Investor relations

Peel Ports Group

Peel Ports Group is the second largest port group in the UK, handling over 60 million tonnes of cargo per year and welcoming 13% of the UK’s total port traffic through its waters.

Overview

The Group has three business segments - Ports, Shipping and Marine Support Services operating from the following locations:

Ports

Peel Ports Group Limited and its subsidiaries (“the Group”) operate as the Statutory Harbour Authority for the Port of Liverpool, the Manchester Ship Canal, the River Medway, parts of the area along and around the River Clyde, Ardrossan Harbour, Twelve Quays at Birkenhead Docks and Heysham Port.

In addition, the Group operates Great Yarmouth Port as an agent of Great Yarmouth Port Authority, the Statutory Harbour Authority for that port, on a long-term basis. 

Container facilities, freight forwarding and cargo handling services are also provided at Dublin Port under concession. 

The Group’s assets form a strategic hub centred on the Irish Sea, with locations in Liverpool, Dublin, Glasgow and along the Manchester Ship Canal. Linked by the Group’s short sea shipping services, the Group’s assets provide direct access to the significant hinterland of North West England and the main RoRo services to Ireland. Additionally, the Port of Sheerness provides access to London and Clydeport to Central Scotland. Great Yarmouth, as an offshore supply base, is strategically located close to the oil, gas and windfarm installations in the Southern North Sea.

In addition to providing landlord services to the many leading businesses that operate from the Group’s port facilities, the Group also offers a value-added logistics solution to a customer’s supply chain. This includes conservancy, pilotage, berthing, facilities rental, storage, cargo handling, marine services and shipping.

The Group handles a diverse range of cargos including bulk liquids, bulk solids, automotive, energy, agribulks and containers.

The Group’s container handling offering is centred on the Port of Liverpool, which operates two container terminals, the Royal Seaforth Container Terminal (“RSCT”) and Liverpool2.

RSCT was the Port of Liverpool’s first container terminal. It has direct deep-sea and short-sea connections to a range of countries, including the USA, Canada, Spain, Italy, Portugal, Cyprus and Turkey, in addition to a number of feeder services connecting Liverpool with the Far East, India, Africa and South America. 

Liverpool2 is a new in-river deep-water container terminal capable of accommodating the world’s largest container vessels with smaller post-Panamax vessels the most likely primary users of the terminal. 

The first phase of the construction of Liverpool2 saw approximately £300m invested, in addition to further investment in the port infrastructure at Liverpool.  This was part financed by a £150m loan secured from the European Investment Bank and a Regional Growth Fund grant of £35m as a contribution to the cost of dredging the approach channel to the Mersey Estuary. By deepening the approach channel of the Mersey to 16 metres, it allows access for the post-Panamax vessels as well as widening the tidal access window for a range of other users of the port.

The second phase of the project will further increase the capacity of Liverpool2 and has an estimated cost of £50m, which in the main represents investment in additional quayside and landside cranes, together with some related infrastructure works. The infrastructure works were completed in December 2020 and the remaining cranes are scheduled for delivery in early 2021.  Following a period of commissioning, Phase 2 is expected to be operational by late summer 2021. 

In January 2020, the Group entered into a joint venture agreement with Terminal Investment Limited S.A.R.L. in respect of the cargo handling operations of the Liverpool2 deep-water container terminal at the Port of Liverpool. The arrangement is intended to enable the business to achieve its ambitious growth plans for Liverpool2. 

The Group’s two main terminals in Liverpool are complemented by facilities at Greenock in Scotland, Dublin in Ireland and at inland ports along the Manchester Ship Canal.

The combination of the Liverpool2 terminal with the Group’s existing port assets and short sea shipping services in the Irish Sea, the Continent and along the Manchester Ship Canal is expected to provide significant advantages to shipping lines, importers and exporters. It is estimated, for example, that 35 million consumers live within a radius of 150 miles of the Port of Liverpool.

Shipping

The Group’s port operations are complemented by a shipping line, providing short sea container services between the UK, Ireland and mainland Europe and feeder services between the UK and Ireland. Operating as BG Freight Line, based in Rotterdam, the segment has taken delivery of four new purpose-built vessels designed specifically to meet the needs of customers. In addition to these seven-year charters, the segment also charters other vessels on a short-term basis as required to meet demand.

http://bgfreightline.com/

Financial Review: Year ended 31 March 2020

A summary of some of the notable milestones in the year ended 31 March 2020 and beyond is shown below:

In FY20, Peel Ports reported revenues of £792m (2019: £760m) and EBITDA of £279m (2019: £266m). The Group’s EBITDA has increased annually for the last 10 years, including during the last general economic downturn and more latterly changes in the coal market and Brexit uncertainty, demonstrating its resilience in challenging times.

This growth is underpinned by strong customer ties, diversity of cargo types and shareholders’ commitment to capital investment and improving efficiency.

 

In the year ended 31 March 2019, net investment in capital expenditure totalled £99.5m (2018: £71.7m). This included ancillary works in respect of Phase 1 of the construction of the Liverpool2 in-river deep-water container terminal at the Port of Liverpool as well as construction costs in relation to Phase2.

Following the Group-wide arrangement entered into with ADM Arkady in 2018, the Group has also extended its Animal Feed Storage facility at the Port of Liverpool.

At the Port of Sheerness, the Group has continued its development of the former steelworks site at Wellmarsh, creating additional car storage capacity. Two new cranes have been purchased at the Ports of Sheerness and Great Yarmouth to improve handling capabilities for timber and grain operations and place less reliance on third party crane hire.

At Great Yarmouth, investment has continued in enhancing the port’s infrastructure for the provision of offshore wind farm support services.

In Scotland, projects are underway to develop Ardrossan Harbour and transition Hunterston Port. The Group has taken the decision to invest in an ERP system, which is being implemented on a phased release basis over the next two years.

In the year ended 31 March 2020, net investment in capital expenditure totalled £124.2m (2018: £99.5m). This included further investment in Liverpool2 and a new double deck ramp at the Twelve Quays RoRo facility in Birkenhead. There has also been investment in the infrastructure at Heysham Port. At the Port of Sheerness, the second stage of development of Wellmarsh, the former Thamesteel site, is underway. In Scotland, projects to develop Ardrossan Harbour and transition Hunterston Port are continuing while there has also been investment in enhancing the infrastructure at King George V dock and the Greenock Ocean Cruise Terminal in Glasgow. At Great Yarmouth, investment has been made in plant and machinery to improve the efficiency of operations. 

Capital & Funding Structure

Equity Investors

As at 31 March 2020, the shareholders of Peel Ports were Peel Group and DWS Investments (formerly known as Deutsche Asset & Wealth Management).

On 23 July 2020, AS INFRA PP PTY LTD, acting on behalf of Australian Super, acquired a 25% shareholding in Peel Ports Group Limited’s immediate parent company, Peel Ports Holdings (CI) Limited.

Following the transaction, the shareholders of Peel Ports are Peel Group (37.6%), DWS Investments (37.4%) and AS INFRA PP PTY LTD (25%).

Finance Investors

In December 2012, the Group established its investment grade secured corporate debt programme, which was structured to enable access on a pari passu basis to bank debt, public bonds and private placement notes. The facilities were provided by an international banking syndicate and institutional investors in the US private placement market.  Since December 2012, the Group has refinanced bank debt in excess of £1bn, as well as raising additional debt to support continued investment in the Group’s infrastructure.

Investment Strategy

The Group’s investment proposition is based on the following key attributes:

  • Business and commodity diversity provides resilience
  • Owners take a long term view of their investment in the Group
  • Assets geographically aligned with population/consumption centres
  • Long term relationships with blue chip clients
  • Strong track record of delivery
  • Significant investment in transformational projects
  • Business portfolio well positioned for growth
  • Agile to Brexit risks and opportunities

Corporate Structure

Peel Group is a privately owned conglomerate business with a wide range of interests from property to wind farms and hotels. Peel Ports benefits from the shareholders’ significant experience in investing and managing other key UK real estate and infrastructure assets. Peel Group has a long-standing interest in the ports industry, having initially acquired The Manchester Ship Canal in 1987, Clydeport in 2003 and The Mersey Docks and Harbour Company in 2005.

http://peelgroup.global/

DWS Investments, investing through its Pan-European Infrastructure Fund, is part of Deutsche Bank AG, with more than €2 billion of assets under management.  DWS Investments is an experienced investor owning significant interests in core infrastructure assets in the energy, utility and transport sectors across Europe.  DWS Investments is one of the largest asset managers in the world with more than 20 years of continuous portfolio management expertise.          

https://institutional.dws.com/globalInvestment/infrastructure.jsp

 

AustralianSuper is an industry fund run for the benefit of its members. The largest superannuation fund in Australia, it manages the retirement savings of one of in ten working Australians. 

 

https://www.australiansuper.com/

The businesses operate through the following corporate structure: