The chief executive of the Channel tunnel operator has spoken of his optimism over the Brexit negotiations, which could potentially have hit the company hard.
“We have kept inside the company a bulk of money in the freezer and due to the step forward [in the Brexit negotiations] we can now say we are more comfortable,” said Jacques Gounon, chief executive of Getlink, which was until recently called Eurotunnel.
Mr Gounon said he would increase his previous estimate for the company’s annual earnings after 2022 by 5 per cent because of the agreement on a Brexit transition period last month that would avoid a cliff edge scenario when Britain leaves the EU.
“Thanks to the step forward in the Brexit negotiations between the UK government and Mr Barnier a couple of weeks ago, we are now able to say we are more comfortable in being able to deliver in 2022 more than €735m [in earnings before interest, taxation, depreciation and amortisation],” he said. Ebitda in 2017 came in at €526m.
Getlink earns most of its revenue from its shuttle service, which takes passengers through the Channel tunnel in their cars. Mr Gounon had previously said Brexit could herald the return of duty-free shopping for British visitors to France and vice versa. Before its abolition in 1999, the “booze cruise” trade generated a 10th of his revenue.
Although he recognised that Brexit was a risk to the company, he thought technology could solve most of the problems he might face with the only question being how much it would cost — the harder the Brexit, the higher that cost.
“I understand that there are some huge difficulties in order to fix the border issues [more broadly], but thanks to what we represent with regard to trading and employment, we need to have something that keeps . . . a frictionless border,” he said in his office in central Paris.Mr Gounon, who turns 65 this year, expected to be given another three years in charge of Getlink at the company’s annual general meeting on Wednesday.
Along with the change of name to Getlink — judged necessary because the company was operating a wider business, including Eleclink which will connect energy markets in the UK and the continent from 2020 — a change to the company’s age limit would have to be approved in order to allow Mr Gounon to stay on as chairman and chief executive.Last month Italy’s Atlantia, which also recently jointly took over Spain’s Abertis, bought 15 per cent of Getlink from Goldman Sachs for more than €1bn as it looked to build up a wider European business and reduce its reliance on its home market.
“It’s a quite good signal that some people who are long-term investors have really no fear in investing in our company,” said Mr Gounon.