Interim Results

RNS Number : 7679S

Holidaybreak PLC

26 May 2009

 



 26 May 2009: For immediate release

HOLIDAYBREAK PLC

Results for the six months ended 31 March 2009

Holidaybreak, the education, leisure and activity travel group, announces interim results for the six months ended 31 March 2009.

The Group traditionally reports an operating loss in the first half due to the seasonal nature of the Camping and Education businesses. 

Financial Highlights

	H1 2009 £m	H1 2008 £m	FY 2008 £m
Group revenue	153.2	156.0	455.1
Headline (loss) profit before tax*	(18.1)	(14.9)	32.6
Statutory (loss) profit before tax	(36.6)	(18.2)	23.4
Headline basic EPS*	(30.3)	(22.2)	53.2
Statutory basic EPS	(65.1)	(27.1)	37.1
Net debt	179.7	165.7	161.3
Dividend per share	4.625p	9.25p	16.05p

* Headline (loss) profit before tax and headline basic EPS are stated before amortisation of acquired intangible assets of £1.7m (H1 2008: £2.8m; FY 2008: £4.2m), impairment of goodwill of £9.6m (H1 2008: £nil; FY 2008: £2.5m), exceptional restructuring costs of £0.2m (H1 2008: £nil; FY 2008: £2.3m) and IAS 39 revaluations of interest rate derivatives and forward currency exchange contracts of £7.0m (H1 2008: £0.5m; FY 2008: £0.2m).  

Carl Michel, Holidaybreak Group Chief Executive, said:

"The Group has performed well in the first half despite being impacted by the recession. The decline in consumer confidence has reinforced the trend towards later bookings, particularly in the Camping Division. We have taken and are taking the necessary steps to cut costs and restructure operations, particularly in the Adventure Travel Division. Meanwhile, Education, our largest division, is doing well and we are seeing signs of improved trading in Hotel Breaks."

"Current trading is in line with management expectations. We will remain focused on cash generation and keeping costs under control while developing growth opportunities which we are currently seeing, both for the short and medium term."

Summary

• These results are in line with management expectations. 

• The Education Division is currently 95% booked for 2009 and 34% for 2010. Sales intake is currently 7% above last year's comparative on a like-for-like basis. The new 428 bed facility at Windmill Hill in Sussex opened on time and on budget on Friday 15 May. 

• Sales intake for the current year at Hotel Breaks is 6% below last year. We have taken out about £1m of costs in the current year at Superbreak, primarily through headcount reduction in the call centre. Trading is improving as we begin to see improved supplier offers (lower room rates and train fares) coupled with better availability. We are also benefiting from an improved London show line-up compared to 2008. Oliver!, which opened in January, has sold well and has also led to increased demand for other established shows such as Wicked, The Lion King and Billy Elliott.

• Sales intake for the Adventure Travel Division is down 3% year-on-year (down 4% at constant exchange rate). Demand for adventure trips has been adversely affected by higher prices due to the weakness of sterling, although certain softer-currency destinations, such as Turkey, are performing reasonably well. A £1m cost saving programme has been implemented and a further restructuring of Explore will take place in the coming months to ensure the business can trade profitably at lower volumes. Due to the adverse trading performance, it has been decided to partially impair Explore's residual goodwill by £9.6m.

• Camping sales to date are 1% down on last year in the context of a 4% reduction in capacity. The division is currently over 86% booked for the whole season, in line with our expectations and compared with 88% last year, highlighting the later booking trend. Yields continue to remain strong across all markets.

Enquiries:

Carl Michel / Bob Baddeley, Holidaybreak                  [phone]

Catherine Hicks / Craig Breheny, Brunswick              [phone]

Note to Editors

Holidaybreak (HBR.L) is an education, leisure and activity travel group listed on the London Stock Exchange. The Group's four operating divisions have market leading positions in the UK and other major European markets, organising educational and activity trips for UK school children, short breaks in the UK and Europe, worldwide adventure holidays and mobile-home and camping holidays on sites throughout Europe. For more information, please go to www.holidaybreak.co.uk.

CHAIRMAN'S STATEMENT

Introduction

Having joined Holidaybreak in April, I am delighted to be working with Carl and the rest of the Board as we seek to build on the expansion of the Group in recent years.

Holidaybreak has market leading positions in certain UK and continental European specialist travel markets. At the same time, the diversity of Holidaybreak's businesses and their geographical spread gives the Group additional resilience.

The Board is focused on keeping costs under control while looking at ways of increasing the Group's ability to exploit the opportunities for acquisitive growth that are arising in current market conditions.

The Board thanks management and staff throughout the Group for their continued hard work and commitment during this challenging period.

Financial results

The Group has traditionally reported an operating loss in the first half due to the seasonal nature of the Camping and Education businesses. In the six month period to 31 March 2009, Holidaybreak recorded a pre-tax loss on ordinary activities of £36.6m (2008: loss of £18.2m). The underlying loss before impairment of goodwill, exceptional restructuring costs and amortisation of acquired intangible assets was £18.1m (2008: loss of £14.9m). 

The profitability and prospects of our subsidiary business, Explore Worldwide Limited, have been significantly impacted by the current economic conditions and, as a result, we have partially impaired the goodwill which arose when we purchased Explore in 2000. The current year impairment charge is £9.6m and the residual goodwill remaining in the balance sheet in respect of Explore is £12.2m.

Finance costs increased from £6.4m to £14.4m. We have incurred a non-cash charge of £7.0m in respect of the revaluations of the Group's interest rate derivatives and forward foreign currency exchange contracts (2008: £0.5m). In addition, this reflects the increase in margin over LIBOR (from 1.30% to 3.25%) payable on borrowings following the modification of covenants in the Group's five year committed credit facilities in November 2008.

The tax rate before amortisation of goodwill for the half year is 19% (2008: 28%). This is calculated on the same basis as the estimated rate of charge for the full year. The underlying tax rate for the foreseeable future is expected to be 24% per annum. 

Capital expenditure for the half year, net of disposals, was £2.1m (2008: £11.8m). reflecting the deferral of certain outlays into the second half of the year. Net capital expenditure for the financial year is expected to be approximately £22m (2008: £23.7m). This includes the investment in the new PGL centre at Windmill Hill.

The half year-end is typically close to a low point in our cash flow cycle. On an annualised basis, all Holidaybreak's divisions are cash generative. Net debt at the half year was £179.7m (2008: £165.7m).

Net debt levels were adversely affected by the weakening of sterling against the euro. This has had the effect of increasing the sterling equivalent of the Group's Euro denominated net borrowings by £6.1m.

Net debt levels typically reduce rapidly during May and June as final summer holiday balances are paid. The pro-forma average net debt for the last financial year was approximately £160.3m (2007: £162.0m). In addition, the Group is required by the CAA, ABTA and IATA and other relevant authorities to provide bonds for the protection of its customers. As at 31 March 2009, the amount of bonds supported by bank guarantees and therefore drawn under the committed credit facilities was £30.4m.

Dividend

The Board has declared a half year dividend of 4.625p per share (2008: 9.25p), consistent with the reduction in the full year dividend of 50% announced in November 2008. This will be payable on 7th September 2009 to shareholders on the register on 16th July 2009. The ex-dividend date will be 14th July 2009.

Divisional review*

Education

The seasonal nature of the business means that it generates an operating loss in the first half of the financial year. First-half operating loss for the Education Division was, as expected, £3.8m (2008: £5.1m) on revenues of £44.1m (2008: £39.5m). Operating loss before amortisation of intangible assets was £2.6m (2008: £3.0m).

The division is currently 95% booked for 2009 and 34% for 2010. Sales for the division are currently 7% above last year on a like-for-like basis. 

The core PGL centre business achieved a very creditable 14% revenue growth in the first half and is forecast to finish the year up 12%. Overall, PGL centres will be providing nearly 700,000 bed nights - a new record. For next year bookings are already showing 13% growth, with revenue up about 8% (reflecting slightly smaller group sizes and durations). We have already taken £22m in forward bookings, representing just over 60% of the expected intake for 2010.

The new centre at Windmill Hill in Sussex opened on time and on budget on Friday 15 May. On Monday 18 May it was 100% full and we have already taken £1.5m of bookings for 2009. Adding 5% (428 beds) to the capacity of PGL, Windmill Hill is already 92% booked for 2009 and 76% for 2010.

There remains no sign of the Group's Education Division being materially impacted by the recession. The division will continue to be the key driver of growth for the Group and we are confident that it will offer the Group considerable scope for profitable growth, both organically and by acquisition. In particular we are looking at new UK locations for PGL centres and sensible smaller bolt-on businesses for NST. 

Hotel Breaks

The Hotel Breaks Division's first-half operating profit was £5.3m (2008: £6.8m) with revenue of £64.5m (2008: £75.5m). Operating profit before amortisation of intangible assets was £5.6m (2008: £7.3m).

Sales intake for Hotel Breaks in the current year is 6% below last year. We have reduced operating costs by approximately £1m in the current year at Superbreak, primarily through headcount reduction to mitigate weaker trading.

Packaged business into London is an important market segment for this division. Declining hotel leisure rates and attractive rail fares have allowed us to offer customers better value short break packages.

Trading in recent weeks has continued to improve and current sales intake is now level with last year as we begin to see the benefit from an improved show line-up compared to 2008. Oliver!, which opened in January, has sold well and has also led to increased demand for other established shows such as Wicked, The Lion King and Billy Elliott, while Sister Act opens in June.

We are currently seeing some growth in UK short breaks bookings and a decline in demand for European destinations, reflecting the weakness of sterling. The net effect is modestly positive, despite lower average booking values.

Our Dutch hotels business, Bookit, is seeing higher volumes but lower hotel rates and the business is thus trading comparably with 2008 (in Euro terms). As in the UK, there is evidence that Dutch consumers are taking short breaks closer to home.

West End Theatre Bookings is developing closer relationships with theatre producers and this is having a positive impact on revenue (up 21% on last year).

Adventure Travel 

First-half operating loss for the Adventure Travel Division was £10.8m (2008: £0.3m profit) on revenues of £44.3m (2008: £40.4m). Operating loss before amortisation of intangible assets, impairment of goodwill and exceptional restructuring costs was £0.8m (2008: £0.5m profit).

The division has not, to date, suffered from the geopolitical issues which impacted last year's trading. We are largely unaffected by the current swine flu epidemic in Mexico, which is not a significant destination for us.

Demand for adventure trips at Explore is down 16% and has been adversely affected by higher prices due to the weakness of sterling, although certain softer-currency destinations, such as Turkey, are performing reasonably well. To mitigate for the weaker demand and reduced margins due to adverse currency movements and inclusion of ad-hoc local payments, we have reduced operating costs by approximately £1m at Explore. A further restructuring will take place in the coming months to ensure the business will be able to trade profitably even if volumes fall by a further 25%, and we have recently relaunched the Explore website with the aim of increasing online sales and helping reduce costs.

Our Dutch business, Djoser, which has also suffered a similar drop in volume to Explore, is now showing a good late booking pattern, benefiting from the recent decision by the Dutch government to scrap the airport departure tax at Schiphol. We have been able to pass on reductions in airline fuel surcharges while maintaining margins.

Travelplus (our German language-trip and gap-year specialist) is trading well and up both in volume and revenue terms. The business is benefiting from the fact that the trips it offers are less easily deferred, of educational benefit and often paid for by parents.

  Camping

Since the vast majority of the Camping Division's revenues occur in the second half of the financial year, the interim operating loss for Camping was £13.4m (2008: £14.8m). The division is again expected to deliver strong cashflow and good margins in the full year. Sales to date are 1% down at current exchange rates and 6% down at constant exchange rates over last year in the context of a 4% reduction in capacity. 

The division is currently over 86 % booked for the whole season, in line with our expectations, and compared with 88% last year, reflecting the later booking profile amongst UK customers compared with 2008. We continue to focus on maximizing occupancy and yields remain strong and in line with target.

The strength of the euro has increased the sterling equivalent yields from Dutch and German bookings, thereby underpinning the trading resilience of the Camping Division. Furthermore we have made cost savings in the UK and Irish call centres and slimmed down the senior management team.

We remain confident that our high season sales will meet our expectations but anticipate that low season sales will be softer as customers forego second breaks in favour of their main holiday. 

We continue to broaden the range of our Camping offer. Our safari tents, introduced on a test basis this summer, are proving popular. In addition we have had a good initial response to our UK camping offer, which we launched in May in partnership with the National Trust and Forest Holidays.

Board Changes

After completing his second three-year term as Chairman, Bob Ayling retired from the Board. Under his Chairmanship, Holidaybreak added and developed a wholly new division to the Group and significantly expanded its presence in Europe. We thank him for his work here and wish him well in his new endeavours. As I take up my role, I look forward to chairing the Group over the coming years.

In April, we announced that the Joint Managing Directors of the Group's Hotel Breaks Division, Nick Cust and Mark Wray, are to retire on 31 December 2009 and a search is currently underway for a new Managing Director for Superbreak, which will not be a Board position. We extend our deep and sincere thanks for their invaluable contribution during this time and are delighted that they will remain on in an advisory capacity in 2010.

Simon Tobin, Managing Director of the Adventure Travel Division, stepped down from the Plc Board and from his divisional duties as of February 2009. Carl Michel, Group Chief Executive, is now chairing the Adventure Travel Division and the managing directors of its individual businesses will report directly to him. The Board would like to thank Simon for his contribution to the Group over the years and to wish him well for the future.

Outlook

Current trading is in line with management expectations. However the Group faces a number of risks and uncertainties (which are described in notes 2 and 10). We will remain focused on keeping costs under control while developing growth opportunities for the short and medium term.

Over the course of the last five months the Board has seen an increase in the number of potentially value enhancing investment or acquisition opportunities, but has not taken advantage of them as the Board's focus has been on managing the business appropriately for the current economic downturn.  The Board anticipate that the trend for accretive new investment or acquisition opportunities will increase over the rest of this financial year and beyond, and is looking at how best to take advantage of these opportunities.

John Coleman

Chairman

26 May  2009

* Details of adjustments to trading results throughout the divisional commentary are described in note 3.

  INDEPENDENT REVIEW REPORT TO HOLIDAYBREAK PLC

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 March 2009 which comprises the condensed consolidated income statement, the condensed consolidated balance sheet, the condensed consolidated statement of recognised income and expense, the condensed consolidated cash flow statement, the analysis of net debt and reconciliation of net cash flow to movement in net debt and selected explanatory notes 1 to 11. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with International Standard on Review Engagements 2410 issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the company those matters we are required to state to them in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdoms' Financial Services Authority.

As disclosed in note 2, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting," as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of Review 

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 March 2009 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

Deloitte LLP

Chartered Accountants and Statutory Auditors

Manchester, United Kingdom

26 May 2009

Condensed consolidated income statement
For the six months ended 31 March 2009
		Unaudited		Audited
		Six months ended		Year ended
		31 March  2009	31 March  2008	30 September 2008
	note	£m	£m	£m
Revenue	3	153.2	156.0	455.1
Net operating costs		(175.9)	(168.8)	(419.1)
Net operating costs before amortisation of other intangible assets acquired via business combinations, impairment of goodwill and exceptional restructuring costs		(164.4)	(166.0)	(410.1)
Amortisation of other intangible assets acquired via business combinations		(1.7)	(2.8)	(4.2)
Impairment of goodwill		(9.6)	-	(2.5)
Exceptional restructuring costs		(0.2)	-	(2.3)
Operating (loss) profit	3	(22.7)	(12.8)	36.0
Investment income		0.5	1.0	1.8
Finance costs	4	(14.4)	(6.4)	(14.4)
Finance costs before fair value losses on interest rate derivatives and fair value gains on forward currency exchange contracts		(7.4)	(5.9)	(14.2)
Fair value losses on interest rate derivatives		(9.2)	(1.8)	(0.5)
Fair value gains on forward currency exchange contracts		2.2	1.3	0.3
(Loss) profit before tax		(36.6)	(18.2)	23.4
Tax	5	5.1	5.1	(5.4)
(Loss) profit for the period		(31.5)	(13.1)	18.0
Attributable to:
Equity holders of the parent		(31.5)	(13.1)	18.0
		Unaudited		Audited
		Six months ended		Year ended
		31 March  2009	31 March  2008	30 September 2008
		Pence	Pence	Pence
Basic (loss) earnings per share	6	(65.1)	(27.1)	37.1
Diluted (loss) earnings per share	6	(65.1)	(27.1)	37.1
Headline basic (loss) earnings per share	6	(30.3)	(22.2)*	53.2*
Headline diluted (loss) earnings per share	6	(30.3)	(22.2)*	53.2*

* The Directors changed the definition of headline earnings per share in the six months ended 31 March 2009 (see note 6). The headline earnings per share figures have, therefore, been restated for the six months ended 31 March 2008 and the year ended 30 September 2008.

Condensed consolidated statement of recognised income and expense  For the six months ended 31 March 2009
	Unaudited		Audited
	Six months ended		Year ended
	31 March  2009	31 March  2008	30 September 2008
	£m	£m	£m
Exchange differences on translation of foreign operations	(5.6)	(4.6)	(1.9)
Actuarial gains on defined benefit pension schemes	-	-	(1.0)
Tax on items recognised directly in equity	-	-	0.1
Net expense recognised directly in equity	(5.6)	(4.6)	(2.8)
(Loss) profit for the period	(31.5)	(13.1)	18.0
Total recognised income and expense for the period	(37.1)	(17.7)	15.2
Attributable to:
Equity holders of the parent	(37.1)	(17.7)	15.2

Condensed consolidated balance sheet
31 March 2009
	Unaudited	Unaudited	Audited
	31 March  2009	31 March  2008	30 September 2008
	£m	£m	£m
Non-current assets
Goodwill	140.4	142.9	145.7
Other intangible assets	28.6	33.7	30.5
Property, plant and equipment	188.4	180.9	175.0
Defined benefit pension asset	-	0.4	-
	357.4	357.9	351.2
Current assets
Inventories	3.2	3.1	2.6
Trade and other receivables	55.4	54.8	36.6
Cash and cash equivalents	46.9	55.7	44.7
Current tax assets	5.7	-	-
	111.2	113.6	83.9
Non-current assets classified as held for sale	0.7	1.1	1.1
Total assets	469.3	472.6	436.2
Current liabilities
Trade and other payables	(176.6)	(170.7)	(122.1)
Provisions for restructuring costs	(0.5)	-	(1.3)
Current tax liabilities	-	(1.8)	-
Obligations under finance leases	(6.0)	(5.8)	(6.0)
Interest bearing loans and borrowings	(0.1)	(204.4)	(13.0)
	(183.2)	(382.7)	(142.4)
Net current liabilities	(72.0)	(269.1)	(58.5)
Non-current liabilities
Deferred tax liabilities	(32.5)	(33.9)	(33.2)
Obligations under finance leases	(12.1)	(11.2)	(15.2)
Defined benefit pension liability	(0.3)	-	(0.4)
Interest bearing loans and borrowings	(208.4)	-	(171.8)
	(253.3)	(45.1)	(220.6)
Total liabilities	(436.5)	(427.8)	(363.0)
Net assets	32.8	44.8	73.2
Equity
Share capital	2.4	2.4	2.4
Share premium account	38.9	38.9	38.9
Own shares	(2.6)	(2.6)	(2.6)
Other reserves	1.1	1.3	1.1
Retained earnings	(7.0)	4.8	33.4
Total equity	32.8	44.8	73.2

Condensed consolidated cash flow statement
For the six months ended 31 March 2009
	Unaudited		Audited
	Six months ended		Year ended
	31 March  2009	31 March  2008	30 September 2008
	£m	£m	£m
Operating (loss) profit	(22.7)	(12.8)	36.0
Adjustments for:
Amortisation of intangible assets	2.4	2.8	5.9
Impairment of goodwill	9.6	-	-
Depreciation of property, plant and equipment	2.3	2.3	13.8
Share-based payment charge	-	-	(0.1)
(Increase) decrease in inventories	(0.6)	1.0	1.5
Increase in receivables	(18.8)	(21.3)	(1.9)
Increase in payables	25.3	34.9	3.8
Cash (outflow) inflow from operating activities	(2.5)	6.9	59.0
Tax paid	(1.8)	(6.5)	(13.1)
Net cash (used in) from operating activities	(4.3)	0.4	45.9
Investing activities
Acquisitions of subsidiaries net of cash acquired	(0.9)	(1.8)	(5.3)
Purchases of intangible assets	(0.4)	(1.0)	(3.9)
Purchases of property, plant and equipment	(2.5)	(12.4)	(26.5)
Proceeds on disposal of property, plant and equipment	0.8	1.6	6.7
Net cash used in investment activities	(3.0)	(13.6)	(29.0)
Financing activities
Finance costs paid	(6.4)	(7.6)	(14.0)
Interest received	1.4	1.3	2.4
Proceeds on issue of ordinary shares	-	0.1	0.1
New bank loans raised	27.8	12.8	-
Repayment of borrowings	(10.0)	-	(13.9)
New finance leases	-	3.4	10.4
Payments under finance leases	(3.2)	(2.8)	(5.7)
Dividends paid	-	-	(15.7)
Net cash from (used in) financing activities	9.6	7.2	(36.4)
Net increase (decrease) in cash and cash equivalents	2.3	(6.0)	(19.5)
Cash and cash equivalents at beginning of period	41.7	58.8	58.8
Effect of foreign exchange rate changes	2.8	-	2.4
Cash and cash equivalents at end of period	46.8	52.8	41.7

Analysis of net debt & reconciliation of net cash flow to movement in net debt
	Unaudited	Unaudited	Audited
	31 March  2009	31 March  2008	30 September 2008
	£m	£m	£m
Cash	46.9	55.7	44.7
Bank overdrafts	(0.1)	(2.9)	(3.0)
Cash and cash equivalents	46.8	52.8	41.7
Debt due within one year	-	(201.5)	(10.0)
Debt due after one year	(208.4)	-	(171.8)
Finance leases less than one year	(6.0)	(5.8)	(6.0)
Finance leases more than one year	(12.1)	(11.2)	(15.2)
Net debt at the end of the period	(179.7)	(165.7)	(161.3)
	Unaudited		Audited
	Six months ended		Year ended
	31 March  2009	31 March  2008	30 September 2008
Reconciliation of net cash flow to movement in net debt
Increase (decrease) in cash and cash equivalents	5.1	(6.0)	(17.1)
Cash (inflow) outflow from movement in net debt	(16.8)	(56.7)	6.8
Cash inflow from increase in net debt	(11.7)	(62.7)	(10.3)
Foreign exchange	(6.1)	(5.0)	(4.0)
Non-cash (increase) decrease in net debt	(0.6)	48.5	(0.5)
Increase in net debt in the period	(18.4)	(19.2)	(14.8)
Net debt at the beginning of the period	(161.3)	(146.5)	(146.5)
Net debt at the end of the period	(179.7)	(165.7)	(161.3)

  Notes to the condensed interim financial statements

1. General information

The financial information for the year ended 30 September 2008 contained within these condensed interim financial statements does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditors' report on those accounts was not qualified and did not contain statements under section 237(2) or (3) of the Companies Act 1985.

The Group's condensed interim financial statements were approved by the Board of Directors on 26 May 2009. This announcement is being sent to shareholders and will be made available at the Company's registered office at Hartford Manor, Greenbank Lane, Northwich, Cheshire, CW8 1HW.

2. Basis of preparation

The annual financial statements are prepared in accordance with International Financial Reporting Standards as adopted by the European Union. These condensed interim financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting' and International Financial Reporting Standards as adopted by the European Union, and in accordance with those policies disclosed within the Annual Report for the year ended 30 September 2008.

Going Concern

The Directors, in their consideration of going concern, have reviewed the Group's future cash flow forecasts and revenue projections, which they believe are based on market data and past experience. The Directors believe, based on those forecasts and projections, that it is appropriate to prepare the financial information of the Group on the going concern basis.

Management is currently of the opinion that the Group's forecasts and projections, after subjecting them to reasonable robust sensitivities and having considered potential mitigating actions, show that the Group should be able to operate within its current facilities and comply with its banking covenants. In arriving at their conclusion that the Group has adequate financial resources, the Directors were mindful that the Group has a robust policy towards liquidity and cash flow management and that it is financed through £265m of committed facilities through to 2013.

2. Basis of preparation (continued)

Going concern (continued)

The Group is subject to a number of significant risks and uncertainties, which arise as a result of the current economic environment. In particular, the Group's businesses are exposed to the risk that the travel market, particularly for late bookings, does not materialise. They are also exposed to fluctuations in foreign currency exchange rates and interest rates. Additional risks and uncertainties that the Group faces are detailed in note 10.

The Directors believe that the Group is adequately placed to manage its business risks successfully despite the current uncertain economic outlook and challenging macro economic conditions.    

  3. Business and geographical segments

Since the previously issued condensed interim financial statements, management has reviewed its segments in respect of the allocation of interest bearing liabilities, income tax and intangible assets. Interest bearing assets and income tax balances are allocated to corporate assets and intangible assets including goodwill are allocated to the respective division. The 31 March 2008 segments have been restated for the impact of this change.

Business segments

For management purposes, the Group is currently organised into the following divisions: Education, Hotel Breaks, Adventure Travel and Camping. These divisions are the basis on which the Group reports its primary segment information.

Segment information about these divisions is presented below:

6 months ended 31 March 2009	Education £m	Hotel Breaks £m	Adventure Travel £m	Camping £m	Consolidated £m
Revenue
Total revenue	44.1	64.5	44.3	0.3	153.2
Result
Operating (loss) profit before amortisation of other intangible assets acquired via business combinations, impairment of goodwill and exceptional restructuring costs	(2.6)	5.6	(0.8)	(13.4)	(11.2)
Amortisation of other intangible assets acquired via business combinations	(1.2)	(0.3)	(0.2)	-	(1.7)
Impairment of goodwill	-	-	(9.6)	-	(9.6)
Exceptional restructuring costs	-	-	(0.2)	-	(0.2)
Segment result	(3.8)	5.3	(10.8)	(13.4)	(22.7)
Investment income					0.5
Finance costs					(14.4)
Profit before tax					(36.6)
Tax					5.1
Loss for the period					(31.5)

6 months ended 31 March 2009	Education  £m	Hotel Breaks £m	Adventure Travel £m	Camping  £m	Consolidated £m
Other information
Capital additions1	0.6	0.7	0.2	1.4	2.9
Depreciation and amortisation	2.7	0.8	0.7	0.5	4.7
Non-current assets held for sale2	-	-	-	0.7	0.7
Balance sheet
Assets
Segment assets	221.3	64.0	46.0	85.2	416.5
Unallocated corporate assets					52.8
Consolidated total assets					469.3
Liabilities
Segment liabilities	(48.4)	(54.0)	(20.4)	(40.3)	(163.1)
Unallocated corporate liabilities					(273.4)
Consolidated total liabilities					(436.5)
1 Includes additions of other intangible assets and property, plant and equipment in addition to acquisition of subsidiary intangible assets and property, plant and equipment.
2 Non-current assets held for sale are mobile homes held within the Camping Division.

3. Business and geographical segments (continued)

Business segments (continued)

6 months ended 31 March 2008	Education £m	Hotel Breaks £m	Adventure Travel £m	Camping £m	Consolidated £m
Revenue
Total revenue	39.5	75.5	40.4	0.6	156.0
Result
Operating (loss) profit before amortisation of other intangible assets acquired via business combinations	(3.0)	7.3	0.5	(14.8)	(10.0)
Amortisation of other intangible assets acquired via business combinations	(2.1)	(0.5)	(0.2)	-	(2.8)
Segment result	(5.1)	6.8	0.3	(14.8)	(12.8)
Investment income					1.0
Finance costs					(6.4)
Profit before tax					(18.2)
Tax					5.1
Loss for the period					(13.1)

6 months ended 31 March 2008 (Restated)	Education  £m	Hotel Breaks £m	Adventure Travel £m	Camping  £m	Consolidated £m
Other information
Capital additions1	3.6	1.1	0.8	8.3	13.8
Depreciation and amortisation	3.4	1.0	0.3	0.5	5.2
Non-current assets held for sale2	-	-	-	1.1	1.1
Balance sheet
Assets
Segment assets	214.6	56.9	58.5	86.4	416.4
Unallocated corporate assets					56.2
Consolidated total assets					472.6
Liabilities
Segment liabilities	(43.4)	(58.8)	(18.4)	(34.7)	(155.3)
Unallocated corporate liabilities					(272.5)
Consolidated total liabilities					(427.8)
1 Includes additions of other intangible assets and property, plant and equipment in addition to acquisition of subsidiary intangible assets and property, plant and equipment.
2 Non-current assets held for sale are mobile homes held within the Camping Division.

  3. Business and geographical segments (continued)

Business segments (continued)

Year ended 30 September 2008	Education £m	Hotel Breaks £m	Adventure Travel £m	Camping £m	Consolidated £m
Revenue
Total revenue	109.5	149.9	94.6	101.1	455.1
Result
Operating profit before amortisation of other intangible assets acquired via business combinations, impairment of goodwill and exceptional restructuring costs	10.9	15.5	4.8	13.8	45.0
Amortisation of other intangible assets acquired via business combinations	(2.9)	(0.9)	(0.4)	-	(4.2)
Impairment of goodwill	-	-	(2.5)	-	(2.5)
Exceptional restructuring costs	(1.8)	-	-	(0.5)	(2.3)
Segment result	6.2	14.6	1.9	13.3	36.0
Investment income					1.8
Finance costs					(14.4)
Profit before tax					23.4
Tax					(5.4)
Profit for the year					18.0

Year ended 30 September 2008	Education  £m	Hotel Breaks £m	Adventure Travel £m	Camping  £m	Consolidated £m
Other information
Capital additions1	10.6	3.0	1.3	16.8	31.7
Depreciation and amortisation	6.6	1.8	1.0	10.1	19.5
Non-current assets held for sale2	-	-	-	1.1	1.1
Balance sheet
Assets
Segment assets	224.1	47.5	57.8	61.6	391.0
Unallocated corporate assets					45.2
Consolidated total assets					436.2
Liabilities
Segment liabilities	(39.3)	(42.4)	(25.3)	(14.0)	(121.0)
Unallocated corporate liabilities					(242.0)
Consolidated total liabilities					(363.0)
1 Includes additions of other intangible assets and property, plant and equipment in addition to acquisition of subsidiary intangible assets and property, plant and equipment.
2 Non-current assets held for sale are mobile homes held within the Camping Division.

  3. Business and geographical segments (continued)

Geographical segments

The following table provides an analysis of the Group's revenue by geographical market:

	6 months ended		Year ended
	31 March 2009	31 March 2008	30 September 2008
	£m	£m	£m
United Kingdom	124.3	128.9	355.3
Ireland	4.5	4.7	6.4
Netherlands and Belgium	18.2	16.0	64.6
Germany, Switzerland and Austria	6.2	4.7	25.6
Other	-	1.7	3.2
	153.2	156.0	455.1

4. Finance costs

	6 months ended		Year ended
	31 March 2009	31 March 2008	30 September 2008
	£m	£m	£m
Interest on bank overdrafts and loans	7.0	4.9	12.5
Interest on loan notes	-	0.5	0.5
Interest on obligations under finance leases	0.4	0.5	1.2
Total interest expense	7.4	5.9	14.2
Fair value losses on interest rate derivatives	9.2	1.8	0.5
Fair value gains on forward currency exchange contracts	(2.2)	(1.3)	(0.3)
	14.4	6.4	14.4

5. Taxation

The taxation charge for the period ended 31 March 2009 is based on the estimated effective tax rate for the full year of 19 per cent which excludes the impact of the non-tax deductible goodwill impairment of £9.6m (31 March 2008: 28 per cent, 30 September 2008: 21 per cent).

6. (Loss) Earnings per share

The calculation of the basic and diluted (loss) earnings per share is based on the following data:

	Six months ended		Year ended
	31 March  2009	31 March  2008	30 September 2008
	£m	£m	£m
Earnings
Earnings for the purposes of basic and diluted (loss) earnings per share being net profit attributable to equity holders of the parent	(31.5)	(13.1)	18.0
	Number	Number	Number
Number of shares	m	m	m
Weighted average number of ordinary shares for the purposes of basic (loss) earnings per share	48.4	48.3	48.4
Effect of dilutive potential ordinary shares:
Share options and awards	-	-	-
Weighted average number of ordinary shares for the purposes of diluted (loss) earnings per share	48.4	48.3	48.4
	Pence	Pence	Pence
Basic (loss) earnings per share	(65.1)	(27.1)	37.1
Diluted (loss) earnings per share	(65.1)	(27.1)	37.1

Change in the basis of calculation of headline earnings per share

The Directors changed the definition of headline earnings per share in the six months ended 31 March 2009 due to the increasing importance on the Group's performance of IAS 39 revaluations of interest rate derivatives and forward currency exchange contracts.

At 31 March 2008 and 30 September 2008, headline earnings were defined as net profit attributable to equity holders of the parent, after adding back amounts charged to the income statement in respect of amortisation of other intangible assets acquired via business combinations, impairment of goodwill, exceptional restructuring costs, and the combined tax effect thereof.

At 31 March 2009, headline earnings are defined as net profit attributable to equity holders of the parent, after adding back amounts charged to the income statement in respect of amortisation of other intangible assets acquired via business combinations, impairment of goodwill, exceptional restructuring costs, IAS 39 revaluations of interest rate derivatives and forward currency exchange contracts, and the combined tax effect thereof.

This change in the basis of the calculation has resulted in the restatement of 31 March 2008 and 30 September 2008 basic and diluted headline earnings per share figures shown below, from 22.9p (loss) and 52.9p respectively.

  6. (Loss) Earnings per share (continued)

Change in the basis of calculation of headline earnings per share (continued)

The Directors consider that the new headline earnings per share provides a better understanding of the Group's earnings.

	Six months ended		Year ended
	31 March  2009	31 March  2008 (Restated)	30 September 2008 (Restated)
	£m	£m	£m
Earnings
Net profit attributable to equity holders of the parent	(31.5)	(13.1)	18.0
Add back:
Amortisation of other intangible assets acquired via business combinations	1.7	2.8	4.2
Impairment of goodwill	9.6	-	2.5
Exceptional restructuring costs	0.2	-	2.3
IAS 39 revaluations	7.0	0.5	0.2
Tax effect of the above	(1.7)	(0.9)	(1.5)
Earnings for the purposes of headline basic (loss) earnings per share	(14.7)	(10.7)	25.7
	Pence	Pence	Pence
Headline basic (loss) earnings per share	(30.3)	(22.2)	53.2
Headline diluted (loss) earnings per share	(30.3)	(22.2)	53.2

7. Dividends

	Six months ended		Year ended
	31 March  2009	31 March  2008	30 September 2008
	£m	£m	£m
Amounts recognised as distributions in the period:
Final dividend for the year ended 30 September 2008 of 6.8p (2007: 23.3p) per share	3.3	11.2	11.2
Interim dividend for the year ended 30 September 2008			4.5
			15.7
Proposed interim dividend for the year ended 30 September 2009 of 4.625p (2008: 9.25p) per share	2.2	4.5

The amount of £3.3m is in respect of the final dividend for the year ended 30 September 2008; the amount of £11.2m is in respect of the final dividend for the year ended 30 September 2007.

  7. Dividends (continued)

The proposed interim dividend was approved by the Board on 26 May 2009 and has not been included as a liability as at 31 March 2009. The proposed dividend will be payable on 7 September 2009 to shareholders on the register at close of business on 16 July 2009.

8. Bank overdrafts and loans

Following the refinancing of the Group's banking facilities in May 2008, the downturn in the Hotel Breaks Division later in the year, coupled with the heightened uncertainty of future trading in a recession and LIBOR spreads, led the Board to seek a modification of the future covenants from the Group's lending banks for the remainder of the five year facility. The modified covenants give headroom to allow for the possibility of further adverse trading in 2009 and beyond and were agreed in November 2008. The Group also repaid £10.0m of the £50.0m five year term loan. Total committed banking facilities are £265.0m.

The facilities were arranged at interest rates fixed to LIBOR and has resulted in an increase in the Group's finance charges as the margin the Group is now paying on borrowings has increased from 1.3% above LIBOR to 3.25%.  

9. Movement in shareholders' equity

		Six months ended		Year ended
		31 March  2009	31 March  2008	30 September 2008
	note	£m	£m	£m
Equity at the beginning of the period		73.2	73.7	73.7
(Loss) profit for the period		(31.5)	(13.1)	18.0
Total recognised income and expense		(31.5)	(13.1)	18.0
Recognised directly in equity
Exchange differences on translation of foreign operations		(5.6)	(4.6)	(1.8)
Actuarial losses on defined benefit pension schemes		-	-	(1.0)
Tax effect of items recognised direct in equity		-	-	0.1
Dividends declared	7	(3.3)	(11.2)	(15.7)
Debit to equity for share-based payments		-	-	(0.1)
Net change recognised directly in equity		(8.9)	(15.8)	(18.5)
Total movements		(40.4)	(28.9)	(0.5)
Equity at end of the period		32.8	44.8	73.2

  10. Risks and uncertainties

There are a number of potential risks and uncertainties that could have a material impact on the Group's performance over the remaining six months of the financial year and beyond. These include, but are not limited to, the following:

• Economic and financial turmoil across markets: risks such as levels of disposable income, house prices, unemployment, credit availability, inflation, interest rates and consumer confidence can have a significant effect on our customers' willingness and ability to buy products; 

• Foreign exchange and interest rates: fluctuating exchange rates will have financial implications for the Group (transaction and translation) and could impact the consumer demand for the respective market. Exchange rate changes will alter the Sterling value of the Group's Euro denominated debt. Fluctuating interest rates will have an impact on the Group's costs of borrowings;

• Consumer demand: a change in consumer tastes could impact demand levels for the Group's products including shifts in performance for a particular destination or in length of stay;

• Major external events: most of the Group's businesses are exposed to external events, including wars and international unrest, major terrorist events, natural disasters/severe weather conditions, or global pandemics/localised infestations. These events could impact trading or the Group's ability to deliver its products; and

• Health, safety and security: the Group is committed to ensuring the highest standards of health, safety and security in its operations. However, there are material risks to accident or other incidents and litigation, compensation and reputational damage arising from such accidents which would adversely affect the business of the Group.

The Board routinely monitors all these risks and uncertainties and appropriate actions are taken at Board or divisional level to mitigate these risks. The Board conducts an annual self-assessment process designed to review the effectiveness of all internal controls and risk management processes at both divisional and Group level. This process highlights the key risks to the business and what action should reasonably and cost effectively be taken to manage them. 

11. Related parties

Transactions between the company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.  

There has been no change to the nature of related party transactions in the first six months of the financial year that has materially affected the financial position or performance of the Group.

  Responsibility Statement

We confirm that to the best of our knowledge:

• The condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting';

• The interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

• The interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein).

By the order of the Board,

Carl Michel                    

Group Chief Executive

26 May 2009    

Cautionary Statement

This interim management report has been prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed. The interim management report should not be relied on by any other party or for any other purpose.

The interim management report contains certain forward-looking statements. These statements are made by the directors in good faith based on the information available to them up to the time of their approval of this report and such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.                

 

END

 

 

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