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Interim Results 2008

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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

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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

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Interim Results for the six months ended 31 March 2008

FINANCE DIRECTOR’S REVIEW

BOB BADDELEY

European specialist holiday group

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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

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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)

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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

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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)
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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

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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

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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

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CEO REVIEW CARL MICHEL

European specialist holiday group

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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

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PROGRESS AGAINST STRATEGIC THEMES

 Building on core competencies  Develop a multipath approach  Pursue sustainable faster growth  Diversify sales mix

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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

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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

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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

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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

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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

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