Teesside Airport reports £6.6m loss despite Houchen claims of profit
Plus: PD Ports is up for sale
I hope you’ve had a great Christmas. Even if it’s not a good time of year for you, I hope at the very least everybody got some rest, it’s been an exhausting year.
It’s the seasonal hinterland of neither here nor there, but you can anchor yourself to today’s edition of The Teesside Lead, the 19th for those keeping score.
I joked in the last edition that I hoped there would be some news during the Christmas week. It’s generally quite a slow time for news, and press departments are abandoned so it’s difficult to confirm stories or get news lines from the usual places.
However, on Christmas Eve a special news-shaped delivery appeared, in the form of Teesside International Airport’s accounts.
The opaque business structure makes it hard to assess what’s going on there, with upwards of £120m of public money already spent, so annual milestones like this are important to assess whether value for money might ever be achieved.
Teesside International Airport reported a loss of £6.6m in its most recent accounts.
This is in total contradiction to claims made by mayor Ben Houchen - whose Tees Valley Combined Authority (TVCA) owns the airport - who said earlier this year the airport had made its “first profit in a decade”.
Accounts covering the year to 31 March 2024 were published on Christmas Eve and show a total loss for the period of £6,625,147. The previous year’s financial loss was £4.5m.
In August, TVCA and Lord Houchen announced the airport had achieved £308,555 profit via the EBITDA measure - short for “earnings before interest, taxes, depreciation, and amortization.”
EBITDA is a measure of a company’s day-to-day sustainability, rather than of profitability.
In response to a Freedom of Information request last month, TVCA told me it has lent Teesside Airport loans of over £120m, which are still outstanding. Even if EBITDA was a measure of profitability, it would take over 400 years to repay the loans without considering interest.
The most recent accounts also show revenue for the year dropped to £14.9m, down from £15.6m the year before.
Development of a new business park on the south side of the airport’s land is key to its business plan, and the accounts confirm completion of a single warehouse and road were completed in the period covered. The Southside business park is a joint venture with Teesworks developers Chris Musgrave and Martin Corney.
This first phase of development (i.e. that single warehouse) was completed thanks to a loan of £23,083,000 from TVCA, according to the FOI response I received last month.
The next phases of development will be funded by prospective tenants.
The accounts appear to plagiarise text from the previous year’s accounts published by Goosepool 2019 Ltd, the holding company which owns Teesside International Airport Ltd (TIAL),
“The Teesside Airport Foundation is now established and the trustees are continuing to develop the Foundation’s long-term strategy,” says Goosepool’s accounts for 2022-23, “and designing its case for support and its charitable fundraising activities.”
While this year’s accounts for TIAL state: “The Teesside Airport Foundation is now up and running. It is continuing to develop the Foundation’s long-term strategy and designing its case for support and its charitable fundraising activities.”
The accounts also show an increase in debt held by the airport, with a note saying it’s largely owed to holding company, Goosepool 2019 Ltd.
Goosepool 2019 Ltd is 75 percent owned by TVCA, while the remainder is owned by a charity, the Teesside Airport Foundation. This set-up means the airport and its finances, despite being majority-owned by the public, are not subject to FOI legislation, nor to regular public accounts auditing.
According to The Charity Commission, the charity was incorporated in 2021, and in the year to March 2023 had a total income of £8,127, while spending £4,456.
The charity’s page on the airport’s website says that grants of between £500 and £2,000 are available for eligible people across the Tees Valley, but that “More information on how to apply for a grant and eligibility criteria will appear here when applications officially open.”
Asked by the Local Democracy Reporting Service when the airport will actually make a profit, Lord Houchen was less positive than when he made his multiple social media posts declaring a profit in August.
“It’s going to take some time,” he said. “It’s a good step forward but is it now smooth sailing? Of course it’s not, there will be ups and downs. We don’t know whether it’s a false start so we don’t know whether next year we might have a small loss, we don’t know whether we might have a small profit.
“[Ebitda results] was a nice thing to happen, but I’m not overly shouting about it when I usually overly shout about most things that we do because I think you’ve got to take that, over a longer period of time. Any year in isolation is either good or bad. Sometimes when it’s good, that’s great. But actually what you’ve got to look at is over a five or 10-year horizon. So there’s still a lot of work to do on that.
“We’re currently going through a refresh of the business plan for the airport, so we’re bringing together a new five year business plan for the airport, because actually we are five years into the 10 year plan. We’ve achieved a lot out of that plan more quickly than we thought we would… the world’s in a different place post-Covid, the airport is in a different place.”
“We’re five years into a 10 year plan, but actually, what we need to do is re-look at all of that and in effect, completely refresh the next five years, that’ll be happening soon.”
In The Lead’s national title this weekend, all of us editors of the Northern titles look back on 2024 as well as looking forward to the year ahead.
Click through to see my thoughts on an eventful year for Teesside…
Buyers are being sought for PD Ports by its owners, Brookfield.
The Canadian investment giant has sent materials prospecting a sale to selected potential investors to buy up to 50 percent of the port company, which operates Teesport, valuing the company at over £2bn.
PD Ports was previously on the market in 2021 but Brookfields cancelled the sale after legal proceedings were initiated by Ben Houchen’s South Tees Development Corporation - who had been one of the interested parties in buying the port.
The port company was expected to sell at that time for around £1.5bn, but it’s believed Brookfield has added a premium because of the government’s pledges to invest in green technology. Ironically, the adjacent Teesworks site is hoped to become a leading site to these fledgling industries.
After bringing the legal case and taking it to the High Court, STDC and Teesworks Ltd lost, with the judge ruling they’d have to pay 80 percent of PD Ports’ legal costs, thought to potentially cost the taxpayer around £5m.
This is a shorter than usual newsletter, I’m full of wine and picky bits, and I’m sure you are, too. So take this opportunity to either get back to the fridge, or to detoxify before going back to work.
There’s no newsletter on Wednesday, but normal twice-weekly service resumes next Sunday.
I’ll spare you the full sales pitch today, but do think about it if you’re able to!
This is independent, investigative journalism covering the Tees Valley - something you won’t get anywhere else.
Get in touch at teesside@thelead.uk or via social media: Bluesky or X-formerly-known-as-Twitter.
Thanks for reading!
Leigh