Interim Results

All Leisure group plc ("All Leisure", the "Company" or the "Group")

Unaudited interim results for the six months ended 30 April 2013

Highlights

The Group's result for the six months ended 30 April 2013 is a loss of £13.4m. This loss includes £1.3m of restructuring costs to date principally related to the closure of the Burgess Hill office and £2.4m relating to six months of seasonal losses in the Tour Operating Division (previously Page & Moy), which were in line with budgetary expectations. Neither of these costs were included in the loss of £11.2m for the six months ended 30 April 2012. On a like-for-like basis the group result has improved to £9.7m loss, reflecting a year-on-year improvement in the Cruise Division. This is further improved by net £1.1m if the group's results are assessed prior to the year on year impact of gains and losses on certain derivative contracts which would result in an £8.6m loss. The improvement in cruise performance is due in no small part to the success of the strategy to de-risk the business. Highlights of the period under review include:

·; Improved year-on-year cruise performance on a like-for-like basis;

·; The successful integration of the Tour Operating Division which continues to perform strongly, based on the strength of forward bookings which will convert to revenue and profit in the second half of the year;

·; Expensed £1.3m of a planned £1.5m of integration costs with significant synergistic savings being achieved through the reduction of senior management headcount;

·; Cruise occupancy levels were 76% (2012: 74%);

·; Undertook a substantial, planned dry dock of mv Discovery; and

·; The group has hedged over 95% (2012: 95%) of its foreign currency requirements as well as over 30% (2012: 30%) of its projected fuel requirement.

Outlook

Although the first half of 2013 has proved challenging due to a continued tough trading environment, the successful integration of the Tour Operating Division (previously Page & Moy) and subsequent restructuring program have placed the Group in a stronger position to maximise the benefits of the increase in year-on-year bookings that we are seeing for 2014. We have currently sold 95.6% of forecast escorted tour revenue and 97.8% of forecast cruise revenue for FY13.

Roger Allard, Executive Chairman of All Leisure, said:

"It is regrettable that the recent mechanical problems with mv Voyager, tough trading conditions and unfavourable political events in Egypt will impact performance for the second half of 2013. However, despite this, I am extremely pleased to report that we are enjoying the benefits of introducing the Tour Operating Division into the Group, complementing our existing products and creating encouraging cross-selling opportunities. Furthermore, I am excited for the future of the Group following the recent successful integration of Page & Moy and am confident of achieving in the region of £1.5m in full year overhead savings in 2014 following the closure of the Burgess Hill office and rationalisation of senior management within the Group.

"We believe that we have laid solid foundations for future growth which can be enjoyed once the wider economic environment and trading conditions improve."

For further information:

All Leisure group plc

Roger Allard, Executive Chairman 01444 451 300

Ian Smith, Group Chief Executive Officer 01858 463 822

Chris Gadsby, Group Finance Director 01858 588 216

Philip Ovenden, Non Executive Director

Nigel Jenkins, Non Executive Director

Broker and Nominated Adviser

Panmure Gordon Andrew Godber/Adam Pollock 020 7886 2500

Financial Public Relations

Citigate Dewe Rogerson Ginny Pulbrook/Lindsay Noton 020 7282 2945

Unaudited Interim Condensed Financial Statements

Chairman's Statement

Overview

The first half of the 2013 financial year has again been challenging. The Group continues to operate in a challenging trading environment characterised by adverse geo-political events and tough market conditions. Against this back-drop, the Group's Cruise Division has benefitted from a strategic decision to de-risk the business through a new cruise joint venture with Cruise & Maritime Voyages Limited. This has enabled us to improve performance by more effectively deploying our ships throughout the year.

The Group's result for the six months ended 30 April 2013 is a loss of £13.4m. This loss includes £1.3m of restructuring costs principally related to the closure of the Burgess Hill office and six months of Page & Moy tour operating seasonal losses totalling £2.4m, neither of which were included in the 30 April 2012 loss of £11.2m. On a like-for-like basis the group result has improved to £9.7m loss.

As outlined in the Company's announcements of 3 June 2013, 26 June 2013 and 16 July 2013, the mv Voyager experienced major mechanical problems in May and June 2013 resulting in the curtailment of one cruise and cancellation of two others. There have been significant headwinds in cruise bookings together with the unrest in Egypt which has forced the cancellation of Discover Egypt's Nile cruise programme from the beginning of this month, in accordance with UK Foreign Office advice. However, the outlook for the Tour Operating Division in the second half of the year is positive, with first half operating losses expected to be more than offset by profits in the main trading months of May, September and October.

The Group reports a loss after tax for the half year ended 30 April 2013 of £13.4m (half year ended 30 April 2012: loss of £11.2m; full year ended 31 October 2012: profit of £0.5m). Loss per share - basic and diluted - for the half year ended 30 April 2013 was 21.7 pence compared with 18.2 pence loss per share for the comparative period (full year ended 31 October 2012: profit of 0.8 pence per share).

The Group's result before gains/(losses) on certain derivative contracts, which is the primary profit measure used internally, for the half year ended 30 April 2013 was a loss of £12.3m (half year ended 30 April 2012: loss of £11.4m; full year ended 31 October 2012: profit of £0.8m). The Group benefits from being taxed under the tonnage tax regime with regards to its ocean-going trading results, with the tax impact being a credit of £262,000 for the half year ended 30 April 2013 (half year ended 30 April 2012: charge of £4,000; year ended 31 October 2012: charge of £304,000).

In terms of cash, half year gross cash balances at 30 April 2013 stood at £13.3m (unrestricted: £9.6m, restricted: £3.7m) compared with £6.3m at 30 April 2012 (unrestricted: £5.8m, restricted: £0.5m) and £23.8m at 31 October 2012 (unrestricted: £18.2m, restricted: £5.6m).

Operational Review

Cruise Division

In the six months to April 2013 mv Minerva completed a full winter itinerary sailing eastward to the Far East. This is in contrast to the same period last year when she spent 100 days undergoing an upgrade programme and dry-dock. Mv Minerva enjoyed continuing high levels of customer satisfaction with 96% (2012: 96%) of customers stating that they will rebook in the future. Mv Voyager entered service in December 2012 for Voyages of Discovery and circumnavigated South America for her inaugural season. Mv Discovery was undergoing an extended dry dock until late February 2013 when she entered service under charter to Cruise & Maritime Voyages Limited under our arrangement with them. Mv Hebridean Princess operated its usual autumn and spring season around West Scotland.

As a result of the changed deployment of the vessels which includes the introduction of mv Voyager, Group Available Lower Berth Nights ("ALBN") increased by 18% (including mv Discovery) to 183,000 across the ocean fleet.  Overall, across the fleet occupancy levels in H1 2012/13 were 76% (2012: 74%).

Tour Operating Division

Although volumes are lower in the Tour Operating Division compared to 2012, this is because we deliberately exited the loss-making ex-UK coaching holidays market. Our gross margins per passenger for Travelsphere and Just You brands improved year-on-year across these two brands.

Hedging

As was the case in the prior year, a significant element of the Group's costs is in non-sterling denominations, especially US dollars and Euros. The Group is actively engaged in managing the impact of these currency headwinds, but unfortunately the nature and deployment of the instruments used preclude the application of hedge accounting.

Both currency and fuel hedging remain important tools for managing the cost base. The Group has hedged over 95% of its foreign currency requirements for the current financial year through US dollar, Euro and Norwegian Kroner derivatives at or better than budgeted rates. Looking forward, we have currently hedged 25% of our 2014 currency requirements with additional trades being agreed on an on-going basis to increase this cover further. For calendar year 2013, we have hedged approximately 30% of our projected fuel requirement.

Post Balance Sheet Events and Future Outlook

As first announced on 3 June, the ship mv Voyager had technical problems with two of its four generators at the end of May 2013. Due to the time to facilitate the repairs, a 10 day cruise around the UK was curtailed and the following two cruises departing on 4 and 11 June were cancelled. The mv Voyager returned into service in time for the next scheduled cruise which departed on 25 June with the assistance of temporary generators whilst work continued to build new crankshafts as a permanent solution. The Group estimates that the net one-off cost of cancelling mv Voyager cruises in May/June will be in the region of £1.6m.

Recent trading in the Cruise Division continues to be challenging. Regrettably it has been necessary to cancel Discover Egypt's Nile cruise programme following advice from the Foreign Office (see the announcement of 16 July 2013).

The integration between the Cruise Division and Tour Operating division in Market Harborough has gone well and the Burgess Hill office was closed on 31 May 2013. The cost to the Company in the six months to 30 April 2013 was £1.3m out of a total expected cost in the region £1.5m.

Looking forwards there are some positive signs for future trading. Where previously the Company had experienced later bookings, trading at this early stage of the financial year 2013/14 has started well across all brands, with the exception of Discover Egypt, which has limited forward capacity. Sales remain well ahead of last year.

In summary, the UK cruise market continues to be challenging with the continuing themes of political unrest and economic uncertainty impacting trade. The unforeseen technical problems with mv Voyager presented another unwelcome obstacle to the full year's cruise result. However, the Group as a whole is now starting to see the benefits of the acquisition of Page & Moy with new cross-selling initiatives and significant synergy savings identified, especially since the closure of the Burgess Hill office. We expect these savings to continue into future years and provide the basis of a significant improvement in shareholder returns.

Roger Allard

Chairman

Unaudited Interim Condensed Financial Statements

Consolidated Income Statement

For the six months ended 30 April 2013

All results derive from continuing operations and are attributable to equity holders of the parent company.

Unaudited Interim Condensed Financial Statements

Consolidated Statement of Comprehensive Income

For the six months ended 30 April 2013

Unaudited Interim Condensed Financial Statements

Consolidated Balance Sheet

At 30 April 2013

Unaudited Interim Condensed Financial Statements

Consolidated Statement of Changes in Equity

For the six months ended 30 April 2013

Unaudited Interim Condensed Financial Statements

Consolidated Cash Flow Statement

For the six months ended 30 April 2013

Unaudited Interim Condensed Financial Statements

Notes to the Unaudited Interim Condensed Financial Statements

For the six months ended 30 April 2013

1. Basis of presentation

The interim condensed unaudited financial statements of the Group for the six months ended 30 April 2013, have been prepared in accordance with the International Financial Reporting Standards ('IFRS') accounting policies adopted by the Group and set out in the annual report and financial statements for the year ended 31 October 2012. IAS 19 (revised) and the related consequential amendments have not materially impacted the accounting for the Group's defined benefit schemes. Other than the change noted below, the Group does not anticipate any further change in these accounting policies for the year ended 31 October 2013. As permitted, this interim report has been prepared in accordance with the AIM rules and not in accordance with IAS 34 "Interim financial reporting". While the financial figures included in these interim condensed financial statements have been computed in accordance with IFRSs applicable to interim periods, this announcement does not contain sufficient information to constitute an interim financial report as that term is defined in IFRSs.

The financial information contained in the interim report also does not constitute statutory financial statements for the purposes of s434 of the Companies Act 2006. The financial information for the year ended 31 October 2012 is based on the statutory financial statements for the year ended 31 October 2012. The auditor reported on those financial statements. This report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under s498(2) or (3) Companies Act 2006.

Going concern

After conducting a further review of the Group's forecasts of earnings and cash over the next twelve months and after making appropriate enquiries as considered necessary, including exposure to external risks as described in the Chairman's Statement, the directors have a reasonable expectation that the Company and Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the half yearly condensed financial statements.

Operating loss

Operating loss is stated as loss before tax, investment income, finance costs and other gains and losses.

2. Critical accounting judgements and key sources of estimation uncertainty

The directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities at each period end. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. There has been no change to the application of critical accounting judgements or key sources of estimation uncertainty from those set out in the 31 October 2012 financial statements.

On 15 May 2012 the Group acquired the Page & Moy Travel Group and the directors now consider the fair values of this acquisition to be final.

Unaudited Interim Condensed Financial Statements

Notes to the Unaudited Interim Condensed Financial Statements

For the six months ended 30 April 2013

3. Business segments

The Group has identified that each of its brands is an operating segment and that these operating segments meet the criteria to be aggregated into the two reporting segments: Cruising and Tour Operating.

Cruising: This includes the cruise operating segments. Revenue streams are principally from the UK but also from the USA and rest of the world.

Tour operating: This segment represents the Group's escorted tours operation, providing escorted tour holidays to a wide range of overseas destinations. Revenue streams are from the UK.

The Group holds all its derivative contracts to maturity and for this reason, coupled with being unable to hedge account under IAS 39, the information on these instruments is reported separately to the chief operating decision maker. Furthermore, these movements are not allocated to any one reporting segment in the management accounts. As a consequence the information is presented below with an adjustment that reconciles the operating profit on an IFRS basis, which includes the mark-to-market impact of the Group's open derivative financial instruments.

The following is an analysis of the Group's revenue and results by reportable segments in 2013:

Unaudited Interim Condensed Financial Statements

Notes to the Unaudited Interim Condensed Financial Statements

For the six months ended 30 April 2013

3. Business segments (continued)

4. Other income

No other income was realised for the period ended 30 April 2013.The income realised for the year ended 31 October 2012 relates to the settlement of two insurance claims made in respect of technical matters experienced on one of the ships operated by the Group.

Unaudited Interim Condensed Financial Statements

Notes to the Unaudited Interim Condensed Financial Statements

For the six months ended 30 April 2013

5. Restructuring costs

On 31 May 2013 the Group closed the Burgess Hill office. The operations previously performed by the Burgess Hill office were transferred to other existing locations, principally Market Harborough. Assets located at the closed office will be scrapped to the extent they can not be redeployed and the majority of the Burgess Hill workforce was made redundant. The office closure process is still in progress as at the date of these financial statements.

6. Income taxes

The tax credit of £262,000 (six months ended 30 April 2012: charge of £4,000; year ended 31 October 2012: charge of £304,000) represents an effective rate of 1.9% (six months ended 30 April 2012: 0%; year ended 31 October 2012: 37.9%). Certain of the Group subsidiary companies are subject to taxation under the UK Tonnage Tax regime. Under this regime, a shipping company may elect to have its taxable profits computed by reference to the net tonnage of each of the qualifying ships it operates.

7. Dividends

As trading has been considerably more challenging this year than envisaged, the Board unanimously agreed to waive the interim dividend for the six -month period ended 30 April 2013 at the Annual General Meeting on 29 April 2013.

No interim dividend has been proposed in respect of the six-month period ended 30 April 2013.

Unaudited Interim Condensed Financial Statements

Notes to the Unaudited Interim Condensed Financial Statements

For the six months ended 30 April 2013

8. (Loss)/earnings per share (pence)

9. Property, plant and equipment

During the period, the Group spent £7,746,000 on capital expenditure. The majority of the spend was on MV Discovery for its dry docking but in addition there was upgrade work on MV Voyager prior to her entering service and the annual dry dock of MV Hebridean Princess

10. Share capital

The Company has one class of ordinary shares which carry no rights to fixed income. 

The Company has in issue 1,641,970 (30 April 2011: 1,641,970 and 31 October 2011: 1,641,970) outstanding options over ordinary 1p shares in the Company.

Unaudited Interim Condensed Financial Statements

Notes to the Unaudited Interim Condensed Financial Statements

For the six months ended 30 April 2013

11. Financial Instrument's fair value disclosures

The only assets and liabilities of the Group in the current period and proceeding period and year which have been measured at fair value through profit and loss are its derivative financial instruments. The fair values of these are derived from those inputs other than quoted prices that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices) and they therefore are categorised within level 2 of the fair value hierarchy set out in IFRS 7. Accordingly, no table presenting an analysis of financial instruments that are measured subsequent to initial recognition at fair value by Levels 1 - 3 is presented.

For the derivative financial instruments (both currency and fuel), the fair value has been calculated by discounting the future estimated cash flows based on the applicable yield curve derived from quoted interest rates. The derivatives are carried at fair value and accordingly, the book value and fair value are the same.

Unaudited Interim Condensed Financial Statements

Notes to the Unaudited Interim Condensed Financial Statements

For the six months ended 30 April 2013

12. Notes to the consolidated cash flow statement

Unaudited Interim Condensed Financial Statements

Notes to the Unaudited Interim Condensed Financial Statements

For the six months ended 30 April 2013

13. Related party transactions

Trading transactions

During the year, Group companies entered into the following transactions with related parties who are not members of the Group:

Roger Allard Limited is a company owned and controlled by Mr R J Allard, a director of the Company and majority shareholder of the Group, and the payments made are for consultancy services.

Light Blue Travel Limited is a company of which Mr R J Allard is a director and shareholder and the payments made are for travel services.

PB Consultancy services is owned and controlled by Mr P E Buckley, the Company Secretary of the Group, and the payments are for consultancy, accounting and Company Secretarial services.

UK Travel Awards Limited is a company of which Mr R J Allard is a director and shareholder and the payments are made for supply of services.

Unaudited Interim Condensed Financial Statements

Notes to the Unaudited Interim Condensed Financial Statements

For the six months ended 30 April 2013

14. Ultimate Controlling Party

By virtue of his majority shareholding, the ultimate controlling party is Mr R J Allard.

Unaudited Interim Condensed Financial Statements

Independent Review Report to All Leisure group plc

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 April 2013 which comprise the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the Consolidated Statement of Changes in Equity, the Consolidated Cash Flow Statement and related notes 1 to 14. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with the International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the Company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our review work, for this report, or for the conclusions we have formed.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the AIM Rules of the London Stock Exchange.

As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report have been prepared in accordance with the accounting policies the Group intends to use in preparing its next annual financial statements.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of Review

We conducted our review in accordance with the International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 April 2013 is not prepared, in all material respects, in accordance with the AIM Rules of the London Stock Exchange.

Deloitte LLP

Chartered Accountants and Statutory Auditor

Nottingham, United Kingdom

30 July 2013