12 As a public body, NATS could pass all its costs to its customers. NATS is now in the private sector and has new freedoms, but is exposed for the first time to business risks arising from being unable to raise its prices in response to downturns in traffic. These affect NATS' ability to develop its business and finance its investment programme. Events following 11th September have highlighted these risks.
13 Any business, including NATS, can look to internally generated and external sources of finance. Internally generated finance is the surplus, if any, of revenues after meeting the costs of running the business, including paying interest on debt and any dividends to shareholders. External finance comprises borrowing from banks and other lenders and equity capital raised from existing or new shareholders. In the case of NATS there are particular constraints on all of these sources of funds.
NATS' sources and uses of funds |
|
| |
| Year to | Year to | |
Turnover | 553 | 595 | |
Less costs: | Wages and Salaries | (281) | (260) |
| Other net cash costs2 | (164) | (224) |
Net cash inflow from activities | 108 | 111 | |
Net interest on debt finance | (36) | (31) | |
Capital Expenditure | (64) | (79) | |
Corporate Taxation | (6) | (2) | |
Net cash inflow/(ouflow) before financing | 2 | (1) | |
Financing: Net new loans | 23 | - | |
| _____ | _____ | |
NOTES 1. Includes four months when NATS was in public ownership. September 11th occurred nearly half way through NATS' financial year. 2. Includes adjustment of all non-cash items. Source: NATS - 2001/2 figures based on management accounts | |||