2nd Jul 2007 07:00
Travelzest plc02 July 2007 Date: 2 July 2007On behalf of: Travelzest plc ("Travelzest" or the "Group")Embargoed until: 0700hrs Travelzest plcInterim results for the six months to 30 April 2007 Travelzest plc, the British online travel group offering specialist travelprogrammes, is pleased to announce its interim results for the six months ended30 April 2007. Financial Highlights • Group total transaction value increased by 849% to £86.3 million (2006: £9.1 million) • Group turnover increased by 267% to £13.6 million (2006: £3.7 million) • Profit before goodwill amortisation, the charge for share based payments, interest and tax was £1.7 million (2006 Restated*: £1.3 million loss) • Profit before tax of £0.4 million (2006 Restated*: £1.4 million loss) • Normalised diluted earnings per share (adding back goodwill amortisation and the charge for share based payments) 3.1p (2006: 9.67p loss per share) Operational Highlights • Excellent results from the Group's Canadian online retail business, itravel2000.com • Strong performance from UK winter biased specialist tour operator businesses • Successful launch of Flight.co.uk • Continuing investment in Holiday.co.uk • Acquisition of Tapestry Travel Limited in December 2006 and relaunched as The Tapestry Collection, specialising in programmes to Turkey • Wow House Limited acquired in December 2006, offering an exclusive portfolio of large prestigious houses to rent for short breaks and special occasions in the UK * Restated to reflect FRS20 (share based payment) Commenting on the results, Chris Mottershead, Travelzest's Chief Executive,said: "When the Travelzest concept was launched we set out to create a travel companywhich generated profits throughout the year. I am very pleased to report thatwe have managed to achieve a profit in the first six months in only our secondyear. This result is particularly pleasing as it represents an underlying yearon year first six month profit improvement of £3 million. "Our winter biased businesses delivered excellent performances withitravel2000.com increasing sales by 17% over the same period in the previousyear, and Best of Morocco by 30% year on year. This demonstrates our ability tomake significant improvements to the businesses we acquire. We have alsolaunched Flight.co.uk and Wow House, and relaunched The Tapestry Collection, allof which have made a good start. In addition we continue to developHoliday.co.uk." Enquiries: Christopher MottersheadTravelzest plc 01442 874 322 Emma Kane / Samantha Robbins / Duncan McCormickRedleaf Communications Limited 020 7822 0200 Chairman's statement I am pleased to report that a half year profit has been achieved for the firsttime in the Group's history. This meets our strategy of creating a group whichearns profits more evenly through the year than is normal in the travelindustry. Results With growth in total transaction value of 849% to £86.3 million, the Groupgenerated profits before interest, tax, goodwill amortisation and the effect ofFRS20 (Share Based Payment) of £1.7 million for the six months ended 30 April2007. This compares with a loss of £1.3 million for the same period in theprevious year. The Group adopted FRS 20 for the first time this year giving rise to a charge of£171,000 in the period. Further details of the effect of FRS 20 are included inthe notes to the interim financial statements. The charge for goodwill amortisation was £741,000 (2006: £116,000). The Group reported a pre tax profit of £0.4 million (2006 Restated: £1.4 millionloss). Normalised diluted earnings per share (adding back goodwill amortisation and theeffect of FRS 20) is 3.1p (2006: 9.67p loss per share). I am particularly pleased with itravel2000.com which has delivered an excellenthalf year result. In addition we have seen an improved performance from a numberof the Group's UK specialist businesses, demonstrating our ability to increasethe profitability of businesses following acquisition. We have continued to invest in Holiday.co.uk and are pleased to report thesuccessful launch of Flight.co.uk, Wow House and The Tapestry Collection. Strategy We continue to capitalise on the changes taking place in the global travelmarket. Fuelled by the growth of internet use, there are increasing opportunities fortravel companies to offer niche holiday products to consumers who are moresophisticated and demanding in their leisure travel needs. In addition the internet also provides a means of communicating and transactingwith customers which is more efficient and lower cost than a traditional travelretailer. We are building a portfolio of companies offering travel and holiday experienceswhich use the internet as a key distribution channel. We believe that there are further opportunities for growth in the Canadianmarket which is counter cyclical in profit and cash generation to the UK and therest of Europe. Itravel2000.com is well placed to take advantage of its positionas Canada's largest online leisure travel retailer. Consumers in Canada areprogressively embracing the internet as a tool for leisure research andtransaction in the same way as experienced in the UK over the last ten years. Acquisitions The Group has acquired two companies since the start of the financial year;Tapestry Travel Limited and Wow House Limited. Tapestry Travel Limited, trading as The Tapestry Collection, provides, through aknowledgeable and experienced team, high quality and bespoke programmes inTurkey, Crete and Cephalonia. This business was acquired in December 2006. Wow House Limited, trading as The Wow House Company, was acquired in December2006 and offers an exclusive and increasing portfolio of large, prestigioushouses to rent for short and holiday breaks in the UK. People Travelzest has continued to recruit some of the most talented and notableprofessionals within the travel industry. Carol Dray joined the Group in November 2006 as Managing Director ofFlight.co.uk. Joining from Thomas Cook UK where she was Director of e-commerce,Carol also gained considerable experience from her roles at Flightcentre andLastminute.com where she was Director of Flights and Dynamic Packaging. Robin Sutherland joined Holiday.co.uk in April 2007 as Managing Director.Formerly Director of Retail at Expedia.co.uk, Robin brings with him invaluableexperience to define and drive our continuing development of the Holiday.co.ukportal. In addition to the above appointments Nishma Robb, Group Distribution Director,joined the Board in December 2006 highlighting the importance of the Group'sonline distribution strategy. I became Chairman also in December 2006,succeeding Mike Bruce Mitford. International Financial Reporting Standards ("IFRS") Travelzest will report under IFRS in the financial year ending 31 October 2008.Further information will be provided in due course regarding the transition toIFRS. Outlook Our focus in the first six months of the financial year has been to develop theexisting businesses in the Group. We are pleased to report that currenttrading is in line with the Board's expectation. In the coming six months we will continue to focus on existing businesses andalso consider further acquisitions where these meet the Group's acquisitioncriteria. Mark T J MolyneuxChairman2nd July 2007 Travelzest plcConsolidated profit and loss account Year ended Six months ended 30 April 31 October 2007 2006 2006 £000 £000 £000 Restated Restated (audited) (unaudited) (audited) Total transaction value - continuing operations 86,281 7,697 26,147 - acquisitions 45 1,402 17,936 ------------------------- -------------------------- -------------------------- 86,326 9,099 44,083 ------------------------- -------------------------- -------------------------- Turnover - continuing operations 13,544 2,300 13,840- acquisitions 45 1,402 5,349 -------------------------- -------------------------- -------------------------- 13,589 3,702 19,189 -------------------------- -------------------------- -------------------------- Cost of sales (4,392) (2,384) (11,937) -------------------------- -------------------------- --------------------------Gross profit 9,197 1,318 7,252 Administrative expenses (8,287) (2,717) (7,000)Share based payments (171) (52) (145) -------------------------- -------------------------- -------------------------- Operating profit / (loss) - continuing operations 1,022 (1,736) (824)- acquisitions (283) 285 931 -------------------------- -------------------------- -------------------------- 739 (1,451) 107 Net interest (payable) / receivable (334) 87 152 -------------------------- -------------------------- -------------------------- Profit / (loss) on ordinary 405 (1,364) 259activities before taxation Tax on profit on ordinary activities (346) 407 (254) -------------------------- -------------------------- -------------------------- Retained profit / (loss) for the period 59 (957) 5 ================ ================ ================= Earnings per share - basic 0.25p (11.50)p 0.05p Earnings per share - fully diluted 0.20p (11.50)p 0.04p Travelzest plcConsolidated balance sheet At 30 April At 31 October 2007 2006 2006 £000 £000 £000 Restated Restated (unaudited) (unaudited) (audited) Fixed assetsIntangible assets 36,560 4,498 36,106Tangible assets 2,195 638 2,016 ------------------------- ------------------------- ------------------------- 38,755 5,136 38,122 =============== =============== ===============Current assetsStock 8 - 2Debtors 6,545 1,845 3,496Cash at bank and in hand 10,343 5,463 10,989 ------------------------- ------------------------- ------------------------- 16,896 7,308 14,487 Creditors: amounts falling due (10,373) (6,197) (8,522)within one year ------------------------- ------------------------- -------------------------Net current assets 6,523 1,111 5,965 ------------------------- ------------------------- -------------------------Total assets less current liabilities 45,278 6,247 44,087 Creditors: amounts falling due after more (19,654) (10) (18,198)than one year Provisions for liabilities and charges (241) (41) (271) ------------------------- ------------------------- -------------------------Net assets 25,383 6,196 25,618 =============== =============== ===============Capital and reservesShare capital 313 170 313Share premium account 11,632 4,491 11,632Exchangeable shares 10,365 - 10,003Merger reserve 2,320 1,225 2,320Profit and loss account 753 310 1,350 ------------------------- ------------------------- -------------------------Equity capital and reserves 25,383 6,196 25,618 =============== =============== =============== Travelzest plcConsolidated cash flow statement Year ended Six months ended 30 April 31 October 2007 2006 2006 £000 £000 £000 Restated Restated (unaudited) (unaudited) (audited) Net cash inflow from operating activities 2,067 786 1,520 Returns on investments and servicing offinanceNet interest (334) 87 152 ------------------------- ------------------------- -------------------------Net cash (outflow)/inflow from returns on investment and servicing of finance (334) 87 152 TaxationUK Corporation tax paid (386) - (323) Capital expenditurePayments to acquire tangible fixed assets (513) (29) (409)Receipts from sales of tangible fixed - - -assets ------------------------- ------------------------- -------------------------Net cash outflow for capital expenditure (513) (29) (409) AcquisitionsPurchase of subsidiary companies (1,480) (2,073) (16,730)Cash acquired with subsidiary companies - 909 2,998 ------------------------- ------------------------- -------------------------Net cash outflow for acquisitions (1,480) (1,164) (13,732) Equity dividends paid - - - ------------------------- ------------------------- -------------------------Net cash outflow before financing (646) (320) (12,792) ------------------------- ------------------------- -------------------------Financing Issue of new ordinary shares - 51 7,317Loans - - 10,741 ------------------------- ------------------------- ------------------------- Net cash inflow from financing - 51 18,058 (Decrease)/Increase in cash for the period (646) (269) 5,266 ================ ================ ================ Cash outflow for the purchase of subsidiary companies in the period to 30 April2007 includes £700,000 deferred consideration paid in respect of the purchase ofPeng Travel Limited and £523,000 for the redemption of loan notes issued onacquisition of The Montpelier Collection Limited, the holding company of Fair'sFare Limited. 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 2006 statutory accounts except forthe charge for share based employee remuneration arising from the first timeadoption of FRS20. These statements are unaudited and were approved by the Board of Directors on29th June 2007. The financial information contained in these statements doesnot constitute statutory accounts as defined in Section 240 of the Companies Act1985 and United Kingdom Generally Accepted Accounting Principles. The financialinformation for the year to 31 October 2006 has been extracted from thestatutory accounts for that year and amended for the first time adoption ofFRS20 (Share Based Payment). These accounts, which received an unqualifiedaudit report, have been filed with the Registrar of Companies. 2. Total transaction value and turnover (a) Total transaction value Year ended Six months ended 30 April 31 October 2007 2006 2006 £000 £000 £000 (unaudited) (unaudited) (audited) Tour operations 4,238 2,999 15,631Travel agency 82,088 6,100 28,452 ------------------------- ------------------------- ------------------------- 86,326 9,099 44,083 ================ ================ ================ (b) Turnover Year ended Six months ended 30 April 31 October 2007 2006 2006 £000 £000 £000 (unaudited) (unaudited) (audited) Tour operations 4,238 2,999 15,631Travel agency 9,351 703 3,558 ------------------------- ------------------------- ------------------------- 13,589 3,702 19,189 ================ ================ ================ 3. Reconciliation of operating profit/(loss) to net cash inflow from operating activities Year ended Six months ended 30 April 31 October 2007 2006 2006 £000 £000 £000 (unaudited) (unaudited) (audited) Operating profit/(loss) 739 (1,451) 107Amortisation 741 116 459Depreciation 192 100 147Loss on disposal - - 1(Decrease) / increase in stock (7) - 1(Increase) in debtors (3,048) (807) (571)Increase in creditors 3,105 2,828 1,388Exchange differences taken to reserves 345 - (12) ------------------------- ------------------------- -------------------------Net cash inflow from operating activities 2,067 786 1,520 ================ ================ ================ 4. Earnings per share The basic earnings per share is 0.25p based on an equity gain of £59,000 (2006Restated - £957,000 loss) and 23,687,170 (2006 - 8,320,184) ordinary shares of2p each, being the weighted average number of ordinary shares in issue duringthe period. The diluted earnings per share is 0.20p based on average fully diluted sharecapital of 29,688,642 (2006 - 8,320,184) shares, derived as follows: Issued ordinary shares and exchangeable shares 23,687,170Share options 767,423Warrants 5,234,049 ------------------------Total 29,688,642 ================ 5. Prior period adjustment A prior period adjustment has been made to the comparative interim results forthe six months ended 30 April 2006 and in the full year financial statementsended 31 October 2006 to reflect the first time adoption of FRS20 (Share BasedPayment). The financial effect is included in the interim reported results and issummarised below. Six months to Six months to Year ended 31 30 April 2007 30 April 2006 October 2006 £000 £000 £000 Profit/(loss) before share based payments, interest, tax and goodwill amortisation 1,651 (1,283) 711 Share based payment charge (171) (52) (145) Profit/(loss) before interest, tax and goodwill amortisation 1,480 (1,335) 566 Goodwill amortisation (741) (116) (459) Operating profit/(loss) 739 (1,451) 107 Normalised fully diluted earnings/(loss) per share (addingback goodwill and share based payment charge) 3.1p (9.67)p 4.25p Background information on Travelzest plc Travelzest is a British on-line travel group with high quality brands offeringspecialist holiday programmes and services. Chris Mottershead, 48, the Group Chief Executive who founded the Travelzestconcept in April 2005, has extensive experience in the travel industry and inworking for both large and small organisations. He was managing director of TUIUK between 2001 and 2004 with responsibility for Thomson Holidays, Lunn Poly,Travelhouse and other travel businesses based in the UK. During that time, hesteered the company through one of the most difficult periods for travel andstill achieved record profits. Prior to this, he was President and CEO, NorthAmerican Leisure Group, Airtours plc, which he joined in 1993 and where hisroles included managing director and finance director. He joined Airtours fromAspro Travel & Inter European Airways where he was Group Finance Director. The Group currently comprises: itravel2000.com itravel2000.com was founded in 1994 and is an online travel agent specialisingin the sale of travel and travel related products. Sales are made throughvarious internet web sites and a customer call centre located in Mississauga,Ontario. The greater proportion of itravel2000.com's business is winter-based,thus providing counter-seasonal revenue to the predominantly summer-basedrevenues of Travelzest's businesses in Europe. www.itravel2000.com Holiday Express Holiday Express is one of the UK's leading on-line travel businesses. Itspecialises in both on-line travel fulfillment services and online travel sales.Holiday Express' retail business (acting as travel agent), provides packageholidays, charter flights and ski booking services, accounts for the vastmajority of its revenue and the remainder of its revenue is generated throughacting as a tour operator. Holiday Express owns a number of travel websitedomain names, including: - www.holiday.co.uk- www.flight.co.uk Fair's Fare Fair's Fare was established in 1995 and is the UK's leading firm of airfareanalysts, offering a unique travel planning service to both private and businessclients. The company seeks out the very best financial options, on all majorairlines, but primarily for long-haul travellers in the first and business classcabins of the world's leading airlines. VFB Holidays VFB Holidays is a long established, award winning tour operator, which providedholidays for approximately 24,000 passengers in its last financial year. VFB iscurrently contracted with the owners of approximately 350 holiday cottagesthroughout France for the summer season, and has booking arrangements with over150 hotels, most of which are privately owned and are located in rural or semi-rural locations. VFB specialises in cottage holidays in France, but also has anumber of other holiday programmes including: France a la Carte (hotelaccommodation), Corsica, Short Breaks, Escorted Tours and River Cruises. www.vfbholidays.com Best of Morocco Best of Morocco is a tour operator specialising in high quality, tailor-madeholidays to Morocco for individuals or small groups. It provides a personalisedservice and it's highly experienced and knowledgeable staff help each customerselect the hotels / resorts from their large range which are appropriate for thecustomer's desired style of holiday. Best of Morocco is the premier agent forthe Marathon des Sables, a foot race that takes place in Morocco in April eachyear, covering some 230km. Best of Morocco provides the largest contingent ofrunners for the race each year. www.bestofmorocco.co.uk Peng Travel Peng Travel was formed in 1971 to arrange naturist holidays for the UK market.Since then, it has grown to become Britain's biggest naturist tour operator. Ithas unrivalled experience of naturist areas worldwide and has selected only thebest. The range of naturist holidays offered is unmatched by any other Britishtour operator. www.pengtravel.co.uk Faraway Holidays Faraway Holidays was launched by Travelzest in August 2006. It offers tailor-made holidays to many of the world's top exotic destinations in the Far East,Middle East, Indian Ocean, South Pacific and South America. Every destinationoffered by Faraway Holidays will have been visited by at least one member of thesales team, ensuring that customers receive informed and knowledgeable advicewhen planning their holiday. www.farawayholidays.co.uk Tapestry Collection Travelzest acquired the assets of Tapestry Holidays and has launched arevitalised brand consisting of the very best of the Tapestry range. TheTapestry Collection will initially showcase the very best of Turkey and Cretefeaturing many of the most popular hotels, apartments and villas, together withsome exciting new properties. www.thetapestrycollection.com The Wow House Company Wow House Limited, trading as The Wow House Company, is a specialist UKaccommodation provider offering an exclusive portfolio of large, prestigioushouses to rent for short breaks in the UK. The company also offers acomprehensive event planning service. www.thewowhousecompany.co.uk This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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