiveness closer in line with accepted international aviation standards and ensure revenues are available to reinvest and drive employment elsewhere on the airport campus,” said the spokesperson.

Financial accounts for Shannon Airport Authority showed that passenger numbers increased from 1.4 million in 2013 to 1.64m in 2014, with turnover increasing from €39.1m to €42.8m, an increase of 9.5%. By 2015, passenger numbers again increased to 1.7 million, with passenger numbers increasing by 22% since the airport left the DAA group.

In 2016, over 1.748 million passengers flew through the airport, the Group said.