AAP Alpha Airports

RNS Number:8729H
Alpha Airports Group PLC
27 January 2005


                                                                 27 January 2005



                          ALPHA AIRPORTS GROUP PLC

                              TRADING UPDATE

Alpha Airports Group Plc, the UK's leading provider of catering and retailing
services for airlines and airports, is today providing an update on trading
ahead of its close period. Alpha plans to announce results for the 52 weeks
ended 31 January 2005 on 31 March 2005.

As indicated in our Interim Statement in September and our contracts update in
November, Alpha has been pursuing a significant number of business expansion
initiatives, which has required increased revenue and capital investment in new
projects, resulting in additional costs to fund these growth opportunities in
the short term. Whilst we are pleased to have secured some important contract
wins in the period, our Flight Services' projects in Australia and Holland have
incurred higher than anticipated costs in the second half of the year. We
therefore expect that Alpha's underlying 2004/5 profit will be some #2.5 million
below current market expectations.

In Australia we have incurred higher than expected start-up and operating losses
at our newly commissioned Brisbane, Sydney and Melbourne flight kitchens. As a
result of current low capacity utilisation levels, losses will continue to be
incurred until we secure additional business in 2005/6 and beyond. We remain
confident that we will win new airline customers for these high quality flight
kitchens.

Following significant contract changes announced early in 2004, Alpha's Holland
Flight Services business has undergone substantial change. We have incurred
greater than expected short-term operating losses, and have therefore
implemented a redundancy programme at an exceptional cost of #1.6 million. We
have also prudently provided some #4 million as an exceptional impairment
provision against the value of fixed assets.

Elsewhere in the Group trading has been satisfactory. Our Retail businesses have
continued to perform very well, and have experienced further strong growth, with
like-for-like annual sales up over 11%. We had been expecting a tough year in
our UK Flight Services business given the loss of the Air Canada contract from
August at London Heathrow. However, with the American Airlines contract win
announced in November, the launch of our innovative Blue Sky meal service with
MyTravel Airways, and our new contract win with Excel Airways at London Gatwick
and across the UK, we end the year with a strong recovery in progress. Our
Flight Services business in Jordan also had a good recovery year, and our
European Inflight Retail business also continued to grow strongly, with sales up
over 20% in the year.

For the new financial year 2005/6, the Asian Tsunami will continue to have a
negative effect on our Sri Lankan and Maldivian retail businesses; it is still
too early to predict the short-term timing or scale of what is an assured
eventual tourism recovery. We have had a tremendous response from our staff and
duty-free industry colleagues, and have so far raised over #100,000 for the
Alpha Sri Lanka Tsunami Relief Fund.

The current year's expanded investment in development projects, whilst incurring
costs in the short-term, is underwriting the significant growth that we are
anticipating in the new financial year, 2005/6. However, due to ongoing losses
in the newly commissioned Australian flight kitchens and the potential impact of
the Tsunami disaster, the Board has reduced its expectations for the Group's
results for the new financial year 2005/6 by around #2 million.


Enquiries:

ALPHA Airports Group Plc
Kevin Abbott, Chief Executive                     Tel: 020 8580 3200
Heather McRae, Finance Director                   Tel: 020 8580 3200

Gavin Anderson & Company                          Tel: 020 7554 1400
Laura Hickman


www.alpha-group.com


                      This information is provided by RNS
            The company news service from the London Stock Exchange

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