Interim Results
Holidaybreak PLC
18 May 2007
18 May 2007: For immediate release
HOLIDAYBREAK PLC
Results for the six months ended 31 March 2007
Overall trading in line with management expectations
Holidaybreak, the European specialist holiday group, announces interim results
for the six months ended 31 March 2007.
Holidaybreak today separately announced the proposed acquisition of UK school
trips organiser PGL.
Holidaybreak Financial Highlights
Six months to Six months to Year to 30.9.06
31.3.07 31.3.06
£m £m £m
Revenue 100.6 88.7 304.5
Operating (loss) /
profit (6.8) (5.8) 34.3
Amortisation of intangible
assets within operating
(loss) / profit (1.1) (0.5) (1.7)
(Loss) / profit before
tax (7.9) (6.3) 32.1
EPS (p) (11.5p) (9.6p) 46.8p
Dividend per share (p) 8.8p 8.0p 29.2p
Net debt 29.6 36.2 3.1
Summary
• Results are broadly in line with management expectations. The Group has
traditionally reported an operating loss in the first half due to the seasonal
nature of its Camping business.
• Dividend per share increased by 10% to 8.8p.
• Net debt at the half year was £29.6m (2006: £36.2m).
• Sales intake for Hotel Breaks is currently 8% above last year. The
recovery in market conditions experienced in the second half of last financial
year has continued. Value-added business into London, with its strong theatre
offerings such as The Sound of Music, Billy Elliot and Dirty Dancing, has been
particularly buoyant. London theatre ticket agent West End Theatre Bookings,
acquired in January, is performing in line with expectations.
• Adventure Travel continues to perform satisfactorily. Adventure current
like-for-like sales for this summer are 7% up. We anticipate another acceptable
performance from this division in the current year. The German businesses
acquired at the end of last financial year, carpe diem and TravelWorks, have
performed well.
• Camping is expected to deliver cash and good margins in the full year.
Camping sales intake to date are level with last year in the context of a 4%
reduction in capacity. We are currently over 85% booked for the whole season, in
line with plan.
• As previously stated, we are making significant investments in our
existing businesses. Organic growth initiatives include the extension of product
ranges in the Adventure Travel Division and investing in the online capability
of all our businesses. We are also investing £9.5m (net of disposal proceeds) in
the current financial year to replace older mobile homes.
Carl Michel, Chief Executive, said: "I continue to be pleased with the progress
the Group is making. This year we again expect to deliver margins well above
industry norms and demonstrate strong cash generation. We continue to have a
healthy pipeline of acquisitions and will grow our brands within Holidaybreak.
"Current trading in all our divisions is broadly in line with expectations and
the Board continues to expect to achieve a satisfactory trading outcome for the
full year. We are excited by the potential of PGL and believe it is an excellent
fit with our strategy"
Enquiries:
Carl Michel / Bob Baddeley Holidaybreak +44 (0) 1606 787100
James Hogan / Craig Breheny / Ash Spiegelberg Brunswick +44 (0)20 7404 5959
Note to Editors
Holidaybreak (HBR.L) is listed on the London Stock Exchange. The European
specialist holiday group sold 3.1m holidays in the year ended 30 September 2006
(2005: 3.0m). 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.
CHAIRMAN'S STATEMENT
Introduction
Holidaybreak is a leading European specialist holiday group with significant
operations in the United Kingdom, the Netherlands and Germany. The Group
provided 544,000 holidays in the six months ended 31 March 2007 (H1 2006:
545,000).
Holidaybreak's performance continues to be driven by its Hotel Breaks and
Adventure Travel divisions which account for approximately 70% of Group sales
(total transaction values) on an annualised basis. Camping, despite making its
normal operating loss in the first half, remains a profitable business. Ongoing
management actions, to ensure capacity is aligned with demand, are continuing to
show positive results.
The Board thanks management and staff throughout the Group for their continued
hard work and commitment during the period.
Financial results
The Group has traditionally reported an operating loss in the first half due to
the seasonal nature of its Camping business. In the six-month period to 31 March
2007, Holidaybreak recorded a pre-tax loss on ordinary activities of £7.9m,
(2006: loss of £6.3m), whilst the operating loss was £6.8m (2006: loss of
£5.8m).
On an annualised basis, all Holidaybreak's operations generate a good level of
cash. Net debt at the half year was £29.6m (2006: £36.2m).
Capital expenditure for the half year, net of disposals, was £9.0m (2006: £4.9m)
and net capital expenditure for the financial year is expected to be
approximately £16.2m (2006: £4.6m). The half year-end typically represents close
to a low point in our cash flow cycle. Net debt levels typically reduce rapidly
during May and June as final summer holiday balances are paid.
Dividend
The Board has declared a half year dividend of 8.8p per share (2006: 8.0p),
representing an increase of 10% on 2006. This will be payable on 14 August 2007
to shareholders on the register on 20 July 2007. The Board intends to continue
its policy of paying ordinary dividends that are appropriate to the prospects
and the underlying performance of the Group.
Divisional review
Hotel Breaks
Hotel Breaks' first-half operating profit was £6.1m (2006: £6.5m) with revenues
£61.3m (2006: £55.2m). Operating profit before amortisation of intangible assets
was £6.7m (2006: £6.8m).
Sales intake for Hotel Breaks is currently 8% above last year. The recovery in
market conditions experienced in the second half of last financial year has
continued. Value-added business into London, with its strong theatre offerings
such as The Sound of Music, Billy Elliot and Dirty Dancing, has been
particularly buoyant.
London theatre ticket agent West End Theatre Bookings, acquired in January, is
performing in line with expectations.
Adventure Travel
First-half operating profit for the Adventure Travel Division was £0.7m (2006:
£0.8m) on revenues of £39.1m (2006: £33.5m). Operating profit before
amortisation of intangible assets was £1.2m (2006: £1.0m).
Adventure current like-for-like sales for this summer are 7% up. We anticipate
another acceptable performance from this division in the current year. The
German businesses we acquired at the end of last financial year, carpe diem and
TravelWorks, have shown encouraging year on year growth.
Geopolitical events continue to impact demand for Middle East tours, but the
breadth of our product offering allows customers many alternative tours. The
family product continues to outperform management's initial expectations.
Camping
With, as always, almost all revenues falling in the second half of the financial
year, the interim operating loss for Camping was £13.6m, (2006: £13.1m). The
increased operating loss is due to the phasing of marketing spend, which, under
IAS38, is written off as incurred.
Camping sales intake to date are level with last year in the context of a 4%
reduction in capacity. We are currently over 85% booked for the whole season, in
line with plan.
As previously stated, we are investing £9.5m (net of disposal proceeds) in the
current financial year to replace older mobile homes.
Camping is expected to deliver cash and good margins in the full year.
Outlook
Management remains focused on maximising yields and generating cash. This year
we again expect to deliver margins well above industry norms.
The Group is seeing a healthy flow of further acquisition opportunities and will
continue to review potential transactions as it grows the brands within
Holidaybreak.
Current trading in all our divisions is broadly in line with expectations and
the Board expects to achieve a satisfactory trading outcome for the full year.
Robert Ayling
Chairman
Group income statement
For the six months ended 31 March 2007
Unaudited 6 Audited Year
Unaudited six months ended months to ended
31 March 2007 31 March 30 September
2006 2006
Acquisitions Existing Total
Operations Continuing
Operations
note £'m £'m £'m £'m £'m
Revenue 3 1.8 98.8 100.6 88.7 304.5
Net operating costs (1.7) (105.7) (107.4) (94.5) (270.2)
---------------- ----- ------- ------- ------- ------ ---------
Net operating costs before
amortisation of other
intangible assets (1.7) (104.6) (106.3) (94.0) (268.5)
Amortisation of other
intangible assets - (1.1) (1.1) (0.5) (1.7)
---------------- ----- ------- ------- ------- ------ ---------
Operating (loss) profit 3 0.1 (6.9) (6.8) (5.8) 34.3
Investment income 0.8 0.8 1.4
Finance costs (1.9) (1.3) (3.6)
---------------- ----- ------- ------- ------- ------ ---------
(Loss) profit before tax (7.9) (6.3) 32.1
---------------- ----- ------- ------- ------- ------ ---------
Tax 2.4 1.8 (9.7)
---------------- ----- ------- ------- ------- ------ ---------
(Loss) profit for the period (5.5) (4.5) 22.4
---------------- ----- ------- ------- ------- ------ ---------
Attributable to:
Equity holders
of the parent (5.5) (4.5) 22.4
---------------- ----- ------- ------- ------- ------ ---------
(Loss) Earnings per share (pence)
Basic 4 (11.5p) (9.6p) 46.8p
Group statement of recognised income and expense
For the six months ended 31 March 2007
Six months Year ended
ended
31 March 31 March 30 September
2007 2006 2006
£'m £'m £'m
(Loss) profit for the period from
continuing operations (5.5) (4.5) 22.4
------------------------ -------- -------- ---------
Total recognised income and expense
for the period (5.5) (4.5) 22.4
------------------------ -------- -------- ---------
Attributable to:
Equity holders of the parent (5.5) (4.5) 22.4
------------------------ -------- -------- ---------
Group balance sheet
31 March 2007
31 March 31 March 30 September
2007 2006 2006
£'m £'m £'m
Non-current assets
Goodwill 64.8 56.2 61.5
Other intangible assets 11.8 7.8 11.5
Property, plant and equipment 65.7 67.0 53.4
---------------------- -------- -------- ---------
142.3 131.0 126.4
Current assets
Inventories 1.1 0.7 0.6
Trade and other receivables 52.0 41.1 20.7
Cash and cash equivalents 50.2 43.9 54.4
---------------------- -------- -------- ---------
103.3 85.7 75.7
Assets held for sale 0.5 1.3 2.4
---------------------- -------- -------- ---------
Total assets 246.1 218.0 204.5
---------------------- -------- -------- ---------
Current liabilities
Trade and other payables (116.8) (97.4) (77.4)
Tax liabilities (0.7) (0.8) (4.8)
Obligations under finance leases (5.4) (4.8) (5.0)
Bank overdrafts and loans (67.4) (65.7) (45.9)
---------------------- -------- -------- ---------
(190.3) (168.7) (133.1)
---------------------- -------- -------- ---------
Net current liabilities (87.0) (83.0) (57.4)
---------------------- -------- -------- ---------
Non-current liabilities
Deferred tax liabilities (4.2) (4.3) (5.7)
Obligations under finance leases (7.0) (9.6) (6.6)
---------------------- -------- -------- ---------
(11.2) (13.9) (12.3)
---------------------- -------- -------- ---------
Total liabilities (201.5) (182.6) (145.4)
---------------------- -------- -------- ---------
---------------------- -------- -------- ---------
Net assets 44.6 35.4 59.1
====================== ======== ======== =========
Equity
Share capital 2.4 2.4 2.4
Share premium account 38.5 37.4 37.9
Own shares (2.8) (3.5) (3.2)
Other reserves 1.0 1.0 0.7
Retained earnings 5.5 (1.9) 21.3
---------------------- -------- -------- ---------
Total equity 44.6 35.4 59.1
====================== ======== ======== =========
Group cash flow statement
For the six months ended 31 March 2007
Six months ended Year ended
31 March 31 March 30 September
2007 2006 2006
£'m £'m £'m
----------------------------- ------- ------- ---------
Operating (loss) profit (6.8) (5.8) 34.3
Adjustments for:
Depreciation, amortisation and
impairment of goodwill 2.2 1.4 12.6
IFRS 2 share option charge 0.3 0.2 0.2
(Increase)/ decrease in receivables (31.3) (19.8) (0.4)
Increase/ (decrease) in payables 26.8 18.4 2.1
----------------------------- ------- ------- ---------
Cash (outflow) inflow from operating
activities (8.8) (5.6) 48.8
Tax paid (5.4) (2.8) (7.6)
----------------------------- ------- ------- ---------
Net cash from operating activities (14.2) (8.4) 41.2
----------------------------- ------- ------- ---------
Investing activities
Acquisitions of subsidiaries net of
cash acquired (2.0) - (4.0)
Purchase of intangible assets (1.3) - (0.3)
Purchase of property, plant and
equipment (10.8) (7.3) (10.2)
Proceeds on disposal of property,
plant and equipment 1.8 2.4 5.6
----------------------------- ------- ------- ---------
Net cash used in investment
activities (12.3) (4.9) (8.9)
----------------------------- ------- ------- ---------
Financing activities
Finance costs paid (1.7) (1.2) (2.9)
Interest received 0.8 0.8 1.4
Proceeds on issue of ordinary shares 0.6 0.5 1.0
Proceeds of sale on own shares 0.3 - 0.7
New bank loans raised 22.1 13.6 -
Repayment of borrowings - - (6.3)
Payments under finance leases (2.6) (3.1) (5.9)
New finance leases 3.4 - -
Dividends paid - - (13.1)
----------------------------- ------- ------- ---------
Net cash from (used in) financing
activities 22.9 10.6 (25.1)
----------------------------- ------- ------- ---------
----------------------------- ------- ------- ---------
Net (decrease) increase in cash and
cash equivalents (3.6) (2.7) 7.2
----------------------------- ------- ------- ---------
Cash and cash equivalents at
beginning of period 53.3 46.1 46.1
----------------------------- ------- ------- ---------
Cash and cash equivalents at end of
period 49.7 43.4 53.3
----------------------------- ------- ------- ---------
Analysis of net borrowings & reconciliation of net cash flow to movement in net borrowings
31 March 31 March 30 September
2007 2006 2006
£'m £'m £'m
Cash 50.2 43.9 54.4
Bank overdrafts (0.5) (0.5) (1.1)
--------------------------- -------- -------- ---------
Cash and cash equivalents 49.7 43.4 53.3
Borrowings due within one year (72.3) (70.0) (49.8)
Borrowings due after one year (7.0) (9.6) (6.6)
--------------------------- -------- -------- ---------
Net borrowings at the end of the period (29.6) (36.2) (3.1)
--------------------------- -------- -------- ---------
Six months ended Year ended
31 March 31 March 30 September
2007 2006 2006
Reconciliation of net cash flow to movement in net borrowings
(Decrease) increase in cash and cash equivalents (3.6) (2.7) 7.2
Cash (inflow) outflow from movement in net borrowings (22.9) (10.6) 12.6
--------------------------- -------- -------- ---------
Cash (inflow) outflow from (increase) decrease in net
borrowings (26.5) (13.3) 19.8
Net borrowings at the beginning of the period (3.1) (22.9) (22.9)
--------------------------- -------- -------- ---------
Net borrowings at the end of the period (29.6) (36.2) (3.1)
--------------------------- -------- -------- ---------
Notes to the interim statement
1. General information
The interim statement for the six months ended 31 March 2007 does not constitute
statutory accounts for the purposes of Section 240 of the Companies Act 1985 and
has not been audited. No statutory accounts for the period have been delivered
to the Registrar of Companies. Comparative financial information for the 6
months ended 31 March 2006 has not been audited.
The financial information in respect of the year ended 30 September 2006 has
been produced using extracts from the statutory accounts prepared under IFRS for
this period. The statutory accounts for this period have been filed with the
Registrar of Companies. The auditors have reported on those accounts and that
report was unqualified and did not contain a statement under section 237(2) or
237(3) of the Companies Act 1985.
The financial information presented on pages 1 to 5 has been prepared based on
the adoption of IFRS, including International Accounting Standards (IAS) and
interpretations issued by the International Accounting Standards Board (IASB)
and its committees, as interpreted by any regulatory bodies relevant to the
Group. These are subject to ongoing amendment by the IASB and subsequent
endorsement by the European Commission and are therefore subject to change.
The interim statement was approved by the Board of Directors on 18 May 2007.
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 UK.
2. Accounting policies
Basis of preparation
The interim statement has been prepared on a basis consistent with the Group's
IFRS accounting policies. All of these policies have been applied consistently
throughout the period.
The interim statement has been prepared on the historical cost basis.
3. Business segments
For management purposes, the Group is currently organised into the following
divisions: 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:
Revenue Operating profit (loss)
6 months ended Year ended 6 months ended Year ended
31 March 31 March 30 September 31 March 31 March 30 September
2007 2006 2006 2007 2006 2006
£'m £'m £'m £'m £'m £'m
Continuing Operations
Hotel Breaks 61.3 55.2 122.7 6.1 6.5 16.2
Adventure Travel 39.1 33.5 76.3 0.7 0.8 5.6
Camping 0.2 - 105.5 (13.6) (13.1) 12.5
------ ------- --------- ------- ------- ---------
100.6 88.7 304.5 (6.8) (5.8) 34.3
------ ------- --------- ------- ------- ---------
The result of the business acquired in the period is included in the results of
the Hotel Breaks Division above. Further information on the acquisition is
included in note 7 below.
4. (Loss) Earnings per share
Basic (loss) earnings per share are calculated by dividing the loss attributable
to the ordinary shareholders of £5.5m (2006 - interim loss of £4.5m, full year
profit of £22.4m) by the weighted average number of shares in issue during the
period of 48.1m (2006 - interim 47.6m, full year 47.8m).
5. Dividends
Six months ended Year ended
31 March 31 March 30 September
2007 2006 2006
£'m £'m £'m
------------------------- ------- -------- ---------
Dividends declared in the period of 21.2p per share
(2006 - first half 19.35p, full year 27.35p) 10.2 9.2 13.1
------------------------- ------- -------- ---------
The amount of £10.2m is in respect of the final dividend for the year ended 30
September 2006; the amount of £9.2m is in respect of the final dividend for the
year ended 30 September 2005; the amount of £13.1m is in respect of the final
dividend for the year ended 30 September 2005 plus the interim dividend for the
year ended 30 September 2006.
6. Movement in shareholder's equity
Six months ended Year ended
31 March 31 March 30 September
2007 2006 2006
note £'m £'m £'m
Equity at the beginning of the
period 59.1 48.0 48.0
(Loss) profit for the period (5.5) (4.5) 22.4
---------------------- ----- -------- -------- ---------
Total recognised income and
expense (5.5) (4.5) 22.4
Recognised directly in equity
Dividends 5 (10.2) (9.2) (13.1)
IFRS 2 share option charge 0.3 0.2 0.1
New share capital subscribed 0.6 0.5 1.0
Movement in owned shares 0.3 0.4 0.7
---------------------- ----- -------- -------- ---------
Net change recognised directly in
equity (9.0) (8.1) (11.3)
---------------------- ----- -------- -------- ---------
Total movements (14.3) (12.6) 11.1
---------------------- ----- -------- -------- ---------
Equity at end of the period 44.6 35.4 59.1
---------------------- ----- -------- -------- ---------
7. Acquisition of subsidiary
On 29 January 2007, the Group acquired 100% of the issued share capital of West
End Theatre Bookings Limited for an initial consideration of £2.6m, paid in
cash, and a deferred consideration of up to £0.6m dependent upon certain
considerations and payable over three years. These transactions have been
accounted for by the acquisition method of accounting.
Book & Provisional
Fair Value
£'m
Net assets acquired
Tangible fixed assets 0.1
Other intangible assets 0.5
Stock 0.6
Trade and other receivables 0.1
Cash and cash equivalents 0.7
Trade and other payables (1.1)
--------------------- ------------
0.9
Goodwill 2.4
--------------------- ------------
Total consideration 3.3
Satisfied by:
Cash 2.6
Deferred consideration accrued 0.6
--------------------- ------------
3.2
Directly attributable costs 0.1
--------------------- ------------
--------------------- ------------
Net cash outflow arising on acquisition:
Cash consideration and costs of acquisition (2.7)
Cash and cash equivalents acquired 0.7
--------------------- ------------
(2.0)
--------------------- ------------
8. Events since the balance sheet date
The Directors have declared and approved an interim dividend of 8.8p per share
(2006 - 8.0p per share) on 18 May 2007. This has not been included as a
liability at 31 March 2007. The dividend will be payable on 14 August 2007 to
shareholders on the register at close of business on 20 July 2007.
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