Interim Results 2008 May 2008

Interim Results 2008Interim Results 2008

May 2008

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


Highlights

Interim results- Revenue growth of 55%- Solid performance- DPS + 5%

Current trading broadly in line with expectations

Great potential for future growth

Interim Results for the six Interim Results for the six months ended 31 March 2008months ended 31 March 2008


FINANCE DIRECTOR’S REVIEW

BOB BADDELEY


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%


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


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)


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)


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


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


CURRENCY

23% of Group EBITA in € zone

Other net exposure- c. €53m- c. $26m

Forward contracts in place for 2008 but not for 2009


CEO REVIEW

CARL MICHEL


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


Building on core competencies

Develop a multipath approach

Pursue sustainable faster growth

Diversify sales mix

PROGRESS AGAINST STRATEGIC THEMES


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


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


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


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


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


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

Documents

Interim Results 2008 May 2008