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Interim Results 2008 May 2008 Agenda Bob Ayling (Chairman) - Overview Bob Baddeley (Group Finance Director) - Finance Review Carl Michel (Group Chief Executive) - Strategy - Trading Outlook European specialist holiday group 2 Highlights Interim results - Revenue growth of 55% - Solid performance - DPS + 5% Current trading broadly in line with expectations Great potential for future growth European specialist holiday group 3 Interim Results for the six months ended 31 March 2008 FINANCE DIRECTOR’S REVIEW BOB BADDELEY European specialist holiday group 5 FINANCIAL HIGHLIGHTS Revenues +55% to £156.0m (2007 : £100.6m) EBITA loss (£10.0m) (2007 : (£5.7m)) Net debt £165.7m (2007 : £29.6m) Dividend up 5% European specialist holiday group 6 INCOME STATEMENT 2008 £m Revenue EBITA Loss before tax* Loss per share* * Before amortisation of acquired intangible assets 2007 £m 156.0 (10.0) (15.4) (22.9p) 100.6 (5.7) (6.8) (9.8p) European specialist holiday group 7 DIVISIONAL RESULTS Education Hotel Breaks Adventure Travel Camping Group £m Revenue 2008 2007 EBITA 2008 2007 Amortisation 2008 2007 Operating profit (loss) 2008 2007 39.5 (3.0) (2.1) (5.1) - £m 75.5 61.3 7.3 6.7 (0.5) (0.6) 6.8 6.1 £m 40.4 39.1 0.5 1.2 (0.2) (0.5) 0.3 0.7 £m 0.6 0.2 (14.8) (13.6) (14.8) (13.6) £m 156.0 100.6 (10.0) (5.7) (2.8) (1.1) (12.8) (6.8) European specialist holiday group 8 CASH FLOW 2008 £m (7.7) 13.9 6.2 (10.8) (6.5) (6.3) (17.4) 13.5 (2.1) (6.0) 2007 £m (4.6) (4.2) (8.8) (9.0) (5.4) (0.9) (24.1) 23.8 (3.3) (3.6) 9 EBITDA Working capital movement Operating cash flow Capital expenditure (net) Tax Interest Free cash flow Loans and share issues Acquisitions & intangibles (Decrease) in cash European specialist holiday group BALANCE SHEET Intangibles Property Plant & Equipment Non-current assets Cash and cash equivalents Net current liabilities Short term borrowings Long-term liabilities and provision Net Assets European specialist holiday group 2008 £m 177.0 180.9 357.9 55.7 (113.5) (210.2) (45.1) 44.8 2007 £m 76.6 65.7 142.3 50.2 (63.9) (72.8) (11.2) 44.6 10 BANKING FACILITIES Refinancing of £275m 5 year committed facility completed May - replaces previous £255m facility £50m Term Loan £225m RCF, Bonding and Ancillary Facility still require £30m in CAA & ABTA bonds Initial margin 130 bps + LIBOR (previously 85bps) - attractive terms in current conditions Costs c.£3m - plus £0.5m unamortised from 2005 Minimum headroom c.£50m in current year European specialist holiday group 11 CURRENCY 23% of Group EBITA in € zone Other net exposure - c. €53m - c. $26m Forward contracts in place for 2008 but not for 2009 European specialist holiday group 12 CEO REVIEW CARL MICHEL European specialist holiday group 13 BUSINESS RESILIENCE DIVISION STRENGTHS/POSITIVES EDUCATION Business already 32% booked for 2009. Seen as non-discretionary spend Two leading UK education brands HOTELS BREAKS Increased UK hotel availability and less pressure on margins. Customers typically aged 40-70 No room commitments ADVENTURE TRAVEL Average customer age 50 Good growth (+12%) for next year across division. No flight or room commitments Capacity reduced 5% this year. One third of revenues come from outside UK. Large pool (50,000) of lapsed UK loyalists. Seen as a cheaper option for a family holiday European specialist holiday group CAMPING 14 PROGRESS AGAINST STRATEGIC THEMES Building on core competencies Develop a multipath approach Pursue sustainable faster growth Diversify sales mix European specialist holiday group 15 1. BUILDING ON CORE COMPETENCIES Selling London theatre visits to schools NST Packaging hotel stays with premium tickets WETB SUPERBREAK Web expertise London theatre for the Dutch Selling last minute Camping stock Focus on respective sales expertise in tours and centres. Exchange customer lists BOOKIT Schools Adventures* EXPLORE Cycling product PGL Action stations on campsites KEYCAMP/ EUROCAMP DJOSER Work assignments at PGL centres Summer language schools* Work-travel and TRAVELPLUS Volunteer products * Activity planned for 2009 16 European specialist holiday group 2. DEVELOP A MULTIPATH APPROACH Organic developments Launch of Explore Tailor-made in late June Launch of Travelworks in UK Introduction of tree-houses and Florida into Camping programme Channel developments Explore products to be sold via Thomas Cook New ticket booth at Leicester Square Bolt-on acquisitions Acquisition of Divantoura (Ghent) Healthy pipeline of deal opportunities European specialist holiday group 17 3. PURSUE SUSTAINABLE FASTER GROWTH Windmill Hill in Hailsham, Sussex – a new centre with the potential for 400+ beds. £300k of bookings for 2009 Other opportunities to grow UK bedstock on existing sites – potential to add further 480 beds (on base of 6,800) in 2008/09 Drive to value added packaging in London Up year to date from 36% to 49% - average spend 2¼ times that of room-only sales Larger presence allow more substantial ticket commitments for shows Continued systems investment Cost synergies next year between NST and PGL European specialist holiday group 18 4. DIVERSIFY SALES MIX 2007/08 proforma sales: Education 22%, Hotels Breaks 33%, Adventure Travel 21%, Camping 24% Adventure Travel Division already half non-UK revenue Looking at several European acquisitions Portfolio now spanning all customer age bands: European specialist holiday group 19 TRADING UPDATE Education Up 9%. £19m of turnover already booked with UK adventure centres for 2009 Hotel Breaks Sales intake up 7%. Activity in London will tail off with August ending of Tutankhamum/China Warriors but new shows (Oliver!) and exhibitions (Hadrian’s Britain) to follow Margins continue at around 12% to reflect investment in IT systems and web affiliate costs Adventure Travel Current summer sales up 5%. Impact of Antarctic, Kenya and Tibet worth about £2m in sales with margin adversely affected by around £0.8m. Camping Up 2% on capacity down 5%. Now 90% booked, but depends on late UK market (last year assisted by bad weather) Margins assumed to be stable European specialist holiday group 20 OUTLOOK The group enjoys A sound financial position Industry-leading margins Good operating cashflow Current performance is good Our operations are resilient We have confidence in the longer term growth prospects for the group European specialist holiday group 21
"Interim Results 2008"