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Glasgow Prestwick International Airport –Trading Update

15 Mar 2004

Infratil advises that as a result of poorer than expected recent trading conditions and the decision to make greater provision for one-off items, the earnings before interest, taxes and depreciation (EBITDA) for Glasgow Prestwick Holdings Limited for the year ended 31 March 2004 will be materially below expectations.

Infratil now expects EBITDA for the year ended 31 March 2004 to be approximately (GBP) ₤4.5 million, being 10% below the comparable figure for the year ended 31 March 2003.

The contributing factors are:

    • Lower freight volumes: Freight volumes have been more volatile than scheduled passenger services so, over the medium term, fluctuations are expected. None-the-less, freight volumes for January and February were 14% below those for the same period of the previous year and also have been below forecast. This is expected to carry through into March.
    • Lower passenger numbers: The last two months of winter have shown a softening in passenger loads. While year on year growth is still strong (+46% for the three months ended February), recent months have been below expectation.
    • Retail and trading: The significant traffic growth over recent months has contributed to a decline in per passenger concession income of 10% for the three months ended February 2004, compared to the same period last year. Measures to expand retail facilities are underway. They will not, however, be in place prior to 31 March 2004. Car parking income per passenger has been impacted by off airport competition. Measures are in hand to mitigate this going forward.
    • Higher operating costs: The concentration of new flights in certain peak periods has resulted in higher incremental costs than long run averages. Operating costs have been higher for passenger handling and security in particular.
  • One-off adjustments: Glasgow Prestwick expects to make a number of one-off charges of approximately (GBP) ₤200,000. These will include a provision for bad debts relating to amounts owed by two airport tenants that have gone into liquidation and a reclassification of capital expenditure as tax-deductible operating expense.

This result has implications for the conditional proposal that Infratil acquire the outstanding shares in Glasgow Prestwick Holdings from Utilico Investment Trust. This matter is due for consideration by shareholders at a special meeting to be held on 24 March 2004.

The independent Directors of Infratil are considering the value implications of the recent results on this proposal and will advise shareholders further later this week.

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