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Introduction

Introduction. Good results which demonstrate solid profit growth, stringent cost control and strong operating margin performance Net debt reduced by £38.4m following a strong focus on cash management Continued focus on growing the Education Division

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Introduction

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  1. Introduction • Good results which demonstrate solid profit growth, stringent cost control and strong operating margin performance • Net debt reduced by £38.4m following a strong focus on cash management • Continued focus on growing the Education Division • Acquisition of stake in student and school tour accommodation group Meininger

  2. Acquisition of Meininger • Consideration for 50% stake is €36.5m (£30.9m); option to acquire remaining shares over 2-3 years • Major development into pan-European educational travel • Unique provider of bespoke accommodation for the school tours market • Existing long-term, successful relationship with NST • Strong growth model - potential to roll out product to other key school trip destinations Holidaybreak: leading the educational travel market

  3. Group resultsJohn Coleman, Chairman

  4. Group results 1 Stated before amortisation of acquired intangible assets of £1.8m (2009: £3.5m), impairment of goodwill of £nil (2009: £9.6m) and separately disclosed items of £1.2m (2009: £1.6m). Headline PBT and headline EPS are also stated before IAS 39 mark-to-market revaluations of financial derivatives of £1.7m (2009: £8.3m) and, for headline EPS, the tax effect thereof of £1.0m (2009: £3.6m). 2 Restated following adoption of amendments to IAS 38 ‘Intangible assets’ and IFRS 2 ‘Share-based payments’.

  5. Divisional results 1 Stated before amortisation of acquired intangible assets of £1.8m (2009: £3.5m), impairment of goodwill of £nil (2009: £9.6m) and separately disclosed items of £1.2m (2009: £1.6m). 2 Restated following adoption of amendments to IAS 38 ‘Intangible assets’ and IFRS 2 ‘Share-based payments’.

  6. Movement in net debt 1 Stated before impairment of goodwill of £nil (2009: £9.6m) and IFRS 2 charge re: share-based payments of £0.7m (2009: £0.5m) 2 Restated following adoption of amendments to IAS 38 ‘Intangible assets’ and IFRS 2 ‘Share-based payments’.

  7. Balance sheet 1 Restated following adoption of amendments to IAS 38 ‘Intangible assets’ and IFRS 2 ‘Share-based payments’.

  8. Net debt and facility utilisation • Net debt at 30 September was £99.7m (2009: £138.1m) • Margin on bank borrowings reduced from 300bps to 250bps [w.e.f. 03/11/10] • Peak facility utilisation took place in December and January during the 2010 financial year • Interest is after £4.7m for hedges due to expire between January 2012 and October 2013

  9. Cost control and cash management • Increased focus on working capital management • Camping mobile-home net capital expenditure at £3.2m below depreciation of £7.2m, investing in 450 new units • Substantial reduction in corporate tax payments in 2010 compared to 2009 • Prudent dividend policy

  10. Financial summary • Revenue: -2.5% • Headline PBT: +8.9% • Headline operating margin: 9.5% • Net debt at 30 September 2010: £99.7m • Able to fund investment in Education from existing resources

  11. Group Chief Executive’s ReviewMartin Davies

  12. Group Strategy

  13. Core skills in the Group • Expertise in delivering lifelong learning, exploratory and active travel experiences • First hand delivery of unique and valued products, with high customer loyalty • Core capabilities in school and adult groups, families, safety management and yield and asset management

  14. Commodity Leisure • Mainstream tour operators • Disintermediation threat • Low growth Camping • Value-added Leisure • Tour leaders, first hand delivery • Increasing demand • Richer experience • Out-of classroom Learning • Value-added • Non-leisure drivers • Social and political drivers Adventure PGL NST Meininger Travelplus – High School Language travel Travelworks • Education & Personal Development • Value-added • Non-leisure drivers Superbreak Bookit Sector positioning

  15. Holidaybreak plc Full Year Results 2010 Slide 15 Strength of business model • Brand strength • Product control • Defensibility • Competitive advantage Weaker Bookit Superbreak Camping Sector position Djoser Explore Travelworks Language High School NST Strong Meininger PGL Strong Weaker Business Model

  16. Strong business models in niche positions • Strong complementary skills in exploratory and life-enriching travel • Leading, attractive and profitable travel niches • Distinctive, unique businesses • Entrepreneurial management teams • Ownership of unique and valuable PGL centres Clear priorities WHERE WE ARE NOW WHERE WE ARE GOING How we look as a group • Take core skills into new markets and products • Common sense of purpose Grow International Presence Where we compete • More educational and personal development revenue; positive social and political trends • More revenue from existing and new overseas markets GrowEducation How we compete • Control of and exclusive access to valuable products and resources • Strengthened competitive advantage GrowEarnings How we build shareholder value • Strong cash flow • Strong profit margins • Resilient to recession • Earnings growth • Increased quality of earnings • Progressive dividends • Sensible approach to debt

  17. Meininger: Highlights • 50% stake at €36.5m (£30.9m) • Option to acquire remaining 50% over next 2-3 years; price dependent upon performance of business • For the year ended 30 Sept 2010: Unaudited revenue of €23.2m (£19.7m) • Unaudited statutory EBIT of €8.3m (£7.0m) and adjusted EBIT of €7.3m (£6.2m) • €7.8m of forward bookings for 2011 • High growth business model – bed capacity has grown by 60% in last 3 years to 3,800 beds

  18. Meininger: Next piece of the jigsaw • Fits with our core competencies in property, hospitality and safety management for children and school groups • Increases non-UK revenue mix and educational share of the Group • Suitable accommodation for school groups is limited; Meininger fills the gap, providing flexible bed and room structures

  19. “PGL in the city” • 28 sites in out of town locations • Bespoke accommodation; activities; health & safety • Tour operator model • Target school groups aged 8 to 12 • Very early booking profile • 10 sites in city centre tourist locations • Bespoke accommodation; health & safety • Accommodation only model • Target school groups aged 13 to 18 • Early booking profile

  20. Meininger: Creating a European leader • Expand offering to other key European school trip destinations; 5 sites contracted for 2011 • Access to German schools - potential to take our products to Germany • Potential for further development in school tours & activities in other European markets No. 1 educational travel provider in Europe

  21. Divisional Performance

  22. Education • Performance • Not materially affected by economic environment; parents prioritise expenditure on school trips • NST achieved strong margin growth as less profitable tours were removed from the programme • PGL invested £5.8m in its education centres (mainly Liddington). Expect to spend £1.2m on Liddington in 2011 • 100% re-booking from schools at Liddington • Strategy • Continue organic expansion at PGL and market share gains at NST

  23. Adventure • Performance • Strong recovery from recession; benefited from Explore’s 2009 cost reduction programme • Explore successful in margin control, tighter capacity management and cost control • Travelplus saw growth in its high school product • Djoser held up well in a difficult Dutch market • Strategy • Focus product development on lifelong learning experiences where there are strong drivers for growth

  24. Hotel Breaks • Performance • Demand in the UK and Netherlands affected by economic environment and extreme winter weather • Invested in a new Superbreak website with improved reservations system • WETB benefited from attractive theatre ticket deals • Strategy • Superbreak remains focused on growing B2C market; increasing packaged product mix and improving overseas product • Bookit continues to invest in its IT capabilities and will develop its inbound London product offering

  25. Camping • Performance • Pan-European distribution and natural hedging: strong peak sales performance - high demand from Germany, Switzerland and Poland mitigated shortfalls from the Netherlands • Capacity will be reduced by c.4% in 2011. Expect to spend £8.2m, net of disposals, on replacement mobile-homes and other camping equipment • Strategy • Mobile-home life extension programme will improve cash generation in medium term • Continue to focus on better customer segmentation to improve low season sales

  26. Current trading • Group sales intake is 1% below last year • Education and Adventure is 2% higher than last year • PGL centres are 88% booked • Hotel Breaks is 8% below last year • Camping is 6% below last year on 4% lower capacity.

  27. Summary and outlook • Group sales intake is in line with management expectations • Continued focus on cost control and cash generation • Resilient performance in a difficult economic environment • Major development into European educational travel through acquisition of Meininger

  28. Q & A

  29. Appendices

  30. Interest & currency hedges • 15% of Bank debt is at floating interest rates • Effective average interest rate, 8.73%, at revised margin and bank rate at 30 November • 22% of Group EBITA in € zone • Other net exposure • - c. €53m • - c. $20m • 72% of Group’s € and 78% of Group’s $ requirements for 2011 hedged at average rates of €1.18 and $1.56

  31. Banking facilities • £255m Five year facility committed to 2013 • - £30m Term Loan • - £225m RCF, Bonding and Ancillary Facility • - £30m in CAA, ABTA bonds • Margin LIBOR + 250bps • - margin ratchet at lower levels of debt • Costs c.£3.0m at 30 September • - Annual amortisation cost of £1.2m

  32. Disclaimer This document contains forward-looking statements with respect to the operations, performance and financial condition of Holidaybreak. By their nature, these statements are subject to risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed or implied because they relate to future events. Unless otherwise required by applicable law, regulation or accounting standard, we do not undertake to publicly update any forward-looking statements, whether as a result of new information, future developments or otherwise. The financial information referenced in this presentation does not contain sufficient detail to allow a full understanding of the results of Holidaybreak. For more detailed information, please see the full year results announcement for the year ended 30 September 2010 which can be found on the Investor Relations section of the Holidaybreak website – www. holidaybreak.co.uk

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