interim results 2008 may 2008. 2 european specialist holiday group european specialist holiday group...
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Interim Results 2008Interim Results 2008
May 2008
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2 European specialist holiday groupEuropean specialist holiday group
Agenda
Bob Ayling (Chairman) - Overview
Bob Baddeley (Group Finance Director) - Finance Review
Carl Michel (Group Chief Executive) - Strategy - Trading Outlook
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3 European specialist holiday groupEuropean specialist holiday group
Highlights
Interim results- Revenue growth of 55%- Solid performance- DPS + 5%
Current trading broadly in line with expectations
Great potential for future growth
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Interim Results for the six Interim Results for the six months ended 31 March 2008months ended 31 March 2008
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5 European specialist holiday groupEuropean specialist holiday group
FINANCE DIRECTOR’S REVIEW
BOB BADDELEY
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6 European specialist holiday groupEuropean specialist holiday group
FINANCIAL HIGHLIGHTS
Revenues +55% to £156.0m (2007 : £100.6m)
EBITA loss (£10.0m) (2007 : (£5.7m))
Net debt £165.7m (2007 : £29.6m)
Dividend up 5%
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7 European specialist holiday groupEuropean specialist holiday group
2008 2007£m £m
Revenue 156.0 100.6
EBITA (10.0) (5.7)
Loss before tax* (15.4) (6.8)
Loss per share* (22.9p) (9.8p)
INCOME STATEMENT
* Before amortisation of acquired intangible assets
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8 European specialist holiday groupEuropean specialist holiday group
DIVISIONAL RESULTS
Education Hotel Breaks Adventure Camping Group
Travel
£m £m £m £m £m
Revenue 2008 39.5 75.5 40.4 0.6 156.0
2007 - 61.3 39.1 0.2 100.6
EBITA 2008 (3.0) 7.3 0.5 (14.8) (10.0)
2007 - 6.7 1.2 (13.6) (5.7)
Amortisation 2008 (2.1) (0.5) (0.2) - (2.8)
2007 - (0.6) (0.5) - (1.1)
Operating profit (loss) 2008 (5.1) 6.8 0.3 (14.8) (12.8)
2007 - 6.1 0.7 (13.6) (6.8)
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9 European specialist holiday groupEuropean specialist holiday group
CASH FLOW
2008 2007£m £m
EBITDA (7.7) (4.6)Working capital movement 13.9 (4.2)Operating cash flow 6.2 (8.8)Capital expenditure (net) (10.8) (9.0)Tax (6.5) (5.4)Interest (6.3) (0.9)Free cash flow (17.4) (24.1)Loans and share issues 13.5 23.8Acquisitions & intangibles (2.1) (3.3)(Decrease) in cash (6.0) (3.6)
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10 European specialist holiday groupEuropean specialist holiday group
BALANCE SHEET
2008 2007£m £m
Intangibles 177.0 76.6Property Plant & Equipment 180.9 65.7Non-current assets 357.9 142.3Cash and cash equivalents 55.7 50.2Net current liabilities (113.5) (63.9)Short term borrowings (210.2) (72.8)Long-term liabilities and provision (45.1) (11.2)Net Assets 44.8 44.6
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11 European specialist holiday groupEuropean specialist holiday group
BANKING FACILITIES
Refinancing of £275m 5 year committed facility completed May
- replaces previous £255m facility- £50m Term Loan- £225m RCF, Bonding and Ancillary Facility- still require £30m in CAA & ABTA bonds
Initial margin 130 bps + LIBOR (previously 85bps)- attractive terms in current conditions
Costs c.£3m- plus £0.5m unamortised from 2005
Minimum headroom c.£50m in current year
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12 European specialist holiday groupEuropean specialist holiday group
CURRENCY
23% of Group EBITA in € zone
Other net exposure- c. €53m- c. $26m
Forward contracts in place for 2008 but not for 2009
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13 European specialist holiday groupEuropean specialist holiday group
CEO REVIEW
CARL MICHEL
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14 European specialist holiday groupEuropean specialist holiday group
EDUCATION Business already 32% booked for 2009.
Seen as non-discretionary spend
Two leading UK education brands
HOTELS BREAKS
Increased UK hotel availability and less pressure on margins. Customers typically aged 40-70
No room commitments
ADVENTURE TRAVEL
Average customer age 50
Good growth (+12%) for next year across division. No flight or room commitments
CAMPING Capacity reduced 5% this year. One third of revenues come from outside UK.
Large pool (50,000) of lapsed UK loyalists. Seen as a cheaper option for a family holiday
DIVISION STRENGTHS/POSITIVES
BUSINESS RESILIENCE
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15 European specialist holiday groupEuropean specialist holiday group
Building on core competencies
Develop a multipath approach
Pursue sustainable faster growth
Diversify sales mix
PROGRESS AGAINST STRATEGIC THEMES
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16 European specialist holiday groupEuropean specialist holiday group
1. BUILDING ON CORE COMPETENCIES
Web expertise
London theatrefor the Dutch
Focus on respective sales expertise in tours and centres.
SUPERBREAK
WETBNST
KEYCAMP/EUROCAMP
EXPLORE
TRAVELPLUS
DJOSER
Selling London theatre visits to schoolsPackaging hotel stays
with premium tickets
Cyclingproduct Work-travel and
Volunteer products
SchoolsAdventures*
Work assignments atPGL centresSummer language schools*
Action stationson campsitesExchange
customer lists
* Activity planned for 2009
PGL
BOOKIT
Selling last minuteCamping stock
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17 European specialist holiday groupEuropean specialist holiday group
Organic developments
Launch of Explore Tailor-made in late June
Launch of Travelworks in UK
Introduction of tree-houses and Florida into Camping programme
Channel developments
Explore products to be sold via Thomas Cook
New ticket booth at Leicester Square
Bolt-on acquisitions
Acquisition of Divantoura (Ghent)
Healthy pipeline of deal opportunities
2. DEVELOP A MULTIPATH APPROACH
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18 European specialist holiday groupEuropean specialist holiday group
Windmill Hill in Hailsham, Sussex – a new centre with the potential for 400+ beds. £300k of bookings for 2009
Other opportunities to grow UK bedstock on existing sites – potential to add further 480 beds (on base of 6,800) in 2008/09
Drive to value added packaging in London
Up year to date from 36% to 49% - average spend 2¼ times that of room-only sales
Larger presence allow more substantial ticket commitments for shows
Continued systems investment
Cost synergies next year between NST and PGL
3. PURSUE SUSTAINABLE FASTER GROWTH
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19 European specialist holiday groupEuropean specialist holiday group
2007/08 proforma sales: Education 22%, Hotels Breaks 33%, Adventure Travel 21%, Camping 24%
Adventure Travel Division already half non-UK revenue
Looking at several European acquisitions
Portfolio now spanning all customer age bands:
4. DIVERSIFY SALES MIX
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20 European specialist holiday groupEuropean specialist holiday group
Education
Up 9%. £19m of turnover already booked with UK adventure centres for 2009
Hotel Breaks
Sales intake up 7%. Activity in London will tail off with August ending of Tutankhamum/China Warriors but new shows (Oliver!) and exhibitions (Hadrian’s Britain) to follow
Margins continue at around 12% to reflect investment in IT systems and web affiliate costs
Adventure Travel
Current summer sales up 5%. Impact of Antarctic, Kenya and Tibet worth about £2m in sales with margin adversely affected by around £0.8m.
Camping
Up 2% on capacity down 5%. Now 90% booked, but depends on late UK market (last year assisted by bad weather)
Margins assumed to be stable
TRADING UPDATE
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21 European specialist holiday groupEuropean specialist holiday group
The group enjoys
A sound financial position
Industry-leading margins
Good operating cashflow
Current performance is good
Our operations are resilient
We have confidence in the longer term growth prospects for the group
OUTLOOK