18th May 2005 07:00
Holidaybreak PLC18 May 2005 18 May 2005: For immediate release HOLIDAYBREAK PLC Results for the six months ended 31 March 2005 Holidaybreak, the UK's leading operator of specialist holiday businesses,announces interim results for the six months ended 31 March 2005. Six months to Six months to Year to 30.9.04 31.3.05 31.3.04 £m £m £m Turnover 85.3 71.5 281.6Operatingprofit /(loss) 1.4* (2.5)* 31.4#(Loss) /Profit beforetax (0.7)* (4.6)* 28.0#Statutory(loss) profitbefore tax (2.4)* (6.0)* 17.4#Headline EPS* (1.0p) (7.1p) 44.0pDividend pershare 7.25p 6.6p 24.2pNet debt 65.1 60.9 12.5 * Before goodwill amortisation of £1.7m (2004: £1.4m)# Before goodwill amortisation of £2.7m, impairment of £5.3m and exceptionalcosts of £2.6m Summary • For the first time Holidaybreak has reported an interim operating profit*. This reflects the more balanced composition of the Group. • 484,000 holidays provided in the first half (H1 2004: 367,000). • Hotel Breaks and Adventure divisions now account for approximately two-thirds of the Group's sales (total transaction values) on an annualised basis. • Recent acquisitions, BRC (Bookit) and Djoser, increase European presence. Both are performing well and are ahead of management expectations. • Camping is expected to deliver cash and good margins in the full year. Capacity will be reduced again in 2006. • Operating cash inflow** for the 12 months to 31 March 2005 was £59.0m • Net debt at the half year just £4.2m higher than at 31 March 2004, after investing £39.0m in the acquisitions of Bookit and Djoser. • Interim dividend up 10%. • Management continues to focus on maximising yields and optimising distribution across all divisions, particularly through the internet, which accounts for over 30% of Group sales and continues to grow. Richard Atkinson, Chief Executive, said: "These are pleasing results, reflectingstrong performances by both the Hotel Breaks and Adventure divisions which havebeen boosted by our recent acquisitions. Approximately two-thirds of the Group'sactivities are now in these growth areas. We expect to achieve a satisfactorytrading outcome for the full year, at good margins, and further strong cashperformance." * Before goodwill amortisation, impairment and exceptional costs ** Cash generation before capital expenditure, acquisitions, interest, dividendsand tax Enquiries: Richard Atkinson / Robert Baddeley Holidaybreaktoday +44 (0) 20 7404 5959 / Thereafter +44 (0) 1606 787100 James Hogan / Craig Breheny Brunswick+44 (0) 20 7404 5959 Note to Editors Holidaybreak (HBR.L) is listed on the London Stock Exchange. The UK's leadingoperator of specialist holiday businesses, it sold 2.3m holidays in the 12business months to 30 September 2004. Holidaybreak has three operatingdivisions: Hotel Breaks, Adventure Holidays and Camping. Each is a market leaderin its respective specialist sector of the holiday industry, has multi-channeldistribution and is recognised for providing high standards of product andservice quality. In December 2004, Holidaybreak announced the acquisition of twomarket leading Dutch holiday businesses: BRC, the on-line intermediary forshort-stay leisure hotel breaks, and Djoser, the market leading 'soft adventure'specialist. For more information, please go to www.holidaybreak.co.uk. CHAIRMAN'S STATEMENT Introduction Holidaybreak is the UK's leading operator of specialist holiday businesses. TheGroup provided 484,000 holidays in the six months ended 31 March 2005 (2004:367,000) and, for the first time, has reported an interim operating profit*. The Hotel Breaks and Adventure divisions now account for approximatelytwo-thirds of annualised sales (total transaction values). The acquisitions ofBRC (Bookit) and Djoser, announced in December 2004, accelerated the changingbalance of the Group, increased our presence in European markets and boostedprofits in Hotel Breaks (now the biggest division in the Group) and Adventure.Both acquisitions are performing well and are ahead of management expectations.They are expected to be earnings enhancing*** in the current year. Holidaybreak has traditionally reported an operating loss in the first half as aresult of the seasonal nature of its Camping business. Camping, whilst remainingboth popular and profitable, now represents approximately a third of Groupsales. As Hotel Breaks and Adventure grow, this share is expected to fallfurther in the medium term. The changing shape of the Group, together with theextensive work we have done on Camping, reorganising the division and focusingon yield management, will continue to be important factors underpinning ourfuture financial performance. The Board thanks management and staff throughout the Group for their continuedhard work and commitment during the period. Financial results In the six-month period to 31 March 2005, total Group turnover was £85.3m (2004:£71.5m). Excluding the impact of acquisitions, turnover increased 12% to £79.8m. The pre-tax loss on ordinary activities was £0.7m, before goodwill amortisationand tax (2004 loss: £4.6m), whilst the interim operating profit* was £1.4m. On alike-for-like basis, excluding the impact of acquisitions, existing activitiesmade an operating profit* of £0.4m (2004 loss: £2.5m). The new acquisitions,Bookit and Djoser, both announced in December, contributed combined operatingprofits* of £0.9m. The improved half-year figures are the result of continued strong tradingperformances from the Hotel Breaks and Adventure divisions. Profits from theoriginal Hotel Breaks and Adventure operations (excluding Bookit and Djoser)were broadly offset by normal first half losses in the Camping business, due tothe seasonal nature of its trading. The interest charge was £2.1m (2004: £2.1m). All Holidaybreak's operations generate substantial cash. Net debt at the halfyear was £65.1m which is £4.2m higher than the 2004 figure of £60.9m. Theacquisitions of Bookit and Djoser, for a combined consideration of £39.0m(€56.3m), were financed entirely from new borrowings. Excluding these newborrowings, debt reduced by £34.8m compared to 31 March 2004. Operating cashinflow** for the 12 months to 31 March 2005 was £59.0m, including £9.7m ofoverseas VAT recovered in May 2004. Capital expenditure for the half-year, netof disposals, was £3.3m (2004: £10.9m) and net capital expenditure in thefinancial year is expected to be approximately £5.0m (2004: £13.5m). We areclose to the lowest point in our cash flow cycle at the half-year and net debtlevels reduce rapidly during May and June as final summer holiday balances arepaid. Dividend The Board has declared a half-year dividend of 7.25p per share (2004: 6.6p),representing an increase of 10% on 2004. This will be payable on 16 August 2005to shareholders on the register on 22 July 2005. The Board intends to continueits policy of paying ordinary dividends that are appropriate to the growthprospects and the underlying performance of the Group. Acquisitions Holidaybreak increased its presence in the growing leisure break and softadventure sectors, and also in European travel markets, with the announcement,in December 2004, of the acquisitions of Bookit, an on-line intermediary forshort-stay holidays in the Netherlands, and Djoser, the leading Dutch adventureholiday operator. The combined consideration for the two acquisitions was£39.0m. Djoser and Bookit enjoy high levels of consumer recognition in the Netherlandsand are market leaders in their sectors. Both companies have experienced andcommitted management teams who are staying with their businesses. Integration of the newly acquired businesses has gone smoothly. They are bothperforming well and are ahead of management expectations. Both are expected tobe earnings enhancing*** in the current year. DIVISIONAL REVIEW Hotel Breaks Hotel Breaks is now the largest division in the Group. Including Bookit,first-half operating profit* rose 28% to £7.6m (2004: £6.0m) with sales up 9% to£59.9m (2004: £54.8m). The margin improvement is partly due to improvements in the original businessand partly because Bookit only reports commissions in its accounts, rather thanTTV (total transaction values). Bookit's operating profit* in the first half was£0.7m on sales of £1.8m. Total transaction values were £9.3m. Hotel Breaks' overall sales intake for 2005 is currently 6% higher than 2004. Ona like-for-like basis, excluding Bookit, the year on year increase is 3%.Bookit has continued the very favourable trends seen prior to its acquisition byHolidaybreak. Bookit's bungalows.nl website, which specialises in self-cateringaccommodation on holiday parks, is showing particularly rapid growth. UK consumer demand for domestic short breaks has been subdued in recent months.We have still achieved year on year growth although this has been below theexceptional levels experienced in 2003 and 2004. Overseas breaks to popular citybreak destinations, such as Prague, Barcelona and New York, and London theatrepackages, for shows such as The Producers and Mary Poppins, have been areas ofhigh demand. We continue to be able to source the room capacity we require forall major destinations at prices that are attractive to our leisure breakcustomers. Adventure Holidays First-half operating profit* for the Adventure division increased by 67% to£2.5m (2004: £1.5m) with sales up 49% to £24.8m (2004: £16.7m). Excludingrecently acquired Djoser, the year on year increase in sales was 27% whilstoperating profit* rose by 54%. The margin improvement is primarily due to improved tour load factors and a verystrong first quarter performance. The operating profit* for Djoser for theperiod was £0.2m on sales of £3.6m. Our Explore brand is the UK market leader, offering a broad range of softadventure holidays. This will help us to expand Djoser's portfolio of holidaysfor the Dutch market. RegalDive, which contributed 13% (2004:16%) of divisional operating profit* inthe first half, has maintained its solid trading performance. The Tsunami in December affected only the Adventure Division and this did nothave a material impact on the Group's financial or operational performance. Allcustomers were safely accounted for. Management teams at Explore, Djoser andRegalDive reacted rapidly and effectively as events unfolded on Boxing Day,contacting both our representatives on the ground and, once definitive news wasavailable, customers' close relatives. Overall 2005 sales intake for the Adventure Division is currently 77% higherthan 2004. On a like for like basis, excluding Djoser, the year on year increaseis 20%. Sales prospects for the remainder of 2005 are healthy and initialindications for 2006 are also favourable. Camping Division With almost all sales falling in the second half of the financial year, theinterim operating loss* for Camping was £8.7m, an improvement on the 2004 figureof £10.0m. The first half includes Easter period sales of £0.6m. These wereincluded in the second half in 2004. The overall result reflects normalmarketing and overhead costs in the October to March period. Camping sales for 2005 are cumulatively 9% lower than the 2004 equivalent.Capacity has been reduced with the number of mobile homes on our campsites 11%lower and 14% fewer tents. The main overseas operational costs, depreciation and campsite fees, are nowfixed and the eventual outturn for the division is therefore sensitive torevenue intake over the remainder of the season. As previously announced, operational and overhead cost reductions in thisdivision are expected to be at least £3m in the full year. Divisional managementremains focused on yield optimisation and maximising Camping's 2005 financialresult. In 2006, we currently expect Camping capacity to be reduced once againand costs will be subject to further rigorous review. Outlook Management in all parts of the business remains focused on maximising yields andgenerating cash. The Hotel Breaks and Adventure businesses continue to performstrongly and Camping generates cash at good margins. The Bookit and Djoseracquisitions increase Holidaybreak's presence in European markets and also inthe leisure break and soft adventure sectors. Approximately two-thirds of theGroup's activities are now in these growth areas. We expect to achieve asatisfactory trading outcome for the full year, at good margins, and furtherstrong cash performance. Robert AylingChairman * Operating profit/loss before goodwill amortisation, impairment and exceptionalcosts ** Cash generation before capital expenditure, acquisitions, interest, dividendsand tax *** This statement should not be taken to mean that the earnings per share ofthe Group will necessarily match or exceed the historical reported earnings pershare of the Group and no forecast is intended or implied Consolidated profit and loss account For the six months ended 31 March 2005 Unaudited 6 months to Unaudited Audited 31 March 2005 6 months to year ended 31 March 30 September 2004 2004 £'000 £'000 £'000 £'000 £'000 Acquisitions Existing Total Operations Continuing Operations Turnover 5,449 79,821 85,270 71,524 281,557 _________ ________ _________ ________ _________------------------- --------- -------- -------- -------- ---------Operating profit (loss) beforegoodwillamortisation,impairment andexceptionaloperatingcosts 946 442 1,388 (2,516) 31,380Goodwillamortisation (483) (1,232) (1,715) (1,367) (2,735)Goodwillimpairment - - - - (5,276)Exceptionaloperatingcosts - - - - (2,645)------------------- --------- -------- -------- -------- --------- _________ ________ ________ ________ _________Operatingprofit (loss) 463 (790) (327) (3,883) 20,724 Net interestpayable (2,073) (2,071) (3,333)------------------- --------- -------- -------- -------- ---------(Loss) profiton ordinaryactivitiesbeforegoodwillamortisation,impairment,exceptionaloperatingcosts and tax (685) (4,587) 28,047------------------- --------- -------- -------- -------- --------- ________ ________ _________(Loss) profiton ordinaryactivitiesbefore tax (2,400) (5,954) 17,391Taxation 720 1,786 (5,014) ________ ________ _________(Loss) profiton ordinaryactivitiesafter taxation (1,680) (4,168) 12,377Dividends paidand proposed (3,488) (3,244) (11,478) ________ ________ _________Retained(loss) profitfor the period (5,168) (7,412) 899 ________ ________ _________(Loss) earnings perordinary shareHeadline(loss)earnings perordinary share (1.0p) (7.1p) 44.0pBasic (loss)earnings perordinary share (3.6p) (8.9p) 26.5p === === === === === The Group has no recognised gains or losses other than the (loss) profit for thefinancial period. Consolidated balance sheetAs at 31 March 2005 Unaudited Unaudited Audited 31 March 31 March 30 September 2005 2004 2004 £'000 £'000 £'000 Fixed assets:Intangible assets 73,249 42,871 36,227Tangible assets 78,610 88,215 70,559Investments 15 15 15 __________ __________ __________ 151,874 131,101 106,801Current assets:Assets held for disposal 45 780 3,526Debtors 64,249 67,481 20,833 Cash at bank and in hand 41,873 26,284 31,363 __________ __________ __________ 106,167 94,545 55,722Creditors:Amounts falling due within one year (192,518) (120,488) (90,769) __________ __________ __________Net current liabilities (86,351) (25,943) (35,047) __________ __________ __________Total assets less current liabilities 65,523 105,158 71,754Creditors:Amounts falling due after more than oneyear (26,597) (71,835) (29,136)Provision for liabilities and charges (6,122) (4,621) (6,122) __________ __________ __________Net assets 32,804 28,702 36,496 __________ __________ __________ Capital and reserves Called up share capital 2,405 2,376 2,381Share premium account 36,097 34,162 34,427Other reserves (3,839) (2,971) (3,709)Profit and loss account (1,859) (4,865) 3,397 __________ __________ __________Equity shareholders' funds 32,804 28,702 36,496 __________ __________ __________ Consolidated cashflow statementFor the six months ended 31 March 2005 Unaudited Unaudited Audited 6 months to 6 months to Year ended 31 March 31 March 30 September 2005 2004 2004 £'000 £'000 £'000 Net cash (outflow) inflow fromoperating activities (7,926) (20,697) 46,274Returns on investments and servicingof finance (2,072) (2,071) (4,033)Taxation (1,957) (4,552) (7,541)Capital expenditure (net of (3,305) (10,922) (7,478)disposals)Acquisitions (38,956) - -Equity dividends paid - - (10,674) __________ __________ __________Cash (outflow) inflow beforemanagement (54,216) (38,242) 16,548of liquid resources and financingFinancing 62,989 31,167 (18,624) __________ __________ __________Increase (decrease) in cash in theperiod 8,773 (7,075) (2,076) __________ __________ __________ Notes: 1. The figures for the year-ended 30 September 2004, which were approved by the Board of Directors on 2 December 2004, do not constitute the company's statutory accounts for the period, but have been extracted from the statutory accounts, which 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) of the Companies Act 1985. The accounts for the six months ended 31 March 2005 have neither been reviewed nor audited nor have the relevant accounts for the equivalent period in 2004. They comply with relevant accounting standards and have been prepared on a consistent basis using accounting policies set out in the 2004 Annual Report and Financial Statements. 2. The loss per ordinary share is based on the weighted average number of ordinary shares in issue of 46,994,257 (six months to 31 March 2004 - 46,696,436; year ended 30 September 2004 - 46,743,795). The headline loss per ordinary share is based on group profit on ordinary activities, after taxation, but before goodwill amortisation, impairment and exceptional operating costs. 3. An interim dividend of 7.25p per ordinary share will be paid on 16 August 2005 to shareholders on the Register on 22 July 2005. 4. Segment information Group turnover by geographic region was as follows; Unaudited Unaudited Audited 6 months to 6 months to Year ended 31 March 31 March 30 September 2005 2004 2004 £'000 £'000 £'000 United Kingdom and Ireland 78,652 70,240 238,618Netherlands and Belgium 5,449 - 22,245Germany, Switzerland and Austria - - 15,586Others 1,169 1,284 5,108 __________ __________ __________ 85,270 71,524 281,557 __________ __________ __________ Group turnover and operating profit (loss) before goodwill amortisation,impairment, exceptional operating costs and (loss) profit before tax by class ofbusiness was as follows: Turnover Unaudited Unaudited Audited 6 months to 6 months to Year ended 31 March 31 March 30 September 2005 2004 2004 £'000 £'000 £'000 Hotel Breaks 59,913 54,845 120,895Adventure holidays 24,789 16,679 37,417Camping 568 - 123,245 _________ _________ _________ 85,270 71,524 281,557 _________ _________ _________ 4. Segment information (continued) Operating profit (loss) before goodwill (Loss) profit before tax amortisation, impairment and exceptional operating costs Unaudited Unaudited Audited Unaudited Unaudited Audited 6 months to 6 months to Year ended 6 months to 6 months to Year ended 31 March 31 March 30 September 31 March 31 March 30 September 2005 2004 2004 2005 2004 2004 £'000 £'000 £'000 £'000 £'000 £'000 Hotel Breaks 7,615 5,960 14,487 7,158 5,780 14,129 Adventure 2,493 1,496 3,160 1,503 711 1,590 holidays Camping (8,720) (9,972) 13,733 (8,988) (10,374) 5,005 _________ _________ _________ _________ _________ _________ 1,388 (2,516) 31,380 (327) (3,883) 20,724 _________ _________ _________ Investment income 339 203 1,097 Interest payable (2,412) (2,274) (4,430) _________ _________ _________ (Loss) profit before tax (2,400) (5,954) 17,391 _________ _________ _________ 5. Reconciliation of operating (loss) profit to net cash (outflow) inflow from operating activities Unaudited Unaudited Audited 6 months to 6 months to Year ended 31 March 31 March 30 September 2005 2004 2004 £'000 £'000 £'000 Operating (loss) profit (327) (3,883) 20,724Depreciation and amortisation andimpairment of goodwill 2,488 2,036 23,144(Increase) decrease in debtors (39,935) (42,534) 1,144Increase in creditors 29,848 23,684 1,262 __________ __________ ___________Net cash (outflow) inflow fromoperating activities (7,926) (20,697) 46,274 __________ __________ ___________ 6. Reconciliation of net debt Unaudited Unaudited Audited 6 months to 6 months to Year ended 31 March 31 March 30 September 2005 2004 2004 £'000 £'000 £'000 Increase (decrease) in cash in theperiod 8,773 (7,075) (2,076)Cash (inflow) outflow from (increase)decrease in debt and lease financing (61,295) (30,432) 19,629 _________ _________ _________Movement in net debt in the period (52,522) (37,507) 17,553New hire purchase contracts - - (6,734)Net debt at beginning of period (12,534) (23,353) (23,353) _________ _________ _________Net debt at end of period (65,056) (60,860) (12,534) _________ _________ _________ 7. Acquisition of Subsidiaries On 21 December 2004, the Group acquired 100% of the issued share capital of BRCHolland Holding BV for cash consideration of £23.1 million. BRC is the marketleading on-line intermediary for short-stay leisure hotel breaks in theNetherlands. This transaction has been accounted for by the acquisition methodof accounting. Book & Provisional Fair Value £'000 Net assets acquiredTangible fixed assets 967Trade and other receivables 1,466Cash and cash equivalents 548Trade and other payables (1,248)Tax liabilities (625) _________ 1,108Goodwill 22,294 _________Total consideration 23,402 _________Satisfied by:Cash 23,059Costs of acquisition - paid 208- accrued 135 _________ 23,402 _________Net cash outflow arising on acquisition:Cash consideration (23,059)Cash and cash equivalents acquired 548 _________ (22,511) _________ 7. Acquisition of Subsidiaries (continued) On 19 January 2005, the Group acquired 100% of the issued share capital ofDjoser BV for cash consideration of £16.0 million. Djoser BV is Netherlands'leading 'soft adventure' holiday operator. This transaction has been accountedfor by the acquisition method of accounting. Book & Provisional Fair Value £'000 Net assets acquiredTangible fixed assets 300Trade and other receivables 4,805Cash and cash equivalents 8Trade and other payables (4,938)Tax liabilities (64) _________ 111Goodwill 16,322 _________Total consideration 16,433 _________Satisfied by:Cash 15,951Costs of acquisition - paid 294- accrued 188 _________ 16,433 _________Net cash outflow arising on acquisition:Cash consideration (15,951)Cash and cash equivalents acquired 8 _________ (15,943) _________ 8. Copies of this Interim Report are available from the registered office of Holidaybreak plc, Hartford Manor, Greenbank Lane, Northwich, Cheshire CW8 1HW. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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