Final Results

31 March 2011

Journey Group plc

Annual Results

for the year ended 31 December 2010

Journey Group plc ("Journey Group" or the "Group") a leading provider of in-flight products, catering and media services to the airline and travel industry today announces its results for the year ended 31 December 2010.

Highlights

·; Restructuring and strategic re-positioning complete and Group now positioned for growth.

·; EBITDA* before exchange differences unchanged on a like for like basis at £0.6 million.

·; Los Angeles Division EBITDA* rose to £1.4 million from £0.7 million in 2009 after an intergroup charge of £0.2 million for royalties not charged in 2009.

·; Investment in Alpha-Airfayre Limited sold for £3.5 million bringing the total cash realised from the disposal of Air Fayre Limited's operations to £8.5 million.

·; Net debt reduced to £0.2million.

·; Re-financed with £4.5 million three year facility of which £3.0 million was subsequently repaid. Intention to refinance the remainder to reduce funding costs and provide the basis for debt capacity in the USA.

Stephen Yapp, Chairman commented "2010 was a transformational year for the Group. Its activities were streamlined and successfully re-positioned for growth and for the first time in recent years, the Group has a solid financial position with very little net debt. The Los Angeles Division has some significant growth opportunities, whilst the Products Division can look forward to both recovery as well as growth. We anticipate that 2011 will be the year in which we will build the foundations for growth in 2012 and beyond. As a result, your Board is confident of the future prospects of the Group".

For further information please contact:

Stephen Yapp

Journey Group plc

Tel: +44 (0) 20 8606 2000

[email protected]

Carl Fry

Journey Group plc

Tel: +44 (0) 20 8606 2000

[email protected]

Peel Hunt LLP (Nominated Advisor & Broker)

Daniel Harris

Tel: +44 (0) 20 7418 8900

*Earnings before interest, tax, depreciation and amortisation.

EXECUTIVE CHAIRMAN'S LETTER TO SHAREHOLDERS

Dear Shareholder

INTRODUCTION

2010 was a transformational year for the Group in which significant progress was made in line with the confidence I expressed in my last annual statement. This has been achieved against a background of continuing global economic uncertainty and difficult conditions that still prevail in the Group's principal market place, the international airline industry. The Group's activities have been streamlined and successfully re-positioned for growth and for the first time in recent years, the Group has a solid financial position with very little net debt. The Los Angeles Division delivered a strong performance and is strategically well placed to expand its activities.

The key highlights of the year were:

·; Restructuring and strategic re-positioning of the Group now complete and positioned for growth.

·; Adjusting for the transfer of businesses to the Alpha-Airfayre Limited joint venture, on a like for like basis, EBITDA before exchange differences was unchanged at £0.6 million.

·; In its second full year of operation, the Los Angeles Division EBITDA rose to £1.4 million from £0.7 million in the prior year after an intergroup charge of £0.2 million for royalties not charged in the prior year.

·; The Group's investment in the Alpha-Airfayre Limited joint venture was sold for £3.5 million bringing the total cash realised from the disposal of Air Fayre Limited's operations to £8.5 million.

·; Net debt reduced to £0.2million.

·; Re-financing achieved with a new £4.5 million three year facility of which £3.0 million was subsequently repaid. Intention to refinance the remainder to reduce funding costs and provide the basis for debt capacity in the USA.

Market conditions in the international airline industry improved in 2010 over 2009. The demand for scheduled air traffic increased by 8.2 per cent. for passengers and by 20.6 per cent. for freight to levels that modestly exceeded pre-recession levels of early 2008. Load factors for both passengers and freight also improved as demand growth exceeded capacity increases. Regionally, performance varied with Middle Eastern and Asia-Pacific carriers performing the strongest and European carriers showing markedly lower growth. Airline profit margins, however, remained low resulting in continuing pricing pressure on the Group's services. The industry outlook for 2011 is mixed.

STRATEGIC REVIEW

During the last 18 months a process of strategic review and re-positioning has been undertaken to focus the Group on its business segments offering the greatest potential for growth, to build strategies for growth within these areas and ensure that the Group has sufficient operational and financial resources to deliver on these strategies.

An initial consequence was the decision made in the previous year to dispose of the activities of Air Fayre Limited, International Catering Limited and Elev8 Retail Limited to the Alpha-Airfayre Limited joint venture. This step was taken to enhance the position of the combined business in the very competitive London Heathrow market and to release cash to reduce borrowings. During the current year it was determined that the London Heathrow market would continue to suffer fierce competition and that the joint venture would be unlikely to deliver an acceptable financial performance and value to the Group. During 2010 the Group's share of the net loss of the joint venture increased to £0.6 million. Accordingly, a further decision was made to dispose of the investment in the joint venture. The Group's investment was sold for consideration of £3.5 million, which enabled net debt to be reduced significantly. This disposal brought the total cash realised from these businesses to £8.5 million. An exceptional loss on disposal was incurred of £1.1 million.

Your Group now comprises four businesses organised into three Divisions all serving the international airline industry as their principal market place, as follows:

·; Los Angeles Division - Air Fayre CA Inc provides in-flight catering services primarily to United Airlines in Los Angeles and has established a strong reputation for reliability and food quality. Air Fayre CA's facility has significant capacity for organic growth and new customer opportunities have been identified at LAX international airport and in three nearby regional airports. The Division has also established and is pursuing prospects for new facilities that, if converted, would lead to step change growth in the medium term. The catering business model has been developed to a format easily transferrable to new facilities.

·; Products Division - This comprises Watermark Limited, which provides in-flight cabin products, and MNH Sustainable Cabin Services Limited, which provides recycling services for in-flight cabin products. Watermark is a leader in its field and enjoys a reputation for innovation. The recovering international airline market provides a platform for recovery, but additionally new revenue opportunities have been identified within the hotels and cruise ship markets. MNH's recycling services are increasingly in demand as airlines look to reduce their waste profile and achieve the economies that recycling can bring, particularly through a bundled procurement and recycling programme in conjunction with Watermark.

·; Services Division - Media on the Move Limited provides in-flight media mainly to the international airlines. New opportunities are being pursued within on-board retailing of media products and within specialist marketing services by leveraging off Media's distribution network and publisher relationships.

BORROWING FACILITIES

In order to ensure the required finance is available to take advantage of the opportunities available to the Group, a key part of our strategy has been to secure term loan facilities. Accordingly, against a difficult lending environment, and as announced on 3 September 2010, the Group entered a £4.5 million three year term loan with Taurouge II SARL, which replaced the expiring on-demand bank facilities provided by Barclays Bank. This refinancing resulted in the termination of the substantial monthly facility fees being charged by Barclays Bank and which have been treated as exceptional items in these results. Under the new facility, warrants have been issued over 35,185,825 new ordinary shares, representing approximately 10 per cent. of the Group's fully diluted share capital, exercisable at 1 pence per share on or before 2 September 2020.

The longer term nature of the new facility provides the Group with a stable capital base. However, following the disposal of the Group's interest in the Alpha-Airfayre Limited joint venture, £3.0 million of the Taurouge II SARL facility became repayable, leaving £1.5 million outstanding that is repayable on 2 September 2013. In view of the high interest rate under the facility and consistent with the Group's plans to be in a position to fund growth in the Los Angeles Division, it is the Company's intention to refinance the remaining £1.5 million as early as circumstances permit in 2011. A replacement term facility is being sought with a lower funding cost that will leave the operations of the Los Angeles Division unencumbered and so provide the basis for significant debt capacity as growth opportunities are secured.

RESULTS

The results for the year were as follows:

The results demonstrate an underlying improvement in the Group's performance. The disposal of the activities in November 2009 of Air Fayre Limited, International Catering Limited and Elev8 Retail Limited to the Alpha-Airfayre Limited joint venture, the subsequent disposal of the Group's interest in the joint venture in November 2010, one-off costs in the Products Division and the steps taken to re-finance the Group's activities on to a conservative footing led to a significant reduction in turnover, lower EBITDA and material exceptional costs. However, excluding the one-off impact of these items, the Group made significant progress reflecting the strong performance in the Los Angeles Division.

Due to the disposals to the Alpha-Airfayre Limited joint venture, turnover fell from £74.5 million to £37.2 million and EBITDA before exceptional items and share based payments fell to £0.7 million from £1.2 million. However, adjusting for these disposals, on a like for like basis, EBITDA before exceptional items and share based payments was unchanged. The improved performance was reflected in a significantly reduced operating loss before exceptional items and share based payments of £0.2 million compared with the loss of £0.9 million in the previous year.

Exceptional items remained high, amounting to £2.7 million. They mainly comprised banking costs of £1.6 million, a loss on disposal of joint venture of £1.1 million and reorganisation costs of £0.3 million that primarily related to the Products Division, offset by the recovery of PAYE and National Insurance of £0.2 million. Included within banking costs was a non-cash, fair value charge of £0.8 million relating to the warrants issued to Taurouge II SARL in connection with the early settlement of Tranche A of the £4.5 million three year term loan entered on 3 September 2010. The remainder of the banking costs comprised £0.4 millionrelating to the substantial monthly facility fees charged by Barclays Bank and £0.4 million relating to the costs incurred in connection with the Taurouge II SARL facility.

The Group's share of the net loss of the Alpha-Airfayre Limited joint venture amounted to £0.6 million compared with £0.4 million last year. Net interest payable fell by £0.2 million to £0.4 million. There was a net loss before taxation of £4.0 million compared with a loss of £4.7 million in the previous year. The basic loss per share was 1.4 pence compared with a loss of 1.6 pence in the previous year.

Net debt fell to £0.2 million from £0.5 million, although the prior year included the temporary benefit of £1.4 million owing to the Alpha-Airfayre Limited joint venture under transitional arrangements. Adjusting for this amount the underlying reduction in net debt would have been £1.7 million.

LOS ANGELES DIVISION

The Los Angeles Division produced a strong performance with EBITDA doubling even after an intergroup charge of £0.2 million for royalties in relation to use of the Air Fayre business model not charged in the prior year. The facility saw organic growth with the number of flights served increasing to 26,500, or an average of 73 per day, compared with 25,568 flights, or an average of 70 per day, in the prior year without, in either year, a single safety incident. The number of meals served increased to 1,878,097 from 1,672,500 last year. Some 59 million airline passengers passed through Los Angeles international airport in 2010, a 4.5 per cent. increase over 2009. Turnover, nevertheless, was unchanged as revenue growth was offset by a change in the food supply arrangements towards free issue from United Airlines and away from third party purchases that are charged to United Airlines.

The facility met or exceeded all of its performance goals of reliability (on time performance) and quality of food as perceived by passenger ratings. In recognition of the high standard of service delivered to United Airlines and as part of the United Annual 2010 Caterer Recognition Program, the facility was awarded Best Domestic UP Meal Score Hub Kitchen, Best International UP Meal Score Hub Kitchen and Best Reliability Hub Kitchen. This was a notable achievement for a catering facility in its second year of operation.

It was a defining year for the Los Angeles Division as it established itself as a premier service provider to United Airlines and within the industry generally. The Division has attracted interest from a number of airlines operating at LAX international airport and from the three nearby regional airports and, accordingly, with its significant capacity for organic growth along with its refrigerated truck fleet we are optimistic of increasing the revenue base during 2011. Looking further ahead, opportunities have been identified to establish new facilities in other US cities and these prospects will be progressed over the coming year.

PRODUCTS DIVISION

The Products Division had a challenging year with revenue declining and EBITDA before exchange differences falling into a loss. Flight cancellations due to the BA crew strike and the ash cloud had a negative effect on revenues, although EBITDA was driven into a loss primarily because of the one-off impact of significantly higher air freight costs to mitigate a supply disruption to a UK customer and significantly increased cotton prices impacting gross margins on linen products. Overheads were lower due to the impact of the restructuring implemented over the last few years, but gross margins continued to be under pressure from airline cost reduction programmes. A geographically broader supply base is being developed to mitigate this challenge.

Watermark's underlying business continued to strengthen with growth opportunities being exploited in the Australasian region and in the USA. In Australasia, contract wins with new customers Jetstar and Virgin Blue will have a positive impact in 2011, whilst an expanded relationship with Qantas and Air New Zealand will also bring further benefits. In 2011 we anticipate new business opportunities will emerge, particularly in Australasia, the Middle East, where we see significant potential, and in the America's, although biased towards the second half of the year. In the broader travel sector, new revenue opportunities have been identified within the hotels and cruise ship markets and steps are being taken to develop within them. After a number of difficult years, Watermark is now well positioned for recovery and to take advantage of its growth opportunities.

MNH Sustainable Cabin Services continued to strengthen its relationships with its key customers. During the year an additional team member was recruited in Australia to further expand the partnership with Qantas and an innovative new contract model was agreed with Virgin Atlantic by bundling recycled and newly procured product into a single offering. During 2011, MNH will to continue to focus on the opportunities to further expand its unique model.

SERVICES DIVISION

Following the transfer of the activities of Air Fayre Limited, International Catering Limited and Elev8 Retail Limited to the Alpha-Airfayre Limited joint venture, the remaining business within the Services Division is Media on the Move Limited. The reduction in turnover arose substantially from these business transfers. EBITDA before exchange differences was lower for the same reason, although was offset by the release of accruals following settlement of the remaining affairs of these companies. EBITDA also fell due to a product marketing contract coming to an end, but benefitted from an intergroup royalty charge to the Los Angeles Division for the use of the Air Fayre business model.

Media on the Move Limited experienced a tougher year than expected due to difficult market conditions. Its turnover rose modestly to £2.6 million from £2.5 million. New business wins included Sky Teams at Heathrow, Cross Country Rail and Thomson Fly Retail. In 2011, Media's focus will be on building its on-board media retailing activities and developing specialist marketing services that leverage off Media's distribution network and publisher relationships.

CENTRAL COSTS

Central costs fell to £0.7 million from £0.8 million at the operating level before exceptional items. As noted in the Group financial statements, the basis on which central costs have been allocated has been amended in order to charge the part relating to management of the Group's businesses to the Group's three Divisions and, accordingly, the comparative figures have been re-stated on a consistent basis.

BOARD

Following completion of the Group's strategic re-positioning and with its financial base now secure, Danny Bernstein and David Jennings have decided to retire from the Board at the coming Annual General Meeting. Danny has been a Non-executive Director for seven years and during that time the Group has benefitted from his considerable airline industry knowledge. He has served on the Audit and Remuneration Committees as well as having acted for a period of time as Chairman of the Board. David has been a Non-executive Director for three and a half years and has served on the Audit and Remuneration Committees. During the past three difficult years for the Group, David's experience and advice in the areas of business and financial management have contributed significantly to the Group's recovery. On behalf of the Board I would like to thank them both for their contributions and wish them well for the future.

OUTLOOK

With the strategic review and re-positioning completed and its strong financial base, the Group is now well positioned for the future. Despite challenging overall market conditions, current trading is good. The Los Angeles Division has some significant growth opportunities, whilst the Products Division can look forward to both recovery as well as growth. We anticipate that 2011 will be the year in which we will build the foundations for growth in 2012 and beyond. As a result, your Board is confident of the future prospects of the Group.

Stephen Yapp

Executive Chairman

CONSOLIDATED INCOME STATEMENT

for the 12 months to 31 December 2010

CONSOLIDATED INCOME STATEMENT

for the 12 months to 31 December 2009

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the 12 months to 31 December 2010

CONSOLIDATED BALANCE SHEET

as at 31 December 2010

CONSOLIDATED CASH FLOW STATEMENT

for the 12 months to 31 December 2010

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the 12 months to 31 December 2010

* Total equity is all attributable to shareholders of the parent.

NOTES TO THE PRELIMINARY ANNOUNCEMENT FOR THE 12 MONTHS TO 31 DECEMBER 2010

1. Basis of preparation and statement of compliance

The financial information contained in this preliminary announcement does not constitute the Group's statutory financial statements for the year ended 31 December 2010 or 2009, but is derived from these financial statements. The financial statements for the year ended 31 December 2009 have been delivered to the Registrar of Companies. 

The financial statements for the year ended 31 December 2010 have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union and the Group has complied with International Financial Reporting Standards as issued by the IASB. The financial statements for the year ended 31 December 2010 will be forwarded to the Registrar of Companies following the Company's Annual General Meeting. The Auditors have reported on these financial statements; their reports were unqualified and did not contain statements under Section 498(2) or (3) of the Companies Act 2006.

In preparing the financial statements the Directors are required to make judgements and estimates in applying accounting policies. The most significant areas where judgements and estimates have been applied are as follows:

Judgements

·; The Directors consider the expected life of the Taurouge II SARL facility to be shorter than its contractual term. £3,000,000 of the facility was repaid on 26 November 2010 and at the balance sheet date it was the Company's intention to refinance the remaining £1,500,000 of the facility given its high interest rate as early as circumstances permit in 2011. As such the amortisation period has been accelerated for the costs related to the facility to reflect its expected life.

·; Cash and short-term deposits include a cash deposit of £400,000 that at 31 December 2010 was restricted. The deposit is held as collateral for the obligations of the Company to Taurouge II SARL under the three year facility entered on 3 September 2010, although with the consent of Taurouge II SARL it may be applied in funding the Group's operations. The Directors consider the amount should be classified within cash and short-term deposits as at the balance sheet date it was the Company's intention to refinance the remaining £1,500,000 of the facility given its high interest rate as early as circumstances permit in 2011.

·; On 30 March 2011 the Board approved a new share incentive scheme in which each of the Company's four Executive Directors participate. Whilst this scheme was under consideration during 2010 and provides for retrospective vesting covering periods prior to 31 December 2010, the Directors do not consider that a fair value charge is required under IFRS 2 as by 31 December 2010 there was, in their opinion, an insufficient probability that the scheme would be implemented in substantially the form under consideration. As such they consider that the prospective members of the scheme did not deliver services during that period in expectation of any award under the scheme. The scheme replaced a cash bonus scheme for the Executive Directors that would have paid out in the event of a change in control or the disposal of a significant proportion of the Group's business and assets.

·; In the Directors' opinion, taking into account the terms of the Taurouge II SARL facility, the warrants issued over 35,185,825 ordinary shares constitute an early settlement premium in relation to Tranche A of the facility of £3,000,000. As such, the fair value of the warrants of £846,000 has been charged to the income statement in the period in which Tranche A of the facility was repaid.

Estimates

·; In conducting the annual impairment test of goodwill, various significant assumptions have been made in arriving at the recoverable amounts of cash generating units.

·; On initial recognition the Group measured the warrants issued to the Taurouge II SARL in accordance with IAS 39 by reference to their fair value at the date on which they were granted. Judgement was required in determining the most appropriate valuation model and assumptions were necessary in arriving at the inputs into such model.

Going concern

The Directors have reviewed the Group's budgets and forecasts for the coming 12 months, which have been prepared with appropriate regard to the current macroeconomic environment and the conditions in the principal markets served by the Group. As a result, at the time of approving these financial statements, the Directors consider that the Group has sufficient financial resources to continue in operational existence for the foreseeable future and, therefore, that it is appropriate to adopt the going concern basis in preparing these financial statements.

2. Segmental reporting

The Group is organised on a worldwide basis into three primary business segments, the Products Division, the Services Division and the Los Angeles Division. These reportable segments are the three strategic divisions for which monthly financial information is provided to the chief operating decision maker.

The Products Division provides a broad range of travel supplies predominately to the international travel industry on a global basis. The Services Division was a supplier of catering to the international travel industry within the United Kingdom until the transfer of those operations to the joint venture with Alpha Flight UK Limited on 20 November 2009 and is a supplier of media services to the international travel industry in the United Kingdom. The Services Division was also engaged in supply chain management, but since 31 December 2009 this revenue stream ceased. Both the Products and Services Divisions provide marketing, design and consultancy services. The Los Angeles Division is a supplier of catering to the domestic and international travel industry within the United States of America.

Segment revenues, expenses and results include transfers and transactions between business segments and between geographical segments. Such transactions are accounted for at competitive market prices which would be charged to unaffiliated clients for similar goods. All inter-segment transactions are eliminated on consolidation. Geographical segment revenues are based on the country of domicile; information is not available to produce geographical segment revenues based on sales by destination. In relation to the year ended 31 December 2010, the basis on which corporate costs have been allocated has been amended in order to charge those costs relating to management of the Group's businesses to the Group's three business segments. Accordingly, the comparative figures have been restated on a consistent basis. The segmental results of the Products Division, the Services Division and the Los Angeles Division have been reduced, respectively, by £253,000, £432,000 and £168,000 and unallocated corporate costs have been reduced by £853,000.

Segment assets include all operating assets used by a segment and consist principally of operating cash, receivables, prepayments, inventories, goodwill and property, plant and equipment, net of allowances and provisions. Where allocation of assets across segments is not possible, they are classified as unallocated corporate assets. Geographical segment non-current assets comprise fixed assets, investment in joint venture and goodwill and are based on the location of the assets and operations.

Segment liabilities include all operating liabilities and consist principally of finance leases, accounts payable, social security and other taxes, and accrued liabilities. Where allocation of liabilities across segments is not possible, such liabilities are classified as unallocated corporate liabilities.

Segment assets and liabilities do not include receivable or payable balances in respect of income taxes.

Exceptional items relate to significant non-recurring expenditure of an unusual nature.

The Group has one customer who accounted for revenues of £14.8 million, which amounts to more than 10 per cent. of Group revenues. These revenues arise entirely in the Los Angeles Division.

Segmental information by business segment for 12 months to 31 December 2010

Segmental information by business segment for 12 months to 31 December 2009 (restated)

Segmental information by geographical region for 12 months to 31 December 2010

Segmental information by geographical region for 12 months to 31 December 2009

3. Exceptional items

Disposal of investment in joint venture

The loss comprises the provision taken in the interim results of £1,232,000 to reduce the carrying value of the investment to its recoverable value offset by a profit on disposal of £108,000. The investment in the Alpha-Airfayre Limited joint venture was sold on 26 November 2010 for a cash consideration of £3,500,000.

Banking costs

During the current year these costs comprised the following:

·; Facility fees of £368,000 in respect of the former multi-option bank facility that were significantly in excess of reasonably normal levels plus related legal fees.

·; Facility fees, structuring fees, legal fees and accountants' fees amounting to £380,000 and the fair value of warrants of £846,000 issued in connection with the £4,500,000 Taurouge II SARL facility completed on 3 September 2010. The warrants were issued to the lender and were over 35,185,825 ordinary shares. The warrants have been accounted for in accordance with IAS 39 with their fair value charged to the income statement in the period in which the associated debt was repaid. The warrants are considered to form part of the cost of the refinancing and, accordingly, the charge to the income statement relating to their initial recognition is included within exceptional items consistent with the presentation of the cash refinancing costs. The amortisation period of the cash costs of £380,000 has been accelerated to reflect the expected life of the facility.

During the prior year these costs comprised the following:

·; Facility fees, legal fees, accountants' fees, fees in respect of banking advice and the fair value of warrants in connection with the replacement on 27 August 2009 of the Company's existing bank facilities, which were due to expire on 31 August 2009, with a new multi-option facility of £5,820,500 and a bank guarantee facility of £290,000. The warrants were issued to the lender and were over 14,528,624 ordinary shares. The warrants were accounted for in accordance with IAS 39 with their fair value of £240,000 charged to the income statement in the period.

·; Fees in respect of a waiver of bank covenants.

·; Facility fees, legal fees and accountants' fees in respect of the release by the lender of charges over the assets of Air Fayre Limited, International Catering Limited and Elev8 Retail Limited enabling the disposal to proceed of their operating activities and certain net assets to the Alpha-Airfayre Limited joint venture.

·; Legal fees in connection with the security taken by the lender over the Company's investment in its US operations.

Reorganisation costs

During both 2010 and 2009, reorganisation costs primarily comprised redundancy costs and consultants fees in relation to restructuring.

Recovery of PAYE and National Insurance

This income relates to the recovery of PAYE and National Insurance over-paid in previous years.

Adjustment to executive incentive share plan award

This income is a fair value credit to adjust the matching award under the executive incentive share plan to reduce the number of shares issuable by 700,160 to 2,012,400. This credit has been included in exceptional items as the fair value charge being adjusted was previously charged as an exceptional item.

Los Angeles start-up costs

These costs related to the costs of the start-up of the Group's in-flight catering operation based in Los Angeles, USA. They comprised the excess running costs incurred in the third to fifth months of operations and compensation paid to United Airlines in respect of excess costs they incurred at start-up.

Settlement of contract

This comprised the cost of settlement of a contractual dispute with a customer in relation to a rebate.

Provision for onerous contract

This comprises a provision in relation to onerous contractual obligations in respect of office equipment.

Abortive disposal costs

This relates to the costs incurred in respect of the abortive disposal of a subsidiary company.

Loss on disposal of subsidiary

The loss arose on the disposal of the operating activities and certain net assets of Air Fayre Limited, International Catering Limited and Elev8 Retail Limited to the Alpha-Airfayre Limited joint venture.

4. Loss per share 

The loss per share is calculated by dividing the loss after tax attributable to equity shareholders (numerator) by the weighted average number of ordinary shares in issue during the year (denominator).

The diluted loss per share is calculated using the same numerator with the denominator adjusted for the dilutive effects of share options and warrants. As the Group has made a loss in the current year and previous year, no adjustment is made to the denominator for the impact of share options and warrants because the potential shares are anti-dilutive.

Adjusted loss per share, both basic and dilutive, use the denominator described in the appropriate paragraphs above. For both adjusted basic loss per share and adjusted diluted loss per share, the numerator is adjusted to remove the post tax impact of exceptional items from the calculations.

The weighted average number of shares in issue during the year was 290,572,553 (2009: 290,572,553). The following represents loss data used to calculate basic, diluted and adjusted loss per share:

5. Additional cash flow information

Cash and cash equivalents comprise:

6. Annual accounts

The annual report and accounts will be posted to all shareholders shortly and will be available from the Company's website at www.journeygroup.plc.uk and its registered office:

The Encompass CentreInternational Avenue

Heston

Middlesex

TW5 9NJ