the uk’s leading operator of specialist holiday businesses
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The UK’s Leading Operator of Specialist Holiday Businesses. PRELIMINARY RESULTS 2004. Holidaybreak plc PRELIMINARY RESULTS 2004. Bob Ayling (Chairman) - Overview Bob Baddeley (Finance Director) - Finance review Richard Atkinson (Chief Executive) Group strategy - PowerPoint PPT PresentationTRANSCRIPT
The UK’s Leading Operator of Specialist Holiday BusinessesThe UK’s Leading Operator of Specialist Holiday Businesses1
The UK’s Leading Operator ofThe UK’s Leading Operator of Specialist Holiday BusinessesSpecialist Holiday Businesses
PRELIMINARY RESULTS 2004
The UK’s Leading Operator of Specialist Holiday BusinessesThe UK’s Leading Operator of Specialist Holiday Businesses2
Holidaybreak plcPRELIMINARY RESULTS 2004
Bob Ayling (Chairman) - Overview
Bob Baddeley (Finance Director) - Finance review
Richard Atkinson (Chief Executive)- Group strategy - Divisional performance review- Prospects
Questions
The UK’s Leading Operator of Specialist Holiday BusinessesThe UK’s Leading Operator of Specialist Holiday Businesses3
Holidaybreak plcPRELIMINARY RESULTS 2004
Results in line with market expectations
Rapid growth in Hotel Breaks and Adventure divisions
Camping continues to trade profitably and deliver attractive margins
Cash generated
Dividend reflects Board’s confidence in future prospects
2005 sales currently 8% up on 2004
The UK’s Leading Operator of Specialist Holiday BusinessesThe UK’s Leading Operator of Specialist Holiday Businesses4
Holidaybreak plcPRELIMINARY RESULTS 2004
FINANCE DIRECTOR’S REVIEW
BOB BADDELEY
The UK’s Leading Operator of Specialist Holiday BusinessesThe UK’s Leading Operator of Specialist Holiday Businesses5
Preliminary Results 2004FINANCIAL HIGHLIGHTS
Turnover up 8.5% to £281.6m (2003: £259.5m)
Profit before tax £28.0m (2003: £27.9m)
Dividend up 10%
Net debt reduced by £10.8m
2005 capital expenditure c.£7.0m lower than 2004
24 % ROIC (2003: 24%)
The UK’s Leading Operator of Specialist Holiday BusinessesThe UK’s Leading Operator of Specialist Holiday Businesses6
Preliminary Results 2004PROFIT &LOSS ACCOUNT
All stated before goodwill and exceptional costs
2004 2003
£m £mTurnover 281.6 259.5 +8.5%Gross Profit 72.3 69.7 +3.8%Operating Profit 31.4 31.8 -1.3%Profit before Tax 28.0 27.9 +0.6%Earnings per Share 44.0p 44.4p -0.9%Dividend per Share 24.2p 22.0p +10.0%Dividend cover 1.8x 2.0x
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Exceptional Costs- Relocation of Keycamp (£1.6m)- Internal reorganisation (£1.0m)
Goodwill Impairment (£5.3m)- Relates to Eurosites acquisition (2002)
Preliminary Results 2004EXCEPTIONALS
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Preliminary Results 2004DIVISIONAL RESULTS
All stated before goodwill and exceptional costs
Hotel Breaks Adventure Camping Group£m £m £m £m
Turnover 2004 120.9 37.4 123.2 281.6v 2003 +23.6% +12.3% -4.0% +8.5%
Gross Profit 2004 25.4 10.6 36.3 72.3v 2003 +28.5% +15.2% -10.8% +3.8%
PBIT 2004 14.5 3.2 13.7 31.4v 2003 +31.6% +65.3% -27.2% -1.3%
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Net assets increased to £36.5m (2003 : £35.2m)
Net debt reduced to £12.5m- Gearing 33.8% (2003 : 66.3%)
Eurosites acquisition- Goodwill impairment (£5.3m)- VAT recoverable (€3.5m)
Holidaybreak plcBALANCE SHEET
The UK’s Leading Operator of Specialist Holiday BusinessesThe UK’s Leading Operator of Specialist Holiday Businesses10
Reduced capital expenditure (net)- 21% lower in 2004 (£13.5m)- Will be £7.0m lower in 2005
Mobile-homes- Capacity reduced in 2005 by 11% c. 9,600- Replacement expenditure of £5.3m (2004 : £11.4m)- Continue to achieve net book value on disposal: 1,400 units
sold in 2004, generating £4.3m proceeds in 2004- Extending life
Preliminary Results 2004CAPITAL EXPENDITURE & DISPOSALS
The UK’s Leading Operator of Specialist Holiday BusinessesThe UK’s Leading Operator of Specialist Holiday Businesses11
Net debt reduced by £10.8m
Mobile-home capex largely financed through new HP
Interest cover 9.4 times (2003 : 8.2x)- Pre-goodwill and exceptionals
Currency and interest rate hedging in place
Headroom in bank facilities - seasonality
Preliminary Results 2004CASH FLOW
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Preliminary Results 2004CASH FLOW SEASONALITY
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20.0
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120.0
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
£m
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Low fixed costs in Hotel Breaks and Adventure
Double digit margins – well above travel industry norms
All divisions cash generative
Healthy return on invested capital
Low gearing
Holidaybreak plcFINANCIAL SUMMARY
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Holidaybreak plcPRELIMINARY RESULTS 2004
CHIEF EXECUTIVE’S REVIEW
RICHARD ATKINSON
The UK’s Leading Operator of Specialist Holiday BusinessesThe UK’s Leading Operator of Specialist Holiday Businesses15
Holiday taking and expenditure increasing
Consumer demand:- Holidays shorter and taken more often- Activity/special interest- Demographics- Control and flexibility
Market change:- Internet- Inexpensive and accessible flights- Later booking
Holidaybreak plcMARKET OVERVIEW
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Balanced portfolio of specialist holiday businesses
Market leadership
Concentrate on margins and cash generation
Organic growth
Complementary acquisitions
Holidaybreak plcGROUP STRATEGY
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Group’s biggest profit earner in 2004
Strongly cash generative
Short-break holiday demand increasing
250+ hotel suppliers, 3,000+ hotels (UK and overseas)- Gives hotels cost effective distribution at attractive yields whilst
supporting price integrity- No commitment room allocations : fixed selling margin
Multi-channel distribution- Supplies 80% of all leisure hotel bookings made in UK travel agents - Superbreak.com increasing share of internet - Direct and partnership marketing increasingly important
Hotel BreaksOVERVIEW
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1.7m bookings (pax) in 2004 (2003: 1.4m)- Turnover up 24% (impact of Bridge Britain acquisition c.3%)
European breaks growth increased as year progressed (+21%) - Successful launch of Beach Breaks - Continuing into 2005
New promotional partnerships – Visit London, Legoland, P&O, W H Smith, Ticketmaster
2005 sales at +10% year on year
Hotel capacity readily available - Portfolio increasing- Terms of trade unchanged- Building long term relationships
Hotel BreaksPERFORMANCE & OUTLOOK
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Increasing demand for active and special interest holidays - Diminished geopolitical concerns
UK market leader in ‘soft’ adventure and scuba diving holidays - Difficult or impossible to replicate: adding unique value to the customer
experience
Tight control of tour load factors underpins margin and profitability - No flight commitments (except RegalDive)
New product development an important growth driver - Family, Adventure Breaks, Cycle, Rail, Walking & Trekking
Distribution range extending - Internet: on-line bookings now available
AdventureOVERVIEW
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41,800 bookings (pax) in 2004 (2003 : 37,400) - Turnover up 12% - momentum built as year progressed- Higher tour load factors, improved margin (5.7% to 8.4%)- Out of favour destinations (India, Egypt, China) ‘bounce back ‘
Strong recovery by RegalDive- 15% of sales, 11% of operating profit
2005 sales at +34% year on year - First quarter very strong – volumes and load factors
Product development continues - 400+ tours to 107 countries - New product launch - Explore ‘On Foot’
AdventurePERFORMANCE & OUTLOOK
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Self-catering holidays in good quality accommodation- Desirable locations with excellent leisure amenities - Flexibility, independence, informality, added value services
Market leading brands (Eurocamp and Keycamp)
- High levels of customer satisfaction and repeats
Profitable, high margin, cash generative business
Focused on profit turnround in 2005
Restructure - more focused organisation
- New appointments- Keycamp relocation
Medium term strategy- Keycamp/Eurocamp differentiation- Distribution brands: Easycamp, Ugogo.com- Stronger, more diverse communication of product benefits- Cost control and yield management
CampingOVERVIEW
The UK’s Leading Operator of Specialist Holiday BusinessesThe UK’s Leading Operator of Specialist Holiday Businesses22
141,600 bookings/570,000 pax (2003: 144,400 bkgs/ 580,000 pax) - Turnover 4% below 2003- Late booking trend continued
Camp-site occupancy down 4% compared to 2003 - Shift in demand away from Mediterranean destinations
Yield improvement and unit cost reduction- 2005 capacity reduced by 11% (tents and mobiles), lower capex- 2005 sales at –5% year on year- Keycamp relocation (£1m annualised saving)- General/marketing overhead savings (£1m)
Increased resource for IT/e-commerce development - Rollout of on-line bookings to all brands/territories - Launch of Ugogo.com
Camping PERFORMANCE & OUTLOOK
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Holidaybreak plcGROUP PROSPECTS
2005 trading currently in line with expectations
Hotel Breaks and Adventure continue to grow
Camping – tightly controlled to meet financial requirements
Opportunities for both organic and acquisition based growth
Holidaybreak will continue to trade at very good margins, generate cash and provide an attractive dividend for its shareholders
The UK’s Leading Operator of Specialist Holiday BusinessesThe UK’s Leading Operator of Specialist Holiday Businesses24
The UK’s Leading Operator ofThe UK’s Leading Operator of Specialist Holiday BusinessesSpecialist Holiday Businesses
The UK’s Leading Operator of Specialist Holiday BusinessesThe UK’s Leading Operator of Specialist Holiday Businesses25
Holidaybreak plcPRELIMINARY RESULTS 2004
BACKGROUND INFORMATION
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Preliminary Results 2004BALANCE SHEET
2004 2003
£m £mFixed Assets 70.6 72.0Goodwill 36.2 44.2Net Current Liabilities (51.7) (53.0)Deferred Tax (6.1) (4.6)Net Debt (12.5) (23.4)Net Assets 36.5 35.2
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Preliminary Results 2004CAPITAL EXPENDITURE & DISPOSALS
£m Mobile- Camping Other Totalhomes Equipment Assets
Opening NBV 57.0 7.0 8.0 72.0Additions 11.4 4.8 1.6 17.8Disposals (3.2) (0.7) (0.2) (4.1)Depreciation (8.5) (5.2) (1.4) (15.1)Closing NBV 56.7 5.9 8.0 70.6
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Preliminary Results 2004MOVEMENT IN NET DEBT
2004 2003£m £m
Operating Cash Flow 46.3 47.4Acquisitions - (2.3)Capital Expenditure (Net) (13.5) (17.1)Interest (4.0) (3.7)Tax (7.5) (6.0)Dividends (10.7) (9.4)Shares issued (net of purchases) 0.2 0.1Reduction in net debt 10.8 9.0
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Preliminary Results 2004FACILITY UTILISATION
0.0
20.0
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100.0
120.0
April 2004 Total Facilit ies
Bonding &Guarantees
Ring-fenceddeposits
Credit card cashcover
Cash/ RCF
Term loans
£m
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Hotel BreaksBUSINESS MODEL
Accommodation
Ancillaries
Agents
Customer
SUPERBREAK
- Efficient cost distribution
at reasonable yields for
suppliers
- High service levels,
convenience and value
for customers and agents
VALUE ADDED DISTRIBUTION
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CLASSIC TOUR OPERATING MODEL
AdventureBUSINESS MODEL
Accommodation
Tour Content
Customers
EXPLORE
- Tour origination and operation- High value added- Very difficult for DIY customer to replicate
Transport
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HYBRID MODEL – PART TOUR OPERATOR, PART PRINCIPAL
CampingBUSINESS MODEL
Transport Operators
Customers
Camp-sitesEUROCAMP/KEYCAMP- On site service- Accommodation- Access to best sites- Strongly branded- Effective distribution
Equipment Suppliers
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Ugogo.comLAUNCHING 6/12/04