30th Jan 2006 07:01
Travelzest plc30 January 2006 Date: 30 January 2006On behalf of: Travelzest plcEmbargoed until: 0700hrs Travelzest plc Preliminary Results Travelzest plc, the British travel group offering specialist travel programmesand services, today announces its preliminary results for the year ended 31October 2005. The highlights are: • Pre tax profit increased to £ 58,787 (2004: loss of £14,326) • Basic earnings per share up to 0.81p (2004: loss of 0.45p) • Chris Mottershead, former MD of TUI UK, appointed Chief Executive in April 2005 • Shares commenced trading on AIM on 3 October 2005 and simultaneous share placing to raise £5.15m • Acquisition of Holiday Express Group Limited Post Balance Sheet Events: • Acquisition of Best of Morocco Limited • Colin McKinlay, currently CFO of Thomas Cook UK, to join as Group Finance Director, with effect from 1 April 2006 • Appointment of Nishma Patel to the group, who joins from Teletext Holidays where she was MD Commenting on the results, Mike Bruce-Mitford, Chairman, said: "I am pleased to report an encouraging year in which the company has made goodprogress, on a number of fronts, towards its strategic objectives of building anew travel group focused on high quality brands offering specialist holidayservices. "The directors expect to make further acquisitions during the year and haveidentified a number of potential targets that fit the group's strict acquisitioncriteria. Current trading is in line with expectations and the directors verymuch look forward to the coming year." Enquiries & Publication Quality Photographs: Travelzest plc 020 7747 7231Christopher Mottersheadwww.travelzestplc.com Redleaf Communications 020 7955 1410Emma Kane/Duncan McCormick The Group currently comprises: VFB Holidays - a long established, award winning tour operator. VFB iscurrently contracted with the owners of approximately 350 holiday cottagesthroughout France for the summer 2006 season, and has booking arrangements withover 150 hotels, most of which are privately owned and are located in rural orsemi-rural locations. VFB specialises in cottage holidays in France, but alsohas a number of other holiday programmes including: France a la Carte (hotelaccommodation), Corsica, Short Breaks, Escorted Tours and River Cruises. VFB currently takes over 10,000 bookings per annum, representing some 24,000passengers. VFB has a first-rate reputation in the market, with high levels ofcustomer loyalty and high industry ratings (8th Best Tour Operator and 2nd BestShort Break Company in the Observer Travel Awards). Holiday Express - one of the UK's leading on-line travel agents. HolidayExpress specialises in on-line travel services and online travel sales,generates virtually all of its sales via the web. Holiday Express owns a numberof travel website domain names, including: - www.holiday.co.uk- www.flight.co.uk- www.discountholidays.com The sites operate as 'neutral' travel agents providing package holidays, charterflights and ski booking services, which account for the vast majority of itssales. Holiday Express's main suppliers are the 'big four' tour operators,namely Thomas Cook, Airtours (MyTravel), First Choice and Thomson (TUI) Holiday Express has been the subject of various industry awards and nominations Best of Morocco is a tour operator specialising in high quality, tailor-madeholidays to Morocco for individuals or small groups. It provides apersonalised service and its highly experienced and knowledgeable staff helpeach customer select the hotels / resorts from their large range which areappropriate for the customer's desired style of holiday. Best of Morocco is thepremier agent for the Marathon des Sables, a foot race that takes place inMorocco in April each year, covering some 230km. Best of Morocco provides thelargest contingent of runners for the race each year and revenue generated forthe company provides a firm foundation for sales each year. CHAIRMAN'S STATEMENT I am pleased to report on an encouraging year in which the company has made goodprogress, on a number of fronts, towards its strategic objectives of building asubstantial travel group focused on high quality brands offering specialistholiday services. Key Events The most notable event during the year was the appointment, in April, of ChrisMottershead, former Managing Director of TUI UK, as Chief Executive. At that time, the company's name was changed from VFB Group plc to Travelzestplc. On 3 October, the company's shares commenced trading on AIM following the movefrom OFEX and the company announced the acquisition of Holiday Express Ltd, amajor online holiday retailer. The move onto AIM was made to facilitate thecompany's strategy of rapidly becoming a consolidator of niche businesses withinthe travel industry. £5.15 million (before expenses) was raised through aplacing of 4,087,477 Ordinary Shares at a price of 126p per share, to fundacquisitions. In addition to the placing, the company issued 624,217 ordinaryshares arising as part of the consideration for Holiday Express, 450,000ordinary shares arising as a result of the conversion of deferred shares on aone for one basis (there are no more deferred shares in issue) and furtherwarrants to warrant holders as a result of the conversion of the deferredshares, the issue of the initial consideration shares and the issue of theplacing shares. Immediately following the year end, the company also acquired Best of MoroccoLimited. Both acquisitions are expected to enhance earnings during the currentyear to 31 October 2006. Financials Following my April statement, various initiatives taken at VFB Holidays haveresulted in a significant turnaround of the business in the last six monthssince Chris Mottershead's appointment. This improvement in the group's fortunesreturns it to levels of profitability in line with the group's expectations.This significant achievement is masked by the inevitable increase in costsincurred by the group through its recruitment of key personnel to manage futuregrowth as well, of course, as the move to AIM. However, it accounts for theturnaround in the group's performance from a £14,326 loss a year ago to apre-tax profit of £58,787 in 2005 against the background of an increase incosts. People I am pleased to report that David Powell of Holiday Express Limited, havingtaken shares in Travelzest at the time of acquisition, is to stay on, while Bestof Morocco Limited has a new Managing Director, Steve Diederich, formerly MD ofLaskarina Holidays Limited and previously with Kuoni Travel Limited, whoreplaces the former, retiring owner. The Managing Director of VFB Holidays, JohnKirk, has also retired, after 25 years with that company, and I welcome thisopportunity to acknowledge his inestimable contribution to the outstandingreputation achieved by the French specialist over so many years. My fellowdirectors join me in wishing him every success with his future plans. I am also pleased that financial management of the group will be placed in thehands of a new, very experienced, Group Finance Director. As announced lastmonth, Colin McKinlay, currently Chief Financial Officer of Thomas Cook UK, willjoin the group on 1 April 2006 and is expected to play a key role inimplementing the aggressive growth strategy designed to build the group into oneof the pre-eminent players in the British travel industry. The group will be further strengthened this year with the appointment of NishmaPatel who joins Travelzest from Teletext Holidays, a subsidiary of AssociatedNewspapers of which she was a Board director. Current Trading and Outlook The directors confidently expect to make further acquisitions during the year.They have identified a number of potential targets that fit the group's strictacquisition criteria and which would significantly enhance group earnings. Current trading is in line with expectations and the directors very much lookforward to the coming year. M. J. Bruce-MitfordChairman Consolidated profit and loss account for the year ended 31 October 2005 2005 2004 £ £ Total transaction valueContinuing operations 11,140,658 11,492,649 - Acquisitions 1,074,822 - 12,215,480 11,492,649 Group turnoverContinuing operations 11,140,658 11,492,649 - Acquisitions 151,315 - 11,291,973 11,492,649 Cost of sales (8,351,725) (8,809,508) Gross profit 2,940,248 2,683,141 Administrative expenses (3,006,885) (2,794,282) Operating lossContinuing operations (37,269) (111,141) - Acquisitions (29,368) - (66,637) (111,141) Net interest receivable 125,424 96,815 Profit/(loss) on ordinary activities before taxation 58,787 (14,326) Tax on profit/(loss) on ordinary activities (31,820) 1,388 Profit/(loss) retained for the financial year 26,967 (12,938) Earnings per shareBasic 0.81p (0.45p)Diluted 0.70p (0.45p) The group has no recognised gains or losses other than the results for the yearas set out above. Consolidated balance sheet for the year ended 31 October 2005 2005 2004 Note £ £ Fixed assetsIntangible fixed assets 3,915,764 -Tangible assets 698,807 130,018 4,614,571 130,018Current assetsDebtors 549,159 296,065Cash at bank and in hand 5,753,193 1,692,472 6,302,352 1,988,537Creditors: amounts falling due within one year (2,979,527) (751,545) Net current assets 3,322,825 1,236,992 Total assets less current liabilities 7,937,396 1,367,010Creditors: amounts falling due after more than one year (1,213,798) - Provisions for liabilities and chargesDeferred taxation (18,000) - 6,705,598 1,367,010 Capital and reservesCalled-up equity share capital 162,445 66,140Share premium account 4,441,287 -Merger reserve 798,511 24,482Profit and loss account 1,303,355 1,276,388 Shareholders' funds 6,705,598 1,367,010 Consolidated cash flow statement for the year ended 31 October 2005 2005 2004 £ £ Net cash (outflow) /inflow from operating activities (132,417) 84,922 Returns on investments and servicing of financeInterest received 125,972 97,745Interest paid (548) (930) Net cash inflow from returns on investments and servicing of finance 125,424 96,815 Taxation (3,100) (88,280) Capital expenditurePurchases of tangible fixed assets (35,853) (50,919)Receipts from sale of fixed assets 5,105 - Net cash outflow from capital expenditure (30,748) (50,919) Acquisitions Purchase of subsidiary undertakings (1,814,560) -Net cash acquired with subsidiary 1,360,520 - Net cash outflow for acquisition (454,040) - Equity dividends paid - (107,138) Cash outflow before financing (494,881) (64,600) FinancingIssue of equity share capital 4,525,108 - Net cash inflow from financing 4,525,108 - Increase/(decrease) in cash 4,030,227 (64,600) NOTES TO THE ACCOUNTS Basis of preparation The preliminary announcement has been prepared under the historical costconvention, and in accordance with applicable accounting standards. The principal accounting policies of the group have remained unchanged fromthose set out in the group's 2004 annual report and financial statements. Basis of consolidation The preliminary announcement consolidates the financial statements of thecompany and of its subsidiary companies drawn up to 31 October 2005.Intra-group transactions are eliminated on consolidation and all figures relateto external transactions only. Acquisitions of subsidiaries are dealt with bythe acquisition method of accounting except for those qualifying as groupreconstructions where merger accounting is used. The results of newly acquiredcompanies are consolidated from the date that control passed. Notes to the statement of cash flows Reconciliation of operating loss to net cash (outflow)/inflow from operatingactivities 2005 2004 £ £Operating loss (66,637) (111,141)Amortisation 16,384 -Depreciation 74,390 80,589Increase in debtors (50,946) (84,848)(Decrease)/increase in creditors (105,608) 200,322 Net cash (outflow)/inflow from operating activities (132,417) 84,922 Reconciliation of net cash flow to movement in net funds 2005 2004 £ £Increase/(decrease) in cash in the period 4,030,227 (64,600) Change in net funds 4,030,227 (64,600) Net funds at 1 November 2004 1,692,472 1,757,072 Net funds at 31 October 2005 5,722,699 1,692,472 Analysis of changes in net funds At At 1 Nov 2004 Cash flows 31 Oct 2005 £ £ £ Net cash:Cash in hand and at bank 1,692,472 4,060,721 5,753,193Bank overdraft - (30,494) (30,494) Net funds 1,692,472 4,030,227 5,722,699 Publication of non-statutory accounts The financial information set out in this preliminary announcement does notconstitute statutory accounts as defined in section 240 of the Companies Act1985. The balance sheet at 31 October 2005 and the profit and loss account, cash flowand associated notes for the year then ended have been extracted from thegroup's 2005 statutory financial statements upon which the auditors opinion isunqualified. These financial statements have not yet been delivered to the registrar ofcompanies. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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