18th May 2007 07:01
Holidaybreak PLC18 May 2007 18 May 2007: For immediate release HOLIDAYBREAK PLC Results for the six months ended 31 March 2007 Overall trading in line with management expectations Holidaybreak, the European specialist holiday group, announces interim resultsfor the six months ended 31 March 2007. Holidaybreak today separately announced the proposed acquisition of UK schooltrips organiser PGL. Holidaybreak Financial Highlights Six months to Six months to Year to 30.9.06 31.3.07 31.3.06 £m £m £mRevenue 100.6 88.7 304.5Operating (loss) /profit (6.8) (5.8) 34.3Amortisation of intangibleassets within operating(loss) / profit (1.1) (0.5) (1.7)(Loss) / profit beforetax (7.9) (6.3) 32.1EPS (p) (11.5p) (9.6p) 46.8pDividend per share (p) 8.8p 8.0p 29.2pNet debt 29.6 36.2 3.1 Summary • Results are broadly in line with management expectations. The Group hastraditionally reported an operating loss in the first half due to the seasonalnature of its Camping business. • Dividend per share increased by 10% to 8.8p. • Net debt at the half year was £29.6m (2006: £36.2m). • Sales intake for Hotel Breaks is currently 8% above last year. Therecovery in market conditions experienced in the second half of last financialyear has continued. Value-added business into London, with its strong theatreofferings such as The Sound of Music, Billy Elliot and Dirty Dancing, has beenparticularly buoyant. London theatre ticket agent West End Theatre Bookings,acquired in January, is performing in line with expectations. • Adventure Travel continues to perform satisfactorily. Adventure currentlike-for-like sales for this summer are 7% up. We anticipate another acceptableperformance from this division in the current year. The German businessesacquired at the end of last financial year, carpe diem and TravelWorks, haveperformed well. • Camping is expected to deliver cash and good margins in the full year.Camping sales intake to date are level with last year in the context of a 4%reduction in capacity. We are currently over 85% booked for the whole season, inline with plan. • As previously stated, we are making significant investments in ourexisting businesses. Organic growth initiatives include the extension of productranges in the Adventure Travel Division and investing in the online capabilityof all our businesses. We are also investing £9.5m (net of disposal proceeds) inthe current financial year to replace older mobile homes. Carl Michel, Chief Executive, said: "I continue to be pleased with the progressthe Group is making. This year we again expect to deliver margins well aboveindustry norms and demonstrate strong cash generation. We continue to have ahealthy pipeline of acquisitions and will grow our brands within Holidaybreak. "Current trading in all our divisions is broadly in line with expectations andthe Board continues to expect to achieve a satisfactory trading outcome for thefull year. We are excited by the potential of PGL and believe it is an excellentfit with our strategy" Enquiries: Carl Michel / Bob Baddeley Holidaybreak +44 (0) 1606 787100 James Hogan / Craig Breheny / Ash Spiegelberg Brunswick +44 (0)20 7404 5959 Note to Editors Holidaybreak (HBR.L) is listed on the London Stock Exchange. The Europeanspecialist holiday group sold 3.1m holidays in the year ended 30 September 2006(2005: 3.0m). Holidaybreak has three operating divisions: Hotel Breaks,Adventure Travel and Camping. Each is a market leader in its respectivespecialist sector of the European holiday industry, has multi-channeldistribution and is recognised for providing high standards of product andservice quality. CHAIRMAN'S STATEMENT Introduction Holidaybreak is a leading European specialist holiday group with significantoperations in the United Kingdom, the Netherlands and Germany. The Groupprovided 544,000 holidays in the six months ended 31 March 2007 (H1 2006:545,000). Holidaybreak's performance continues to be driven by its Hotel Breaks andAdventure Travel divisions which account for approximately 70% of Group sales(total transaction values) on an annualised basis. Camping, despite making itsnormal operating loss in the first half, remains a profitable business. Ongoingmanagement actions, to ensure capacity is aligned with demand, are continuing toshow positive results. The Board thanks management and staff throughout the Group for their continuedhard work and commitment during the period. Financial results The Group has traditionally reported an operating loss in the first half due tothe seasonal nature of its Camping business. In the six-month period to 31 March2007, Holidaybreak recorded a pre-tax loss on ordinary activities of £7.9m,(2006: loss of £6.3m), whilst the operating loss was £6.8m (2006: loss of£5.8m). On an annualised basis, all Holidaybreak's operations generate a good level ofcash. Net debt at the half year was £29.6m (2006: £36.2m). Capital expenditure for the half year, net of disposals, was £9.0m (2006: £4.9m)and net capital expenditure for the financial year is expected to beapproximately £16.2m (2006: £4.6m). The half year-end typically represents closeto a low point in our cash flow cycle. Net debt levels typically reduce rapidlyduring May and June as final summer holiday balances are paid. Dividend The Board has declared a half year dividend of 8.8p per share (2006: 8.0p),representing an increase of 10% on 2006. This will be payable on 14 August 2007to shareholders on the register on 20 July 2007. The Board intends to continueits policy of paying ordinary dividends that are appropriate to the prospectsand the underlying performance of the Group. Divisional review Hotel Breaks Hotel Breaks' first-half operating profit was £6.1m (2006: £6.5m) with revenues£61.3m (2006: £55.2m). Operating profit before amortisation of intangible assetswas £6.7m (2006: £6.8m). Sales intake for Hotel Breaks is currently 8% above last year. The recovery inmarket conditions experienced in the second half of last financial year hascontinued. Value-added business into London, with its strong theatre offeringssuch as The Sound of Music, Billy Elliot and Dirty Dancing, has beenparticularly buoyant. London theatre ticket agent West End Theatre Bookings, acquired in January, isperforming in line with expectations. Adventure Travel First-half operating profit for the Adventure Travel Division was £0.7m (2006:£0.8m) on revenues of £39.1m (2006: £33.5m). Operating profit beforeamortisation of intangible assets was £1.2m (2006: £1.0m). Adventure current like-for-like sales for this summer are 7% up. We anticipateanother acceptable performance from this division in the current year. TheGerman businesses we acquired at the end of last financial year, carpe diem andTravelWorks, have shown encouraging year on year growth. Geopolitical events continue to impact demand for Middle East tours, but thebreadth of our product offering allows customers many alternative tours. Thefamily product continues to outperform management's initial expectations. Camping With, as always, almost all revenues falling in the second half of the financialyear, the interim operating loss for Camping was £13.6m, (2006: £13.1m). Theincreased operating loss is due to the phasing of marketing spend, which, underIAS38, is written off as incurred. Camping sales intake to date are level with last year in the context of a 4%reduction in capacity. We are currently over 85% booked for the whole season, inline with plan. As previously stated, we are investing £9.5m (net of disposal proceeds) in thecurrent financial year to replace older mobile homes. Camping is expected to deliver cash and good margins in the full year. Outlook Management remains focused on maximising yields and generating cash. This yearwe again expect to deliver margins well above industry norms. The Group is seeing a healthy flow of further acquisition opportunities and willcontinue to review potential transactions as it grows the brands withinHolidaybreak. Current trading in all our divisions is broadly in line with expectations andthe Board expects to achieve a satisfactory trading outcome for the full year. Robert Ayling Chairman Group income statement For the six months ended 31 March 2007 Unaudited 6 Audited Year Unaudited six months ended months to ended 31 March 2007 31 March 30 September 2006 2006 Acquisitions Existing Total Operations Continuing Operations note £'m £'m £'m £'m £'m Revenue 3 1.8 98.8 100.6 88.7 304.5Net operating costs (1.7) (105.7) (107.4) (94.5) (270.2)---------------- ----- ------- ------- ------- ------ ---------Net operating costs beforeamortisation of otherintangible assets (1.7) (104.6) (106.3) (94.0) (268.5) Amortisation of otherintangible assets - (1.1) (1.1) (0.5) (1.7)---------------- ----- ------- ------- ------- ------ ---------Operating (loss) profit 3 0.1 (6.9) (6.8) (5.8) 34.3 Investment income 0.8 0.8 1.4Finance costs (1.9) (1.3) (3.6)---------------- ----- ------- ------- ------- ------ ---------(Loss) profit before tax (7.9) (6.3) 32.1---------------- ----- ------- ------- ------- ------ ---------Tax 2.4 1.8 (9.7)---------------- ----- ------- ------- ------- ------ ---------(Loss) profit for the period (5.5) (4.5) 22.4---------------- ----- ------- ------- ------- ------ ---------Attributable to:Equity holdersof the parent (5.5) (4.5) 22.4---------------- ----- ------- ------- ------- ------ ---------(Loss) Earnings per share (pence) Basic 4 (11.5p) (9.6p) 46.8p Group statement of recognised income and expense For the six months ended 31 March 2007 Six months Year ended ended 31 March 31 March 30 September 2007 2006 2006 £'m £'m £'m (Loss) profit for the period fromcontinuing operations (5.5) (4.5) 22.4------------------------ -------- -------- ---------Total recognised income and expensefor the period (5.5) (4.5) 22.4------------------------ -------- -------- --------- Attributable to:Equity holders of the parent (5.5) (4.5) 22.4------------------------ -------- -------- --------- Group balance sheet 31 March 2007 31 March 31 March 30 September 2007 2006 2006 £'m £'m £'mNon-current assets Goodwill 64.8 56.2 61.5Other intangible assets 11.8 7.8 11.5Property, plant and equipment 65.7 67.0 53.4---------------------- -------- -------- --------- 142.3 131.0 126.4 Current assetsInventories 1.1 0.7 0.6Trade and other receivables 52.0 41.1 20.7Cash and cash equivalents 50.2 43.9 54.4---------------------- -------- -------- --------- 103.3 85.7 75.7 Assets held for sale 0.5 1.3 2.4---------------------- -------- -------- ---------Total assets 246.1 218.0 204.5---------------------- -------- -------- --------- Current liabilitiesTrade and other payables (116.8) (97.4) (77.4)Tax liabilities (0.7) (0.8) (4.8)Obligations under finance leases (5.4) (4.8) (5.0)Bank overdrafts and loans (67.4) (65.7) (45.9)---------------------- -------- -------- --------- (190.3) (168.7) (133.1)---------------------- -------- -------- ---------Net current liabilities (87.0) (83.0) (57.4)---------------------- -------- -------- --------- Non-current liabilitiesDeferred tax liabilities (4.2) (4.3) (5.7)Obligations under finance leases (7.0) (9.6) (6.6)---------------------- -------- -------- --------- (11.2) (13.9) (12.3)---------------------- -------- -------- ---------Total liabilities (201.5) (182.6) (145.4)---------------------- -------- -------- ------------------------------- -------- -------- ---------Net assets 44.6 35.4 59.1====================== ======== ======== ========= Equity Share capital 2.4 2.4 2.4Share premium account 38.5 37.4 37.9Own shares (2.8) (3.5) (3.2)Other reserves 1.0 1.0 0.7Retained earnings 5.5 (1.9) 21.3---------------------- -------- -------- ---------Total equity 44.6 35.4 59.1====================== ======== ======== ========= Group cash flow statement For the six months ended 31 March 2007 Six months ended Year ended 31 March 31 March 30 September 2007 2006 2006 £'m £'m £'m----------------------------- ------- ------- --------- Operating (loss) profit (6.8) (5.8) 34.3Adjustments for:Depreciation, amortisation andimpairment of goodwill 2.2 1.4 12.6 IFRS 2 share option charge 0.3 0.2 0.2 (Increase)/ decrease in receivables (31.3) (19.8) (0.4)Increase/ (decrease) in payables 26.8 18.4 2.1----------------------------- ------- ------- --------- Cash (outflow) inflow from operatingactivities (8.8) (5.6) 48.8 Tax paid (5.4) (2.8) (7.6)----------------------------- ------- ------- ---------Net cash from operating activities (14.2) (8.4) 41.2----------------------------- ------- ------- --------- Investing activities Acquisitions of subsidiaries net ofcash acquired (2.0) - (4.0)Purchase of intangible assets (1.3) - (0.3)Purchase of property, plant andequipment (10.8) (7.3) (10.2)Proceeds on disposal of property,plant and equipment 1.8 2.4 5.6----------------------------- ------- ------- ---------Net cash used in investmentactivities (12.3) (4.9) (8.9)----------------------------- ------- ------- --------- Financing activities Finance costs paid (1.7) (1.2) (2.9)Interest received 0.8 0.8 1.4Proceeds on issue of ordinary shares 0.6 0.5 1.0Proceeds of sale on own shares 0.3 - 0.7New bank loans raised 22.1 13.6 -Repayment of borrowings - - (6.3)Payments under finance leases (2.6) (3.1) (5.9)New finance leases 3.4 - -Dividends paid - - (13.1)----------------------------- ------- ------- ---------Net cash from (used in) financingactivities 22.9 10.6 (25.1)----------------------------- ------- ------- -------------------------------------- ------- ------- --------- Net (decrease) increase in cash andcash equivalents (3.6) (2.7) 7.2----------------------------- ------- ------- --------- Cash and cash equivalents atbeginning of period 53.3 46.1 46.1----------------------------- ------- ------- ---------Cash and cash equivalents at end ofperiod 49.7 43.4 53.3----------------------------- ------- ------- --------- Analysis of net borrowings & reconciliation of net cash flow to movement in net borrowings 31 March 31 March 30 September 2007 2006 2006 £'m £'m £'mCash 50.2 43.9 54.4 Bank overdrafts (0.5) (0.5) (1.1)--------------------------- -------- -------- ---------Cash and cash equivalents 49.7 43.4 53.3 Borrowings due within one year (72.3) (70.0) (49.8)Borrowings due after one year (7.0) (9.6) (6.6)--------------------------- -------- -------- ---------Net borrowings at the end of the period (29.6) (36.2) (3.1)--------------------------- -------- -------- --------- Six months ended Year ended 31 March 31 March 30 September 2007 2006 2006 Reconciliation of net cash flow to movement in net borrowings(Decrease) increase in cash and cash equivalents (3.6) (2.7) 7.2Cash (inflow) outflow from movement in net borrowings (22.9) (10.6) 12.6--------------------------- -------- -------- ---------Cash (inflow) outflow from (increase) decrease in net borrowings (26.5) (13.3) 19.8 Net borrowings at the beginning of the period (3.1) (22.9) (22.9)--------------------------- -------- -------- --------- Net borrowings at the end of the period (29.6) (36.2) (3.1)--------------------------- -------- -------- --------- Notes to the interim statement 1. General information The interim statement for the six months ended 31 March 2007 does not constitutestatutory accounts for the purposes of Section 240 of the Companies Act 1985 andhas not been audited. No statutory accounts for the period have been deliveredto the Registrar of Companies. Comparative financial information for the 6months ended 31 March 2006 has not been audited. The financial information in respect of the year ended 30 September 2006 hasbeen produced using extracts from the statutory accounts prepared under IFRS forthis period. The statutory accounts for this period have been filed with theRegistrar of Companies. The auditors have reported on those accounts and thatreport was unqualified and did not contain a statement under section 237(2) or237(3) of the Companies Act 1985. The financial information presented on pages 1 to 5 has been prepared based onthe adoption of IFRS, including International Accounting Standards (IAS) andinterpretations issued by the International Accounting Standards Board (IASB)and its committees, as interpreted by any regulatory bodies relevant to theGroup. These are subject to ongoing amendment by the IASB and subsequentendorsement by the European Commission and are therefore subject to change. The interim statement was approved by the Board of Directors on 18 May 2007.This announcement is being sent to shareholders and will be made available atthe Company's registered office at Hartford Manor, Greenbank Lane, NorthwichCheshire, CW8 1HW UK. 2. Accounting policies Basis of preparationThe interim statement has been prepared on a basis consistent with the Group'sIFRS accounting policies. All of these policies have been applied consistentlythroughout the period. The interim statement has been prepared on the historical cost basis. 3. Business segments For management purposes, the Group is currently organised into the followingdivisions: Hotel Breaks, Adventure Travel and Camping. These divisions are thebasis on which the Group reports its primary segment information. Segment information about these divisions is presented below: Revenue Operating profit (loss) 6 months ended Year ended 6 months ended Year ended 31 March 31 March 30 September 31 March 31 March 30 September 2007 2006 2006 2007 2006 2006 £'m £'m £'m £'m £'m £'mContinuing OperationsHotel Breaks 61.3 55.2 122.7 6.1 6.5 16.2Adventure Travel 39.1 33.5 76.3 0.7 0.8 5.6Camping 0.2 - 105.5 (13.6) (13.1) 12.5 ------ ------- --------- ------- ------- --------- 100.6 88.7 304.5 (6.8) (5.8) 34.3 ------ ------- --------- ------- ------- --------- The result of the business acquired in the period is included in the results ofthe Hotel Breaks Division above. Further information on the acquisition isincluded in note 7 below. 4. (Loss) Earnings per share Basic (loss) earnings per share are calculated by dividing the loss attributableto the ordinary shareholders of £5.5m (2006 - interim loss of £4.5m, full yearprofit of £22.4m) by the weighted average number of shares in issue during theperiod of 48.1m (2006 - interim 47.6m, full year 47.8m). 5. Dividends Six months ended Year ended 31 March 31 March 30 September 2007 2006 2006 £'m £'m £'m------------------------- ------- -------- ---------Dividends declared in the period of 21.2p per share (2006 - first half 19.35p, full year 27.35p) 10.2 9.2 13.1------------------------- ------- -------- --------- The amount of £10.2m is in respect of the final dividend for the year ended 30September 2006; the amount of £9.2m is in respect of the final dividend for theyear ended 30 September 2005; the amount of £13.1m is in respect of the finaldividend for the year ended 30 September 2005 plus the interim dividend for theyear ended 30 September 2006. 6. Movement in shareholder's equity Six months ended Year ended 31 March 31 March 30 September 2007 2006 2006 note £'m £'m £'m Equity at the beginning of theperiod 59.1 48.0 48.0 (Loss) profit for the period (5.5) (4.5) 22.4---------------------- ----- -------- -------- ---------Total recognised income andexpense (5.5) (4.5) 22.4 Recognised directly in equity Dividends 5 (10.2) (9.2) (13.1)IFRS 2 share option charge 0.3 0.2 0.1New share capital subscribed 0.6 0.5 1.0Movement in owned shares 0.3 0.4 0.7---------------------- ----- -------- -------- ---------Net change recognised directly inequity (9.0) (8.1) (11.3)---------------------- ----- -------- -------- --------- Total movements (14.3) (12.6) 11.1---------------------- ----- -------- -------- ---------Equity at end of the period 44.6 35.4 59.1---------------------- ----- -------- -------- --------- 7. Acquisition of subsidiary On 29 January 2007, the Group acquired 100% of the issued share capital of WestEnd Theatre Bookings Limited for an initial consideration of £2.6m, paid incash, and a deferred consideration of up to £0.6m dependent upon certainconsiderations and payable over three years. These transactions have beenaccounted for by the acquisition method of accounting. Book & Provisional Fair Value £'m Net assets acquiredTangible fixed assets 0.1Other intangible assets 0.5Stock 0.6Trade and other receivables 0.1Cash and cash equivalents 0.7Trade and other payables (1.1)--------------------- ------------ 0.9Goodwill 2.4--------------------- ------------Total consideration 3.3 Satisfied by:Cash 2.6Deferred consideration accrued 0.6--------------------- ------------ 3.2Directly attributable costs 0.1--------------------- --------------------------------- ------------ Net cash outflow arising on acquisition:Cash consideration and costs of acquisition (2.7)Cash and cash equivalents acquired 0.7--------------------- ------------ (2.0)--------------------- ------------ 8. Events since the balance sheet date The Directors have declared and approved an interim dividend of 8.8p per share(2006 - 8.0p per share) on 18 May 2007. This has not been included as aliability at 31 March 2007. The dividend will be payable on 14 August 2007 toshareholders on the register at close of business on 20 July 2007. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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