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 particular port, on a long-term basis. 

Port facilities, freight forwarding and cargo handling services are also provided in Dublin 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 and the Manchester Ship Canal container vessel service, 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, Liverpool2 and the Royal Seaforth Container Terminal (“RSCT”). 

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 meters, 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.  Three new ‘Ship to Shore’ cranes have been ordered and are due to be commissioned for operation in 2020.

RSCT was the Port of Liverpool’s existing 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. 

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 recently 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/

Marine Support Services

The Group’s Marine Support Services division provides a range of marine services, including ship repair and marine engineering, to ship owners and operators.

Cammell Laird’s Birkenhead site covers 130 acres and includes four dry docks. The company specialises in military ship refits, commercial ship repairs, upgrades and conversion and shipbuilding. Cammell Laird is also active in the industrial services and energy sectors.

https://www.clbh.co.uk/

A&P Group is a leading engineering services and fabrication group, providing ship repair, ship conversion and marine services and specialising in the global marine and energy sectors.  A&P Group operates from three sites across the UK, in the North East (Tyne and Tees) and South West (Falmouth).

http://www.ap-group.co.uk/

 

Financial Review: Year Ended 31 March 2018

A summary of some of the notable milestones in the year ended 31 March 2018 and beyond is shown below:

In FY18, Peel Ports reported revenues of £717m (2017: £644m) and EBITDA of £239m (2017: £226m). The Group’s EBITDA has increased annually since 2009, including during the last general economic downturn and more latterly changes in the coal market, demonstrating its resilience in challenging times.

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

In the year ended 31 March 2018, net investment in capital expenditure totalled £71.7m (2017: £106.8m). This included commissioning costs for the Liverpool2 in-river deep-water container terminal at the Port of Liverpool and the construction of a new linkspan and pontoon at Heysham Port. At the Port of Sheerness, the Group has continued its development of car storage facilities following the lease of the former Thamesteel site last year. In Scotland, projects are underway to develop Ardrossan Harbour and transition Hunterston Port. At Great Yarmouth, investment has continued in enhancing the port’s infrastructure for the provision of offshore wind farm support services.

Capital & Funding Structure

Equity Investors

The current shareholders of Peel Ports are Peel Group (50.1%) and DWS Investments (formerly known as Deutsche Asset & Wealth Management) (49.9%).

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 such as the Trafford Centre and Liverpool Airport. 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

The businesses operate through the following corporate structure: