Interim Results

Online Travel Corporation PLC
8 July 2002

FOR IMMEDIATE RELEASE                              8TH JULY 2002



                      ONLINE TRAVEL CORPORATION PLC (OTC)



             INTERIM RESULTS FOR THE SIX MONTHS TO 30TH APRIL 2002



                                   HIGHLIGHTS



•         54% growth in gross sales for the six months to £35.7 million  (2001:
£23.2 million)

•         53% increase in gross profit for the six months to £4.9 million (2001:
£3.2 million)

•         EBITDA profit of £0.88 million before web development costs of £0.89
million and exceptional costs of £0.16 million (2001: EBITDA loss of
£0.34million before web development of £0.82 million)

•         Leisure and new media sales increased 2.5 times to £21.7 million
(2001: £8.7 million)

•         Average marketing cost per transaction of £3.60 (2001: £6.10)

•         First in Europe to launch Build-Your-Own holiday booking technology

•         Major media groups and portals as new clients including The Guardian,
The Times, Associated New Media, BTOpenworld and Nationwide

•         Successful expansion into Europe and Australia including AOL,
Altavista, IOL

•         Acquisition of Travelstore.com, creating UK's largest e-travel
corporate business

•         £7.8 million in net assets at 30 April 2002 (including £1.7 million in
cash)



Chief executive of Online Travel Corporation plc, Mark Jones said:



'The results show a strong performance in a particularly challenging period for
the travel industry. We are pleased with the increase in sales of 150% in our
leisure and new media division and the Group has increased gross margins and
operating profits, proportionally reduced costs, developed exciting new products
and successfully integrated acquisitions. We look forward to seeing the further
benefits of our innovations, cost reductions and acquisition strategies at the
full year, and remain watchful of consolidation opportunities in the sector.'



For further information, please contact:


OTC:                                                   Tel + 44 (0) 20 8607 9281

Mark Jones, Managing Director


Durlacher Corporation Plc:                              Tel [phone]

Matthew Robinson/Dru Edmonstone


Noble & Company Limited                                 Tel [phone]

Alasdair Robinson/Joe Philipsz


Cardew&Co.                                             Tel + 44 (0) 20 7930 0777

Richard Fallowfield/Jackie Range




CHAIRMAN'S STATEMENT





The Directors of Online Travel Corporation Plc ('OTC' or the 'Group') are
pleased to present the trading results for the six months ended 30 April 2002.



We are pleased to report an earnings before interest, tax, depreciation and
amortisation (EBITDA) profit of £0.88 million before web development costs of
£0.89 million, an improvement of £1.22 million on the EBITDA loss of £0.34
million, before web development costs  of £0.82 million in the same period last
year.



The period has seen an increase in gross sales to £35.7 million, representing
overall growth of 54% (2001: £23.2 million) on the same period in the previous
year, and an increase in gross profit margin to £4.9 million (2001: £3.2
million).



This interim period was perhaps the most turbulent in the history of the travel
sector. Under such circumstances we are pleased to announce our leisure travel
and new media sales grew to £21.7 million which was an increase of 150% over the
same period last year, whilst our corporate and trade concession business fell
3% to £14.0 million (2001: £14.5 million), in line with revised industry
expectations. This demonstrates the improvements we have made to our sites and
products and a general change in consumer demand patterns towards online travel
booking.



In the past we have generated over 60% of our annual sales in the second half of
the year. In the second half of this year we expect our sales to be increased by
our acquisition in June of Travelstore.com, one of Europe's major Internet
business travel providers.



Our client list has grown, and we have an increased number of large media groups
and portals that recognise the benefit of our services to their customers, now
including major media groups such as The Times, The Telegraph, The Guardian,
Mirror Group, and Associated New Media, plus retailers and portals such as BT,
Virgin, Freeserve, Tiscali and Nationwide. This, in conjunction with our
increasing product range, particularly our Build-Your-Own holiday technology,
places us in a good position to benefit from anticipated growth in online travel
throughout Europe.



The online travel sector has been subject to a period of corporate consolidation
over the interim period and we remain watchful of the consolidation
opportunities in the sector.





Tommaso Zanzotto



Chairman                          8 July 2002









Financial Review



Gross sales value for the Group during the six-month period to 30 April 2002
rose 54% to £35.7 million (2001: £23.2 million). Gross profit margins increased
to £4.9 million, (2001: £3.2 million) and remained at 13.7% as a percentage of
gross sales.



The profit from operations before financial, depreciation and web development
and exceptional costs are £0.88 million, an improvement of £1.2 million on the
loss of £0.32 million before financial, depreciation and web development costs
in same period last year.



The number of transactions increased to 182,600, over 80% more than first six
months in the previous year (2001: 101,200) although the average value per
transaction declined reflecting the general reduction in prices by airlines and
hotels in the post-September 11 period to rebuild consumer confidence.



The statutory profit and loss account on page 10 excludes gross sales and
associated costs from our joint ventures. As these joint ventures are primarily
a method of recording the transactions that we manage for some of our large
corporate clients, we believe it would be useful to include the following
pro-forma profit and loss account for the Group that includes the sales and
associated costs of these joint ventures.


                                                                         6 Months to           6 Months to
                                                                       30 April 2002         30 April 2001
                                                                           £'million             £'million
Gross Sales *                                                                  35.71                 23.25

Gross Margin *                                                                  4.89                  3.21

Operating Costs

Call Centre support                                                             1.67                  1.41
Sales & Marketing                                                               0.58                  0.58
Central overhead & administration                                               1.76                  1.56
                                                                                4.01                  3.55

Profit/(Loss) from operations before web development,                           0.88                (0.34)
depreciation and finance

Exceptional costs                                                               0.16                  0.00
Interest and finance costs                                                      0.13                  0.06
Web development                                                                 0.89                  0.82
Depreciation and amortisation                                                   0.67                  0.38
                                                                                1.85                  1.26

(Loss) before tax                                                             (0.97)                (1.60)

(* Includes 100% of associated companies revenues)




Operational review



The last eight months has been a particularly challenging period for the travel
industry, due to the impact of September 11 and consequent difficult trading
conditions in the travel sector.



The overall increase in gross revenues and gross margins of 54% on the same
period in the previous year were accompanied by a marginal increase of 13% in
operating costs. This reflects the effect of a cost rationalisation program, and
greater efficiencies as a result of an increase in the number of online
transactions. Consequently, we are pleased to disclose an EBITDA profit of £0.88
million before web development costs of £0.89 million.



We have shown an increase of 150% in leisure and new media sales in the
six-month period and this has been achieved with a limited marketing and
operational budget, and we have again outperformed others in the online travel
sector.



Since the period end we have continued to reduce our operating cost base. We
expect additional savings to arise in the future from the streamlining of our
Board and planned relocation of two central London sites to the Travelstore.com
offices in Amersham.



Whilst the decline in our offline corporate and trade sectors of 3% is
disappointing, we believe this to be a relatively good performance in this
challenging period for the traditional travel sector. Support costs for these
businesses have been reduced and we will continue our focus on increasing
revenues and reducing costs by driving the majority of these transactions
online. The acquisition of Travelstore.com is expected to help us achieve more
online sales in this sector, both from their existing customers and sales, and
from the new business potential of Travelstore's highly developed business
travel technology and sales support site in Amersham.





Cost reductions



Our operating cost base increased by 13% to £4.0 million (2001: £3.6 million),
against an increase in gross sales of 54%. The proportional reduction in costs
is derived from the combined impact of our cost rationalization programme and a
higher percentage of online bookings without call centre sales support. We
expect a more pronounced impact on direct costs at the full year.



While we will generate savings through economies of scale, we also aim to drive
a higher proportion of transactions online, without call centre assistance.
Technical developments include a newly integrated order processing system which
we expect to create internal efficiencies. The integration of the
Travelstore.com acquisition has enabled us to close two central London offices
and use their highly developed call centre at Amersham. The impact of a more
streamlined Board should also be seen in the second half of the year.





Operating expenses



The drive to improve service levels and conversion rates led to increased call
centre support costs of £1.67 million (2001: £1.41 million). In terms of the
full year, as a proportion of sales value, we expect this cost will be reduced
by enhanced technology introduced during this period, benefits of scale and the
increasing number of pure online transactions. It will also lead to higher
conversion rates.



Sales and marketing costs of £0.58 million (2001: £0.58 million), includes our
clients' gross profit and revenue shares, and represents a reduction to £3.60
per transaction in comparison with £6.10 in the same period in 2001.  We believe
this to be significantly below the average customer acquisition cost in either
the online or the offline travel sector.



Our general administration and overhead costs increased to £1.76 million (200l:
£1.56 million). The increase includes the cost of integrating acquisitions and
implementation of back-office efficiencies. We will achieve further operational
efficiencies from the introduction of new technology solutions to our business
processes.



In the period the company was subject to several exceptional costs, totalling
£0.16 million. These include the legal fees associated with aborted
acquisitions, the satisfactory resolution of IPR issues with former technology
providers, restructuring of the senior management team and, as part of the
integration of acquisitions made last year, the relocation of two central London
offices. Our organisational structure and supporting infrastructure is improved
and we are now well placed to move forward in the second half of the year.



Web development and content costs of £0.89 million (2001: £0.82 million) reflect
the increased range and integration of travel products and content on our own
and client sites. A part of the increase is due to the specialist expertise
retained from the acquisitions of ifyoutravel.com and bargainholidays.com.



A further £0.66 million (2001: £0.38 million) in depreciation and amortisation
charges incorporated acquisitions and the development of proprietary systems'
technology.





Cash Balance



Our cash balance was £1.7 million (2001: £2.1 million) at 30 April. This was
below our expectations and was primarily due to several overdue debtors
totalling £0.7 million. All these amounts have been collected since the end of
the interim period.





Sales review



We have expanded our client base and now operate over 100 travel sites for a
wide range of portals, media groups, retailers and other travel businesses.
During the period OTC launched a number of new major Strategic Partner sites
including those with: The Times, The Guardian, Cheapflights.com, TV Travel Shop,
Nationwide and Associated New Media. We also renewed deals with Virgin.net and
Freeserve and The Telegraph..



We have also expanded our overseas business and now provide services for BMI
Baby in Ireland and new Strategic Partnerships with major portals and media
groups including Ireland Online, ESAT Digital, Oceanfree and The Independent.
Our white label concept has been extended to Asia Pacific with new contracts
with major portals including AOL and Altavista.




Online transactions



We continue to offer our customers the choice to book online or via our call
centers, but our focus is on driving more business online to achieve the
anticipated cost efficiencies of electronic booking.



During the six-month period some 8.1 million users visited our sites (2001: 2.3
million), and the number of annual transactions increased to 182,600, an
increase of 80% on the same six month period in the previous year (2001:
101,200).





Launch of onlinetravel.com



Our model enables large portals, media groups and retailers to provide e-travel
services tailored to the needs of their customers. As the number of major media
and retail clients continues to grow, so does the awareness and value of our OTC
or Online Travel brand. The recent acquisition of the domain name
onlinetravel.com provides us with greater visibility on client sites and acts as
an 'umbrella brand' for other sites owned by the group, including
bargainholidays.com, a2btravel.com, ferrybooker.com and our specialist ski, golf
and dive sites.





Technology and product development



Our aim is to build the most diverse and comprehensive range of online travel
products in Europe. We continue to add to our range and are constantly improving
the functionality of our core booking engines to keep us ahead of the
competition. We aim to continue to increase the range and quality of our
products, including new and exclusive products such as dive specialist PADI, and
US property management group Resortquest, plus more integration with extra
components including golf, ski and activity holidays.



In this period our most significant development was the launch of '
Build-Your-Own' ('BYO'). This is a proprietary system that enables our customers
to build their own travel itinerary and package component parts of a holiday,
including flights, hotels and villas. Users can check availability of each
component at the best rate available, often as part of a package whereby users
will see a package price rather than component prices. This allows the consumer
to save on the aggregate cost of each component. We believe this to be the first
such system launched in Europe in this sector.



Since its initial launch last autumn this BYO technology has been significantly
improved. We have streamlined the user interface, which makes the product easier
to navigate and therefore enhances the user's experience. The holiday search has
been made significantly faster as it now has the ability to simultaneously
search hotel and flight suppliers. It uses a new platform for managing the
external host supplier connections and uses data caching algorithms. Our new
data caching system, which allows us to reuse search results, will dramatically
speed up response times and ease of booking.



During this period we have also enhanced our flight and hotel booking systems,
built an integrated online ferry booking system, enhanced our car rental search
engine, and increased the range of charter-based package holidays with improved
user interface and faster response times.









New order processing and administration system



As we have such a diverse range of travel products with different sources of
sales and cost data, we have devised a bespoke order processing and travel
accounting system thatautomates many of our accounting and fulfillment
processes. The first phase of this new order processing system that
automatically records online bookings in the accounting system has been in use
since January 2002. We began using the new order processing system for call
center support staff at the end of the interim period. We believe this will
entail greater administration and management reporting efficiencies.





Leisure and new media

As expected, our leisure and new media divisions experienced the highest rates
of growth. During the period sales increased to £21.7 million, representing
growth of 150% compared with the previous year (2001: £8.7 million).



A large element of the growth in online transactions and revenues is due to the
new flights and BYO holiday sales. Had it not been for technical problems with
connectivity to airline booking systems and connectivity to hotel wholesalers
host systems during the period, our growth could have been higher. However,
these connectivity issues have largely been resolved with a new range of
products providing more stableconnectivity and speed.

The performance of our Winter Sports division was a little disappointing, in
part due to poor snow conditions in many European Ski resorts.



We continue to integrate the technology on our specialist sites, including
bargainholidays.com (charter packages) and our specialist ferry, ski, golf, dive
and activity sites, into our client sites.



Corporate travel

The events of September 11 and the general economic slow down in the US has had
a significant impact on the corporate travel sector. As a result of this, and
the general reduction in average transactional values due to price changes, our
gross sales reduced by 3% to £9.1 million (2001: £9.4 million). Whilst we are
disappointed not to have increased this business, we believe our business
division to have recovered relatively well in comparison to the sector
generally.



We hope the acquisition of Travelstore.com will increase sales in a business
where it is important to have critical mass. The increased interest in our
online travel management systems, coupled with the recent renewal of long-term
contracts with The Medical Research Councils, Inter Public Group and new
contracts with Exel and Operations Abroad Limited, place us on a sound footing
for the next six months.



Trade concessions

We believe the impact of redundancies in the European travel sector has
adversely affected our trade concession business. This resulted in a reduction
of 3% in our concession business to £4.9 million (2001: £5.1 million).



We are encouraged that over 30% of concession transactions are now online and we
expect to benefit from cost efficiencies as this trend continues.



Acquisitions and Integration



On 7th June 2002, the Company acquired the entire issued share capital of
Travelstore.com Limited ('Travelstore') and its wholly owned subsidiaries:
Oxford Technology Solutions Limited ('OTS'), Amersham Travel Limited and
Equator-net Limited for a consideration of £2.1 million.



Travelstore provides travel management services to the business travel sector.
Unaudited results for the year to 31 March 2002 show that Travelstore generated
gross sales of £18.1 million with a gross margin of £1.7 million, and a loss
before interest, tax and depreciation of £73,000. OTS, which provides booking
technology and Internet based travel management systems, made a loss in the year
to 31 March 2002 before interest, tax and depreciation of £1.9 million.
Travelstore and OTS together incurred non-continuing board and advisor costs of
£0.5 million and technology costs of £0.8 million. The employee head count in
the two companies has reduced from ninety in April 2001 to less than fifty at
the time of acquisition. We intend to combine Travelstore with our existing
business travel division, Joint Venture Travel, and will use Travelstore.com as
the principal brand for existing and new business travel customers.





Share Capital



On 11th February 2002, OTC placed 10,882,345 new Ordinary Shares at a price of
17 pence per share, raising £1.85 million gross. This was to comply with Travel
Regulatory working capital requirements based on the growth expectations to
March 2003 for the company. The proceeds of the Placing, net of expenses have
been used for the working capital purposes. The 10,882,345 new Ordinary Shares
were admitted to the Alternative Investment Market of the London Stock Exchange
on 15th February 2002.

Since the period-end, on 7th June 2002 OTC acquired the entire issued share
capital of Travelstore.com Limited , Oxford Technology Solutions Limited ,
Amersham Travel Limited  and Equator-net Limited for a consideration of £2.1
million which was satisfied by the issue of 7.2 million new ordinary shares of
1p. The 7.2 million new Ordinary Shares were admitted to the Alternative
Investment Market of the London Stock Exchange on 14th June 2002.





Directors


Alan Judd, Executive Director and former Chairman, did not seek re-election at
the AGM on 20th March 2002 and accordingly ceased to be a director of the
Company. We would like to thank Alan, who as a founder and former Chairman had
made a large contribution to building OTC.

Kyril Saxe-Coburg, a Non-Executive Director, resigned from the Board on 20th
March 2002. Kyril had contributed to the development of OTC over the past
eighteen months for which we are grateful and we thank him for his counsel.



We believe the remaining Board, consisting of four executive and three
non-executive Board members, is more appropriate for a Company of our size.





Outlook



The period has seen the actual number of sales transactions increase by 80% on
the same period last year, with more than three times the number of transactions
made online.  The value of gross leisure sales has increased by 2.5 times, and
while lower supplier prices have reduced our average sales value per
transaction, we aim to build on this growth by selling more products to our
existing customers and by selling to new customers from new Strategic Partners.



We expect an increased proportion of our gross sales to be through the new
Build-Your-Own holiday system, which generally generates higher gross profit
margins than flight only bookings. With an increasing amount transacted online,
we aim to achieve a proportionate reduction in costs as a percentage of sales.



The acquisition in June of Travelstore.com, one of Europe's major Internet
business travel providers, has put us in a good position to benefit from the
anticipated increase in demand for Internet based travel management systems, as
customers look at more ways of reducing their travel costs.



Since the end of the period we have successfully launched our new umbrella
brand, onlinetravel.com, through our media partners and we expect this to
increase client and customer awareness.



The online travel sector is going through a period of corporate consolidation
and we shall continue to monitor this closely.




Mark Jones

Chief Executive                                                      8 July 2002




ONLINE TRAVEL CORPORATION PLC



CONSOLIDATED PROFIT AND LOSS ACCOUNT

For 6-month period ended 30 April 2002


                                                                                     2002          2001
                                                                                    £'000         £'000
                                                                              (unaudited)   (unaudited)
Turnover                                                                         
Group and share of associates                                                      32,866        20,302           

Turnover (excluding share of associates)                                           

Continuing                                                                         30,148        16,739
Acquisitions                                                                            -         1,061
                                                                              
                                                                                   30,148        17,800
Cost of sales                                                                    (25,647)      (14,858)
Gross profit                                                                        4,501         2,942

Selling and distribution costs                                                    (2,132)       (2,161)
Administration costs                                                              (3,361)       (2,393)

Operation (loss)/profit

Continuing                                                                          (992)       (1,622)

Acquisitions                                                                            -            11
                                                                              
Total operating loss                                                                (992)       (1,612)

Share of operating profit/(loss) of Associated Companies                                7          (25)
                                                                              
                                                                                    (985)       (1,637)

Interest receivable                                                                    16            42

Interest payable                                                                        -           (3)
                                                                              
Group loss on ordinary activities before taxation                                   (969)       (1,598)

Taxation                                                                                -             -
                                                                              
Retained loss for the financial period/year                                         (969)       (1,598)

Loss per share                                                                      Pence         Pence

- basic                                                                             (1.1)         (2.3)

- fully diluted                                                                     (1.1)         (2.1)




ONLINE TRAVEL CORPORATION PLC



GROUP BALANCE SHEET

As at 30 April 2002




                                                 2002                           2001
                                                £'000          £'000           £'000          £'000
                                          (unaudited)    (unaudited)     (unaudited)    (unaudited)
Fixed assets

Intangible assets - goodwill                                   5,152                          2,150
Tangible assets                                                1,994                          1,392
Investment in associated companies                               210                            189
                                                               7,356                          3,731


Current assets
Debtors                                         4,893                          4,848
Cash at bank and in hand                        1,672                          2,102
                                                6,565                          6,950

Creditors: amounts falling due within one year (6,121)                       (5,452)

                                              
Net current assets/(liabilities)                                 444                          1,498
                                                               7,800                          5,229

Creditors: amounts falling due after more than
one year                                                           -                              -

                                                                                              
                                                               7,800                          5,229




Capital and reserves (equity)

                                                               

Called up share capital                                          919                           691
Share premium account                                         11,407                         7,125
Capital reserve                                                1,499                         1,499
Profit and loss account - deficit                            (6,025)                        (4,086)
Equity shareholders' funds                                     7,800                          5,229



Note - Creditors due within 1 year include unsecured convertible loan stock due
in November 2002 in consideration for acquisition of EMAP Digital Travel assets.



The Board approved the interim financial statements on            5 July 2002.


Notes:



1.   The accounting policies that have been applied to the unaudited results are
consistent with the latest published audited accounts.



2.       The Directors do not propose to pay a dividend at this time.



3.       Basic earnings/(loss) per share has been calculated on the following
basis:


      Earnings/(loss) per share                                  6 Month                         6 Month
                                                            Period ended                    Period ended
                                                           30 April 2002                   30 April 2001


Attributable profit/(loss) (£'000)                                 (969)                         (1,598)
Weighted average number of ordinary                           85,521,779                      68,810,406
shares in issue ('000)
Number of ordinary shares in
issue and over which options                                  98,443,376                      74,768,442
have been granted
Basic earnings/(loss) per share                                   (1.1)p                         (2.32)p
(pence)
Fully diluted earnings/(loss)                                     (1.1)p                         (2.14)p
per share (pence)




4.       A copy of the Interim Trading Statement for the 6 months ended 30 April
2002 is due to be sent to all shareholders on or about Tuesday 9th July 2002.
Copies of this announcement will be available, free of charge for a period of
one month, from the company's Nominated Adviser:



Noble & Company Limited
1 Frederick's Place
London EC2R 8AB



8 July 2002



END





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