Investor day windmill hill sussex 24 th september 2009 l.jpg
This presentation is the property of its rightful owner.
Sponsored Links
1 / 37

Investor Day Windmill Hill, Sussex 24 th September 2009 PowerPoint PPT Presentation


  • 130 Views
  • Uploaded on
  • Presentation posted in: General

Investor Day Windmill Hill, Sussex 24 th September 2009. Introduction – John Coleman Financial Overview – Bob Baddeley Education – Martin Davies Hotel Breaks – Nick Cust Adventure – Bob Baddeley Camping – Steve Whitfield Q&A. INVESTOR DAY PRESENTATION. CHAIRMAN JOHN COLEMAN.

Download Presentation

Investor Day Windmill Hill, Sussex 24 th September 2009

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


Investor day windmill hill sussex 24 th september 2009 l.jpg

Investor DayWindmill Hill, Sussex24th September 2009


Slide2 l.jpg

Introduction – John Coleman

Financial Overview – Bob Baddeley

Education – Martin Davies

Hotel Breaks – Nick Cust

Adventure – Bob Baddeley

Camping – Steve Whitfield

Q&A

INVESTOR DAY PRESENTATION


Slide3 l.jpg

CHAIRMAN

JOHN COLEMAN


Introduction l.jpg

INTRODUCTION

  • IMS released on 23rd September

  • No new material information will be released today

  • The Group continues to perform well, given the current economic environment, and in line with management expectations

  • The Group continues to carefully manage its cash and borrowings

  • Year-end net debt is expected to be approximately £130m

  • Education performing well:

    • Windmill Hill opened on time and on budget

    • Liddington acquisition first use of rights issue proceeds

  • Strong late bookings in Camping & Adventure

  • Hotel Breaks benefiting from improved supplier offers (lower room rates and train fares)

  • CEO recruitment process underway


Outlook l.jpg

OUTLOOK

  • Group remains focused on cash generation and cost control across its businesses in expectation of continued challenging trading conditions

  • Opportunities for investment and growth – especially in Education

  • Education is 62% booked for 2009/10

  • Hotel Breaks will benefit from less challenging comparatives

  • Adventure in the process of being restructured

  • Camping will continue to manage capacity, occupancy and yield tightly


Slide6 l.jpg

GROUP FINANCE DIRECTOR

BOB BADDELEY


Action taken to manage costs and cash l.jpg

ACTION TAKEN TO MANAGE COSTS AND CASH

Camping mobile-home net capital expenditure (£5m) below depreciation (£7m), 440 new units vs 950 originally proposed

Superbreak’s call centre resource reduced by a third

Explore restructured - staffing reduced by 35% aimed at maintaining operating margins

Earlier full payment and/or larger deposits from Camping customers

Full year dividend cut by 50%


Slide8 l.jpg

FINANCES

  • Net Debt at 30 September 2009 expected to be c. £130m

  • Long-term committed credit facilities in place

  • Sufficient headroom against covenants to counter possible weaker trading conditions

  • Forex exposure for current year substantially covered at favourable rates

  • - 2010 exposure 60% hedged

  • Interest costs are 80% fixed


Investment in education l.jpg

INVESTMENT IN EDUCATION

Plc investment in Education Division in 2008/09 will achieve ROCE > WACC

The Group uses IRR as the measure of performance for PGL Centres as opposed to ROCE:

Site maturity can take up to 3 years so Years 1 & 2 ROCE will be depressed due to development cycle

Caythorpe Court, which opened in 2006 with 400 beds, is expected to achieve an IRR well in excess of 20% from an investment of £13.8m

PGL centres at Windmill Hill and Liddington are expected to achieve IRRs of over 20%


Slide10 l.jpg

EDUCATION DIVISION

MARTIN DAVIES


Division overview l.jpg

DIVISION OVERVIEW

High margins

A market-leading position

Very high barriers to entry

Strong demand conditions

Under supply

Weak competitor proposition in activity centres

Visible income


Growing market l.jpg

GROWING MARKET

Market for residential education centres has grown at ca.10% p.a. in last five years, driven by reduction in funding of LEA centres and Governments Out of Classroom Learning directive

Growth in educational school trips due to decline in schools doing own ‘DIY’ trips and some increase in proclivity to do trips with an expanded syllabus

School ski market believed to be static (and subject more to vagaries of Easter/half term timing) – unclear educational value

Overall UK market estimated at £350m- £400m (but greater if UK based trips added)

Potential is large: NST/PGL have only 5k core repeaters amongst 27k UK schools


Pgl centres l.jpg

PGL CENTRES

Albatros, Côte d'Argent

Barton Hall, South Devon

Beam House, North Devon

Boreatton Park, Shropshire

Caythorpe Court, Lincolnshire 

Château de Grande Romaine

Château du Tertre

Club Mimosa, Languedoc Coast

Court Farm, Wye Valley

Domaine de Segries, Ardèche

Dalguise, Perthshire

Hameau-les-Ages, Dordogne 

Hillcrest, Wye Valley

La Fosca, Costa Brava

Le Pré Catelan, Opal Coast

Liddington, Wiltshire

Little Canada, Isle of Wight

Llwyn Filly, Brecon Beacons

Loch Ranza, Isle of Arran

Lou Valagran, Ardèche

Marchants Hill, Surrey 

Osmington Bay, Dorset

Shorefield Country Park, Hampshire 

Tregoyd House, Brecon Beacons

Whitecliff Bay, Isle of Wight

Whitemead, Forest of Dean

Windmill Hill, East Sussex

Winmarleigh Hall, Lancashire


Current performance 1 l.jpg

CURRENT PERFORMANCE (1)

  • Sales intake for 2008/09 currently 7% above last year on a like-for-like basis

  • PGL centres growing at 12% for 2008/09 and 4% next year

  • Overall 100% booked for 2009 and 87% for 2010 (with over £31.9m in forward bookings in PGL centres)

  • Education less impacted by the recession


Current performance 2 l.jpg

CURRENT PERFORMANCE (2)

  • Windmill Hill in Sussex opened May 15th

    • already 95% booked for 2010

    • on course to achieve Group target IRR

  • PGL’s UK adventure centre capacity now at 7,000 beds

  • Potential to grow UK bed stock at 5-10% per annum

  • NST synergies now above plan


Liddington l.jpg

LIDDINGTON

  • 100+ acre site with outdoor activity field, floodlit pitch, two lakes, parking etc.

  • Good access via motorway to London

  • Access to 17.8m population and 27% of schools in 2 hours drive time.

  • Ready to trade with minimal capex

  • Potential for significant bed stock expansion at low cost

  • Planned investment of £3.2m over 2010 – 2012

  • Target IRR in excess of 20%

  • Caythorpe Court opened in 2006 –total investment of £13.8m now achieves target IRR


Significant further opportunities l.jpg

SIGNIFICANT FURTHER OPPORTUNITIES

Potential areas in which to add new

outdoor education centres

North East & Scottish

Borders

N. and E.

London (M25)

Ireland (subject to research validation)

West London &

M4 Corridor

IOW/choice coastal sites


Slide18 l.jpg

Consolidation

“Winners” will provide out of classroom products for wide age range

PGL Brand

Opportunity to increase the size of the business to match reputation

Synergies

Benefits in overhead reduction, market pricing, market segmentation, gross margin and sales team

People

Chance to develop second tier management and acquire additional expertise

Strategic Partnerships

To meet all schools’ residential out of classroom learning needs

Potential for investment in partnership for long term stability

Broadening of brand proposition

Opportunity to broaden offer to 18+ market via Studytours brand and Gap Year product

Horizontal integration

Opportunity to work with language schools to sweat asset base during low season

RATIONALE FOR ACQUISITIONS


Slide19 l.jpg

Profitable and cash generative business

Established market leader

Generic brand

Growth markets

Superb reputation

Loyal customer base with significant repeat revenues

Visible income

Consolidation platform

Quality asset backing including strong freehold property

Management team with a record of success

Opportunity to grow

SUMMARY


Slide20 l.jpg

HOTEL BREAKS

NICK CUST


Hotel breaks division l.jpg

HOTEL BREAKS DIVISION

  • As at 19th September sales intake for 2008/09 at -2% yoy

  • Bookit demonstrating counter cyclical characteristics

  • West End benefiting from ‘professionalising’ and uplifting web presence

  • Superbreak struggling with ‘bed bank’ overseas hotels but UK volumes strong


Hotel breaks division superbreak l.jpg

HOTEL BREAKS DIVISIONSuperbreak

  • Overseas:

    • Bed bank bubble has burst

    • Our decline in line with non-aligned competitors

    • Still delivers full margin

    • 11% of divisional turnover


Hotel breaks division superbreak23 l.jpg

HOTEL BREAKS DIVISIONSuperbreak

  • UK:

    • Volumes running consistently ahead of values

    • No pressure on gross margin from hotels

    • Travel agents increased from 46% to 55% in 2 years

    • National Express discount rail fares in place until 31 October 2010

    • Packaging our key differentiating factor


Hotel breaks division bookit l.jpg

HOTEL BREAKS DIVISIONBookit

  • Growing distribution through other channels

  • Lower hotel prices, plentiful availability, modest hotel commission increases

  • Dutch customers very value focussed

  • Simple websites divided by length of stay

  • High brand recognition within a small country

  • Bungalows 30% of sales mix in 2008, 32% in 2009 – replicate hotel commission increases


Hotel breaks division west end theatre bookings l.jpg

HOTEL BREAKS DIVISIONWest End Theatre Bookings

  • Strong strategic fit with Superbreak and NST

  • Exclusively low prices and unlimited supply

  • New distribution channels:

    • Airmiles, concierges, inbound, web

  • Better buying decisions – less commitments

  • Customers buying affordable treats


  • Slide26 l.jpg

    ADVENTURE

    BOB BADDELEY


    Slide27 l.jpg

    OVERVIEW

    • Diverse portfolio of brands: EXPLORE!; DJOSER nl; THE TRAVELPLUS GROUP; REGAL

    • Provides value added services: hard to recreate individually

    • Industry structure: fragmented, highly competitive, high knowledge requirement, high margin/costs

    • Flexible product dimension: ‘open’ and ‘closed’ groups, small groups, individuals and families

    • Business characteristics: low fixed costs, minimum commitments, constant innovation

    • Sales for 2008/09 currently +4% but -20% for 2009/10


    Explore restructuring l.jpg

    EXPLORE! RESTRUCTURING

    Demand adversely affected by higher prices due to the weakness of sterling, although certain softer-currency destinations, such as Turkey, are performing reasonably well

    In the recessionary environment, discretionary nature and relatively high absolute prices have led to weaker demand than our other divisions

    Move towards later booking pattern over the summer

    50 heads taken out (c.40% of staff)

    Business will be profitable on passenger numbers 30% lower than 2007/8 (currently c.20% down)

    Adventure Division remains profitable


    European businesses l.jpg

    EUROPEAN BUSINESSES

    Djoser

    Good late bookings

    Benefiting from the recent decision by the Dutch government to scrap the airport departure tax at Schiphol

    Able to pass on reductions in airline fuel surcharges and supplier costs while maintaining margins

    Travelplus

    German language-trip and gap-year specialist

    Trading well and up both in volume and revenue terms

    The business is benefiting from the fact that the trips it offers are less easily deferred, of educational benefit and often paid for by parents


    Slide30 l.jpg

    CAMPING

    STEVE WHITFIELD


    Slide31 l.jpg

    OVERVIEW

    Eurocamp and Keycamp

    • Market leading brands

    • Quality value for money product with flexibility and choice

    • High satisfaction levels and loyalty

    • Strong pan-European sales and marketing

    • Large segmented databases

    • Disciplined capacity planning and yield management

    • Cash generative (capex < depreciation)

      Eurocamp Independent

    • Pitch and ferry reservation service

      Easycamp / Ecamp

    • Value based holidays in site owned Mobile Homes

    • Low risk model well placed for growth


    Slide32 l.jpg

    PROSPECTS

    • Later booking profile

    • Focus on maximizing occupancy and yields

    • Strength of the euro has increased the sterling equivalent yields from Dutch and German bookings

    • High season demand will exceed supply

    • Low season sales more challenging as customers forego second breaks in favour of their main holiday


    Slide33 l.jpg

    BROADENING THE OFFER

    • Safari tents, introduced on a test basis this summer, are proving popular.

    • Good initial response to our UK camping offer, which we launched in May in partnership with the National Trust and Forest Holidays.


    Slide34 l.jpg

    Q&A


    Slide35 l.jpg

    APPENDICES


    Interim divisional results l.jpg

    INTERIM DIVISIONAL RESULTS

    *Before amortisation of acquired intangible assets, impairment of goodwill and exceptional restructuring costs.

    **Before amortisation of acquired intangible assets, IAS 39 revaluation of interest and currency derivatives, impairment of goodwill and exceptional restructuring costs.


    Slide37 l.jpg

    CREDIT FACILITIES

    • £265m Five year facility committed to 2013

    • - £40m Term Loan

    • - £225m RCF, Bonding and Ancillary Facility

    • - still require £37.6m in CAA, ABTA, IATA and other bonds

    • Initial Margin 325bps + LIBOR

    • - ratchet down to 250bps + LIBOR below 2x EBITDA leverage

    • Costs c.£4.8m at 31st March

    • - Annual amortisation cost of £1.2m


  • Login