IFRS Restatement

Holidaybreak PLC
12 May 2006


HOLIDAYBREAK PLC

IFRS RESTATEMENT

• Holidaybreak plc today publishes an analysis of the main impact of
  International Financial Reporting Standards (IFRS) on its results for 2005
  together with a detailed reconciliation from UK Generally Accepted Accounting
  Principles (UK GAAP) to IFRS.

In Summary

                                                                   IFRS UK GAAP
                                                                     £m      £m

Headline profit for the year ended 30 September 2005*              31.7    32.0
Headline (loss) for the six months ended 31 March 2005*            (8.0)   (0.7)
Statutory profit before tax for the year ended 30 September 2005   21.1    19.4
Statutory (loss) for the six months ended 31 March 2005*           (8.6)   (2.4)
Headline earnings per share for the year ended 30 September 2005
(pps)*                                                             48.5p   48.8p
Basic earnings per share for the year ended 30 September 2005
(pps)                                                              28.6p   25.1p
Net assets at 30 September 2005                                    48.5    38.4
Net assets at 30 September 2004                                    43.7    36.5


* Headline profit and headline EPS are stated before amortisation and impairment
of goodwill/ intangibles of £12.6m under UK GAAP and £10.7m under IFRS. Headline
loss for the six months ended 31 March 2005 is stated before amortisation and
impairment of goodwill/ intangibles of £1.7m under UK GAAP, £0.6m under IFRS.


Bob Baddeley, Finance Director, said:

"The changes resulting from the adoption of IFRS are accounting changes only and
do not affect the underlying operations or cash flows of the Group."

The attached information is unaudited and may be subject to change.

Enquiries:

Bob Baddeley            Holidaybreak
[phone]

Craig Breheny           Brunswick
[phone]


Note to Editors

Holidaybreak (HBR.L) is listed on the London Stock Exchange. The European
specialist holiday group sold 3m holidays in the year ended 30 September 2005
(2004: 2.3m). Holidaybreak has three operating divisions: Hotel Breaks,
Adventure Travel and Camping. Each is a market leader in its respective
specialist sector of the European holiday industry, has multi-channel
distribution and is recognised for providing high standards of product and
service quality.

Restatement of financial information for 2005 under International Financial
Reporting Standards (IFRS)

1. Introduction

   Historically Holidaybreak plc has prepared its consolidated financial 
   statements in accordance with UK GAAP. As a result of changes in EU 
   legislation Holidaybreak plc will need in future to prepare consolidated 
   financial statements in accordance with IFRS.

   This change applies to all accounting periods beginning on or after 1 January
   2005. The Group's first Interim Report under IFRS will therefore be for the 
   six months ended 31 March 2006 and its first Annual Report under IFRS will be 
   for the year ended 30 September 2006. Prior period comparatives are restated 
   to comply with IFRS.

2. Basis of preparation and first time adoption

   The unaudited financial information presented in this document has been 
   prepared on the basis of all IFRSs that are expected to be applicable for the 
   Group's 2006 reporting. Further standards and/or interpretations may be 
   issued that could apply to 2006. If any such amendments, new standards or new
   interpretations are issued these may require the financial information 
   provided in this document to be changed.

   The Group will also continue to review its accounting policies in the light 
   of emerging industry consensus on the practical application of IFRS. This 
   could also mean that the financial information provided in this document may 
   require modification until the first complete set of audited IFRS financial 
   statements are completed for the year ending 30 September 2006.

   The rules of first time adoption of IFRS are set out in IFRS 1 - 'First time
   Adoption of International Financial Reporting Standards'. In general an 
   entity is required to define its IFRS policies and apply them 
   retrospectively. IFRS 1, does however, allow the entity to take advantage of 
   a number of exemptions from restating historical data in certain instances. 
   These exemptions, which are designed to simplify the transition process, have 
   been described below to the extent that the Group has applied them.

a) IFRS 2 "Share Based Payments"

   IFRS 2 has been applied to all options granted after 7 November 2002 and 
   which have not fully vested as at 1 January 2005.

b) IFRS 3 "Business Combinations"

   Holidaybreak plc has opted to apply IFRS 3 prospectively from 1 October 2004.
   Accordingly, acquisitions prior to this date have not been restated for the
   effects of IFRS 3.

c) IAS 32 "Financial Instruments: Disclosure and Presentation" and IAS 39
   "Financial Instruments: Recognition and Measurement"

The Group will not present comparative information that complies with IAS 32 and
IAS 39.

d) IAS 16 "Property, Plant & Equipment

   The Group has taken advantage of the IFRS 1 exemption to elect to measure the
   value of tangible fixed assets at 1 October 2004, at historic cost.

3. Review of the Changes Arising from the Transition from UK GAAP to IFRS

   The following explains the adjustments arising from the transition to IFRS.

a) IFRS 2 "Share Based Payments"

   IFRS 2 requires an expense to be recorded in the income statement for all 
   forms of share-based payments. The expense is based on the fair value of the 
   share award at the date the award is made. The expense is recorded over the 
   period for which the employee provides services in respect of the share 
   scheme.

   The main impact for the Group is that executive share option awards are now
   recorded as an expense in the income statement at fair value. The fair value 
   of the options has been calculated using the Black Scholes option-pricing 
   model. The expense is recognised over the period from the date of award to 
   the date of vesting.

   As referred to in 2(a) (above), IFRS 2 has only been applied to options 
   awarded after 7 November 2002 that had not vested at 1 January 2005. The 
   impact of the expense is to reduce profit before tax by £0.3m for the year 
   ended 30 September 2005, and to reduce retained profits by £0.2m at 
   1 October 2004.

b) IFRS 3 "Business Combinations"

   IFRS 3 prohibits the amortisation of goodwill. The standard requires goodwill 
   to be carried at cost. Impairment reviews are required annually and when 
   there are indications that the carrying value may not be recoverable.

   Goodwill amortised under UK GAAP during the year ended 30 September 2005
   included an amount of £0.5m that has been reclassified to goodwill impairment
   under IFRS. The Group has reversed the remaining goodwill amortisation charge
   for the year ended 30 September 2005, resulting in an increase in profit 
   before tax of £3.4m.

   IFRS 3 requires that consideration paid in excess of the value of assets
   acquired be held in the balance sheet. Whereby under UK GAAP, this balance 
   was all deemed to be goodwill, intangible assets acquired that meet the 
   definition of an intangible asset under IAS 38 (i.e. assets that are 
   'identifiable non-monetary assets without physical substance') must be 
   identified, recognised separately from goodwill and amortised over the period 
   to which benefits from such assets relate.

   A review of material acquisitions made by the Group since 1 October 2004 for
   items that meet the definition of an intangible asset to be recognised under
   IFRS 3 has identified the following:

   Intangible asset      Fair value   Fair value   Amortisation in    Useful economic life
                      under UK GAAP   under IFRS              2005
                                 £m           £m                £m

   Goodwill                    38.9        29.2                  -           Not amortised

   Brands                         -         7.5                0.4             10-20 years

   Customer lists                 -         0.3                  -                 5 years
   Order book at
   acquisition                    -         0.7                0.7     Period to departure
                                                                       
   Internal use
   software                       -         1.2                0.3                 3 years
   -------------         ----------   ---------           --------             -----------
   Total                       38.9        38.9                1.4
   -------------         ----------   ---------           --------             -----------

   Whilst the Group believes that the valuation and subsequent amortisation of
   intangible assets will not have a sizeable impact on the income statement, 
   the annual amortisation charge going forward is extremely difficult to 
   forecast accurately. The valuation of brands of travel companies, whilst not 
   considered to be a significant proportion of the value of the majority of 
   travel businesses, will vary in value from entity to entity. The value of the 
   order book at acquisition date will also be dependant on the travel season in 
   which acquisition occurs. In Holidaybreak's case, all holidays pre-booked at 
   the date of acquisition had been completed by 30 September 2005, and hence 
   the value of the order book at acquisition had been fully amortised by that 
   date.

c) IAS 10 "Post Balance Sheet Events "

   Under UK GAAP proposed dividends payable were shown as a liability at the
   balance sheet date if they related to a period prior to that date. A 
   liability was recognised even where the dividends in question were not 
   approved until after the balance sheet date. Under IAS 10 the declaration of 
   a dividend is only recognised as a liability at the date it is approved. 
   Additionally dividends no longer appear on the face of the income statement 
   but are instead shown within the Statement of Changes in Shareholder Equity.

   The impact is to increase net assets at 30 September 2005 by £9.2m.

d) IAS 38 "Intangible Assets"

   Under IAS 38 the policy on intangible assets is to capitalise all such assets
   where they meet the criteria specified within IAS 38.

   The standard requires that all expenditure on advertising and promotional
   activities should be written off as incurred. Under UK GAAP, the Group's 
   policy has been to charge brochure, other marketing costs and other sales 
   related costs to the profit and loss account in the season to which they 
   relate. Under IFRS, these costs will be charged to the income statement as 
   incurred.

   The impact of this change after deferred tax is to reduce net assets by 
   £1.2m at 30 September 2005. This adjustment will have no impact on the timing 
   of cash flows for the Group. As the value of costs previously deferred has 
   been similar each year, any adjustment to profit is expected to be small.

   However, approximately £7.3m of expenditure in relation to brochure costs
   previously charged in the second half of the financial year will now be 
   written off as incurred, thereby increasing the first half trading loss.

Consolidated Income Statement
For the year ended 30 September 2005
                                                      Adjustments
                                     UK GAAP   IAS 38   IFRS 2  IFRS 3    IFRS
                                          £m       £m       £m      £m       £m

Revenue                                303.0                              303.0
Net operating costs                   (279.8)    (1.4)    (0.3)    3.4   (278.1)
--------------------------------     -------  -------  -------  ------  -------
Profit from operations                  23.2     (1.4)    (0.3)    3.4     24.9

Profit from disposal of property         0.6                                0.6
Investment income                        1.2                                1.2
Interest payable and similar
charges                                 (5.6)                              (5.6)
---------------------------------    -------  -------  -------  ------  -------
Profit on ordinary activities
before tax                              19.4     (1.4)    (0.3)    3.4     21.1
---------------------------------    -------  -------  -------  ------  -------
Tax on profit on ordinary
activities                              (7.6)       -      0.1    (0.1)    (7.6)
---------------------------------    -------  -------  -------  ------  -------
Profit on ordinary activities
after tax                               11.8     (1.4)    (0.2)    3.3     13.5
---------------------------------    -------  -------  -------  ------  -------


Consolidated Income Statement
For the six months ended 31 March 2005
                                                     Adjustments
                                     UK GAAP   IAS 38   IFRS 2  IFRS 3     IFRS
                                          £m       £m       £m      £m       £m

Revenue                                 85.3                               85.3
Net operating costs                    (85.6)    (7.8)    (0.1)    1.7    (91.8)
----------------------------------   -------  -------  -------  ------  -------
(Loss) from operations                  (0.3)    (7.8)    (0.1)    1.7     (6.5)

Investment income                        0.4                                0.4
Interest payable and similar
charges                                 (2.5)                              (2.5)
----------------------------------   -------  -------  -------  ------  -------
(Loss) on ordinary activities
before tax                              (2.4)    (7.8)    (0.1)    1.7     (8.6)
----------------------------------   -------  -------  -------  ------  -------
Tax on (loss) on ordinary
activities                               0.7      1.7                       2.4
----------------------------------   -------  -------  -------  ------  -------
(Loss) on ordinary activities
after tax                               (1.7)     6.1     (0.1)    1.7     (6.2)
----------------------------------   -------  -------  -------  ------  -------


Consolidated Balance Sheet
At 30 September 2005
                                              Adjustments

                             UK GAAP  IAS 10  IAS 38  IFRS 2  IFRS 3      IFRS
                                  £m      £m      £m      £m      £m        £m
Non-current assets
Goodwill                        62.3            (9.7)            3.4      56.0
Other intangible assets            -             8.3                       8.3
Property, plant and
equipment                       62.9                                      62.9
--------------------------   -------  ------  ------  ------  ------    ------
                               125.2       -    (1.4)      -     3.4     127.2
--------------------------   -------  ------  ------  ------  ------    ------

Current assets
Inventories                        -             0.5                       0.5
Trade and other
receivables                     23.7            (1.8)                     21.9
Cash and cash equivalents       50.4                                      50.4
--------------------------   -------  ------  ------  ------  ------    ------
                                74.1       -    (1.3)      -       -      72.8
--------------------------   -------  ------  ------  ------  ------    ------
Assets held for sale             3.3                                       3.3
--------------------------   -------  ------  ------  ------  ------    ------
Total assets                   202.6       -    (2.7)      -     3.4     203.3
--------------------------   -------  ------  ------  ------  ------    ------
Current liabilities
Trade and other payables       (82.2)    9.2    (0.4)                    (73.4)
Tax liabilities                 (2.7)                                     (2.7)
Obligations under
finance leases                  (5.8)                                     (5.8)
Bank overdrafts and
loans                          (55.8)                                    (55.8)
--------------------------   -------  ------  ------  ------  ------    ------
                              (146.5)    9.2    (0.4)      -       -    (137.7)
--------------------------   -------  ------  ------  ------  ------    ------
Net current liabilities        (72.4)    9.2    (1.7)      -       -     (64.9)
--------------------------   -------  ------  ------  ------  ------    ------
Non-current liabilities
Deferred tax liabilities        (6.1)            0.5     0.2    (0.1)     (5.5)
Obligations under
finance leases                 (11.6)                                    (11.6)
--------------------------   -------  ------  ------  ------  ------    ------
                               (17.7)      -     0.5     0.2    (0.1)    (17.1)
--------------------------   -------  ------  ------  ------  ------    ------
Total liabilities             (164.2)    9.2     0.1     0.2    (0.1)   (154.8)
--------------------------   -------  ------  ------  ------  ------    ------
Net assets                      38.4     9.2    (2.6)    0.2     3.3      48.5
--------------------------   -------  ------  ------  ------  ------    ------
Equity
Share capital                    2.4                                       2.4
Share premium account           36.9                                      36.9
Other reserves                  (3.8)                                     (3.8)
Share option reserve               -                     0.5               0.5
Retained earnings -
brought forward                  3.6            (1.2)   (0.1)              2.3
- current year                  (0.7)    9.2    (1.4)   (0.2)    3.3      10.2
--------------------------   -------  ------  ------  ------  ------    ------
Total equity                    38.4     9.2    (2.6)    0.2     3.3      48.5
--------------------------   -------  ------  ------  ------  ------    ------


Consolidated Balance Sheet
At 1 October 2004

                                  UK GAAP   IAS 10   IAS 38   IFRS 2      IFRS
                                       £m       £m       £m       £m        £m
Non-current assets
Goodwill                             36.2                                 36.2
Property, plant and equipment        70.6                                 70.6
------------------------------    -------   ------   ------   ------    ------
                                    106.8        -        -        -     106.8
------------------------------    -------   ------   ------   ------    ------
Current assets
Inventories                             -               0.5                0.5
Trade and other receivables          20.8              (1.8)              19.0
Cash and cash equivalents            31.4                                 31.4
------------------------------    -------   ------   ------   ------    ------
                                     52.2        -     (1.3)       -      50.9
------------------------------    -------   ------   ------   ------    ------
Assets held for sale                  3.5                                  3.5
------------------------------    -------   ------   ------   ------    ------
Total assets                        162.5        -     (1.3)       -     161.2
------------------------------    -------   ------   ------   ------    ------
Current liabilities
Trade and other payables            (74.1)     8.4     (0.3)             (66.0)
Tax liabilities                      (1.9)                                (1.9)
Obligations under finance leases     (7.2)                                (7.2)
Bank overdrafts and loans            (7.6)                                (7.6)
------------------------------    -------   ------   ------   ------    ------
                                    (90.8)     8.4     (0.3)       -     (82.7)
------------------------------    -------   ------   ------   ------    ------
Net current liabilities             (38.6)     8.4     (1.6)       -     (31.8)
------------------------------    -------   ------   ------   ------    ------
Non-current liabilities
Bank loans                          (11.7)                               (11.7)
Deferred tax liabilities             (6.1)              0.4               (5.7)
Obligations under finance leases    (17.4)                               (17.4)
------------------------------    -------   ------   ------   ------    ------
                                    (35.2)       -      0.4        -     (34.8)
------------------------------    -------   ------   ------   ------    ------
Total liabilities                  (126.0)     8.4      0.1        -    (117.5)
------------------------------    -------   ------   ------   ------    ------
Net assets                           36.5      8.4     (1.2)       -      43.7
------------------------------    -------   ------   ------   ------    ------
Equity
Share capital                         2.4                                  2.4
Share premium account                34.4                                 34.4
Other reserves                       (3.7)                                (3.7)
Share option reserve                    -                        0.2       0.2
Retained earnings                     3.4      8.4     (1.2)    (0.2)     10.4
------------------------------    -------   ------   ------   ------    ------
Total equity                         36.5      8.4     (1.2)       -      43.7
------------------------------    -------   ------   ------   ------    ------


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