10th Jul 2006 07:01
Travelzest plc10 July 2006 Date: 10 July 2006On behalf of: Travelzest plc ("Travelzest" or the "Group")Embargoed until: 0700hrs Travelzest plc Interim results for the six months to 30 April 2006 Travelzest plc, the British travel group offering specialist travel programmes,is pleased to announce its interim results for the six months ended 30 April2006. Highlights • Group total transaction value increased by 550% from £1.4m to £9.1m • Group turnover increased by 166% to £3.70 million (2005: £1.39 million) • Operating loss before goodwill amortisation reduced by 3.8% to £1.28 million (2005: £1.33 million) • Pre-tax loss before goodwill amortisation reduced by 8.1% to £1.2 million (2005: £1.3 million) • Acquisition of Best of Morocco for £1.8 million (net of cash in the business) in November 2005 • Results include increased year on year central group costs to support the growth of the business Post Period End • Acquisition of Peng Travel, UK's largest naturist tour operator, for £1.03 million (net of cash in the business) • Acquisition of Fair's Fare, UK's leading firm of airfare analysts, for £3.95 million • Placing of 2,085,714 new ordinary shares at 126 pence per share raising £2.63 million (before expenses) Commenting on the results, Chris Mottershead, Travelzest's Chief Executive,said: "Since admission to AIM in October last year we have made strong progress indelivering our strategy to build a portfolio of high-quality, specialist travelbusinesses and on-line travel agents. A number of acquisitions have beencompleted, and integration of these businesses into the group is progressingwell. We are regularly contacted by companies interested in being a part of thegroup and are continually assessing new opportunities against our strictacquisition criteria. We confidently expect to make further earnings-enhancingacquisitions over the next twelve months." Enquiries: Christopher Mottershead / Colin McKinlayTravelzest plc 020 7747 7231 Emma Kane / Samantha Robbins / Duncan McCormickRedleaf Communications Limited 020 7955 1410 Chairman's Statement I am pleased to announce a half year's result showing a strong year on yearimprovement, with the Group significantly increasing turnover whilst reducinghalf year seasonal losses before goodwill amortisation. This result has been achieved whilst incurring increased year on year centralcosts required to manage the integration of acquired businesses and supportfuture growth. The improved result is in line with our strategy to create a group with abalanced profile of winter and summer profits. Key Events It is the group's strategy to build a portfolio of high quality, specialisttravel businesses and on-line travel agents and in November 2005 we announcedthe acquisition of Best of Morocco Limited for a net cash consideration of£1.8m. Best of Morocco is a tour operator specialising in tailor-made holidaysto Morocco for individuals and small groups. It is also the UK agent for theMarathon des Sables, a gruelling 243km endurance race across the Sahara Desertthat takes place in Morocco in April each year. Following the period end two further acquisitions have been completed: In May 2006 we announced the acquisition of Peng Travel Limited for a netconsideration of £1.0m. Formed in 1971 in response to the demand for naturistholidays, Peng has grown to become Britain's biggest naturist tour operator. In June 2006 we acquired The Montpelier Collection Limited, the holding companyof Fair's Fare Limited. The business was acquired for a consideration of £3.95m,satisfied by £1.25m cash, £2.0m loan notes and 542,636 Travelzest shares. Fair'sFare is the UK's leading firm of airfare analysts, offering a unique planningservice to both private and business clients. The company seeks out the verybest financial options on all major airlines, but primarily for long-haultravellers in the first and business class cabins of the world's leadingairlines. In addition to the above acquisitions, the group also placed 2,085,714 ordinaryshares with investors at a price of 126 pence per share, raising £2.63m beforeexpenses. Financials Since Travelzest's admission to AIM in October 2005 we have continued to see asignificant improvement in VFB Holidays' performance. This period also includesa full six months' trading result for Holiday Express, acquired in October 2005,and five months for The Best of Morocco, acquired in November 2005. Group total transaction value increased by 550% from £1.4m to £9.1m and turnoverincreased by 166% to £3.7m (2005: £1.4m). Operating losses before theamortisation of goodwill reduced by 3.8% to £1.3m and pre-tax losses before theamortisation of goodwill reduced by 8.1% to £1.2m which includes the incrementalcentral costs referred to above. The net cash inflow from operating activities was £786,000 during the first sixmonths of the year (2005: £956,000). People Colin McKinlay took up his role as Group Finance Director in April 2006.Formerly Chief Financial Officer of Thomas Cook UK Limited, Colin brings withhim a wealth of financial experience and is playing a key role in implementingour aggressive growth strategy. The management team was also further strengthened in April with the appointmentof Nishma Robb who joined from Teletext Holidays, a subsidiary of AssociatedNewspapers of which she was a Board director. Nishma is focused on developingthe Group's online capability. Steve Diederich joined Best of Morocco as Managing Director on 1 December 2005.Steve was formerly Managing Director of Laskarina Holidays Limited andpreviously with Kuoni Travel Limited. I am pleased to report that Corri Boyle has also joined the group as ManagingDirector of Peng Travel. Corri brings with her many years of experience ofworking for specialist tour operators. She was previously General Manager ofLaskarina Holidays and prior to this she spent 14 years at Panorama Holidays(now part of MyTravel Group) as Head of its Specialist Holidays brand. I am also delighted to confirm that Jonathan White has been promoted to ManagingDirector of VFB Holidays. Jonathan joined the company in 1997 and has headedthe Product and Marketing team since 1999. During this time he has beenresponsible for the launch of VFB's award-winning Short Breaks programme, aswell as developing an online strategy for the company. He has previously heldmanagement positions at Inghams Ski and with specialist operator JAC Travel. Current Trading and Outlook The directors confidently expect to make further acquisitions in the nearfuture. A number of targets have been identified that fit the group's strictacquisition criteria and which would significantly enhance group earnings.Current trading is in line with expectations and the directors look forward tothe remainder of the year with confidence. M. J. Bruce-MitfordChairman10th July 2006 Travelzest plcConsolidated profit and loss account to 30 April 2006 Year ended Six months ended 30 April 31 October 2006 2005 2005 £000 £000 £000 (unaudited) (unaudited) (audited) Total transaction value- continuing operations 7,697 1,391 11,141- acquisitions 1,402 - 1,075 -------- -------- -------- 9,099 1,391 12,216 -------- -------- --------Turnover- continuing operations 2,300 1,391 11,141- acquisitions 1,402 - 151 -------- -------- -------- 3,702 1,391 11,292 Cost of sales (2,384) (1,056) (8,352) -------- -------- --------Gross profit 1,318 335 2,940 Administrative expenses (2,717) (1,668) (3,007) -------- -------- --------Operating (loss) / profit- continuing operations (1,684) (1,333) (37)- acquisitions 285 - (30) -------- -------- -------- (1,399) (1,333) (67) Net interest receivable 87 32 125 -------- -------- --------Profit / (loss) on ordinary activitiesbefore taxation (1,312) (1,301) 58 Tax on profit on ordinary activities 394 390 (31) -------- -------- --------Retained profit / (loss) for the period (918) (911) 27 -------- -------- -------- Earnings per share - basic (11.03)p (31.87)p 0.81p Earnings per share - fully diluted (11.03)p (31.87)p 0.70p Travelzest plcConsolidated balance sheet at 30 April 2006 At 30 April At 31 October 2006 2005 2005 £000 £000 £000 (unaudited) (unaudited) (audited) Fixed assetsIntangible assets 4,498 - 3,916Tangible assets 638 94 699 -------- -------- -------- 5,136 94 4,615 -------- -------- --------Current assetsDebtors 1,845 1,357 549Cash at bank and in hand 5,463 2,726 5,753 -------- -------- -------- 7,308 4,083 6,302 Creditors: amounts falling due within one year (6,145) (3,671) (2,979) -------- -------- --------Net current assets 1,163 412 3,323 -------- -------- --------Total assets less current liabilities 6,299 506 7,938 Creditors: amounts falling due aftermore than one year (10) - (1,214) Provisions for liabilities and charges (18) - (18) -------- -------- --------Net assets 6,271 506 6,706 -------- -------- -------- Capital and reservesShare capital 170 67 163Share premium account 4,491 - 4,441Capital reserve 1,225 74 799Profit and loss account 385 365 1,303 -------- -------- --------Equity capital and reserves 6,271 506 6,706 -------- -------- -------- Travelzest plcConsolidated cash flow statement to 30 April 2006 Year ended Six months ended 30 April 31 October 2006 2005 2005 £000 £000 £000 (unaudited) (unaudited) (audited) Net cash inflow / (outflow) fromoperating activities 786 956 (132) Returns on investments and servicingof financeNet interest 87 31 125 Net cash inflow from returns oninvestment and servicing of finance 87 31 125 -------- -------- -------- TaxationUK Corporation tax paid - - (3) Capital expenditurePayments to acquire tangible fixedassets (29) (2) (36)Receipts from sales of tangible fixedassets - - 5 -------- -------- -------- Net cash outflow for capitalexpenditure (29) (2) (31) AcquisitionsPurchase of subsidiary company (2,073) - (1,815)Cash acquired with subsidiary company 909 - 1,361 -------- -------- -------- Net cash outflow for acquisitions (1,164) - (454) Equity dividends paid - - - -------- -------- -------- Net cash (outflow)/ inflow beforefinancing (320) 985 (495) -------- -------- -------- Financing 51 50 4,525 -------- -------- -------- Issue of new ordinary shares Net cash inflow from financing 51 50 4,525 (Decrease)/Increase in cash for theperiod (269) 1,035 4,030 -------- -------- -------- Travelzest plcNotes to the financial statements 1. Basis of preparation The interim financial statements have been prepared on the basis of theaccounting policies set out in the company's 2005 statutory accounts. These statements are unaudited and were approved by the Board of Directors on 7July 2006. The financial information contained in these statements does notconstitute statutory accounts as defined in Section 240 of the Companies Act1985. The financial information for the year to 31 October 2005 has beenextracted from the statutory accounts for that year. These accounts, whichreceived an unqualified audit report, have been filed with the Registrar ofCompanies. 2. Total transaction value and turnover (a) Total transaction value Year ended Six months ended 30 April 31 October 2006 2005 2005 £000 £000 £000 (unaudited) (unaudited) (audited) Tour operations 2,999 1,391 11,141Travel agency 6,100 - 1,075 -------- -------- -------- 9,099 1,391 12,216 -------- -------- -------- (b) Turnover Year ended Six months ended 30 April 31 October 2006 2005 2005 £000 £000 £000 (unaudited) (unaudited) (audited) Tour operations 2,999 1,391 11,141Travel agency 703 - 151 -------- -------- -------- 3,702 1,391 11,292 -------- -------- -------- Travelzest plcNotes to the financial statements (continued) 3. Reconciliation of operating loss to net cash inflow from operating activities Year ended Six months ended 30 April 31 October 2006 2005 2005 £000 £000 £000 (unaudited) (unaudited) (audited) Operating loss (1,399) (1,333) (67)Amortisation of goodwill 116 - 16Depreciation of tangible fixed assets 100 38 74(Increase) in debtors (755) (1,061) (50)Increase /(decrease) in creditors 2,724 3,312 (105) -------- -------- -------- Net cash inflow /(outflow) fromoperating activities 786 956 (132) -------- -------- -------- 4. Earnings per share The basic earnings per share is based on an equity loss of £918,000 and8,320,184 ordinary shares of 2p each, being the weighted average number ofordinary shares in issue during the period. As the group has incurred a loss there is no difference between the basic lossper share and the diluted loss per share. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
TVZ.L