With the current interest in infrastructure stocks following the latest budget, Sydney Airport Holdings Ltd (ASX: SYD) continues to be one to watch. The recent decision to proceed with a second airport at Badgery's Creek is a long-term positive as Sydney Airport has acquired the valuable first right to develop and operate.
2014 AGM presentation
- Given on the 15 May, 2014, salient factors were:
- Strong international passenger growth year to date
- Sydney Airport is one of the world's largest airports to accommodate the A380 airbus
- It has 205 retail leases and more than 360 property leases
- It has 16,000 car park spaces
- There are three runways, three terminals and 99 aircraft parking bays
The last 12 months were exceptional with these highlights
- Strong underlying revenue growth across all key businesses
- 7.3% EBITDA growth on 4.1% international passenger growth
- $241 million of capital invested in capacity expansions and business improvements to accommodate ongoing growth
- Over half of the 36 international airlines landing at Sydney increased seat numbers
- Growth from both emerging markets and more traditional markets
- Strong demand to date for Chinese New Year, in addition to a solid Easter and Anzac Day period
- Key target markets were China, Philippines, India and Indonesia
Strategy to deliver sustainable EBITDA and distributable cash growth going to involve
- Increase in revenue from duty free operations
- Prudent management of costs and capital expenditure
Foolish Takeaway
Returning a reasonable dividend of 5.25% per annum and showing a 19% total investor return for the latest year, Sydney Airport has provided a compound return of 22.5% for shareholders since 2009. An expected increase in passenger numbers augurs well for a continuation of similar results going forward. I would be happy to acquire shares in this financially sound company, especially if there is a significant pullback at the end of this financial year.
