PRELIMINARY RESULTS 2003
description
Transcript of PRELIMINARY RESULTS 2003
1
PRELIMINARY RESULTS 2003
2
• Results overview
• Financial review
• Divisions - performance, prospects and strategy
• Group strategy and prospects
Holidaybreak plcPRELIMINARY RESULTS 2003
3
• Robust performance - well placed for
opportunities ahead
• Turnover : £259.5m
• Headline Profit Before Tax : £27.9m (+3.1%)
• Headline EPS : 44.5p (+4.4%)
• Dividend : 22p (+10%)
• Generated £9m net cash
Preliminary Results 2003CHAIRMAN’S STATEMENT (1)
4
2003 in RetrospectTERRORIST ACTIVITY
5
2003 in RetrospectIRAQ WAR
6
2003 in RetrospectSARS
7
2003 in Retrospect FINANCIAL MARKET WEAKNESSES
8
2003 in Retrospect LONG HOT SUMMER
9
• Divisional performance :
- Camping recovered strongly from weak early markets
- Another outstanding year for Hotel Breaks
- Adventure again held back by geopolitical events
• Encouraging start to 2004 from Hotel Breaks and
Adventure
• Well placed to meet challenges - longer term
prospects excellent
Preliminary Results 2003CHAIRMAN’S STATEMENT (2)
10
Preliminary Results 2003PROFIT & LOSS ACCOUNT
2003 2002
Group Group
£m £mTurnover 259.5 218.7 +18.6%Gross Profit 69.7 62.6 +11.3%Operating Profit 31.8 29.2 +8.9%Profit before Tax 27.9 27.1 +3.1%Earnings per Share 44.4p 42.5p +4.5%Dividend per Share 22.0p 20.0p +10.0%
All stated before goodwill and exceptional costs
11
Preliminary Results 2003 DIVISIONAL RESULTS
Camping Hotel-Breaks Adventure Group£m £m £m £m
Turnover 2003 128.4 97.8 33.3 259.5v 2002 +17.6% +27.1% +2.1% +18.6%
Gross Profit 2003 40.7 19.8 9.2 69.7v 2002 +5.2% +27.7% +9.5% +11.3%
PBIT 2003 18.9 11.0 1.9 31.8v 2002 (0.6%) +41.1% (20.8%) +8.9%
All stated before goodwill and exceptional costs
12
Preliminary Results 2003 EXCEPTIONAL COSTS
• Reorganisation costs relating to Eurositesacquisition £2.7m
- Assets written-off £0.7m
- Rebranding and resiting mobile-homes £0.6m
- Redundancies £0.6m
• Advisers fees relating to aborted acquisitions £0.4m
• Write-down of fixed asset investments £0.6m
13
Preliminary Results 2003 BALANCE SHEET (1)
2003 2002
£m £mFixed Assets/Investments 75.1 75.2Goodwill 44.2 45.4Net Current Liabilities (53.0) (48.7)Deferred Tax (4.6) (6.0)Net Debt (23.4) (32.4)Net Assets 38.3 33.5
14
Preliminary Results 2003 BALANCE SHEET (2)
• Fixed Asset Investments written down by £0.6m
• Prior year adjustment re goodwill previously
written-off
- reduces net assets at 1 October 2001 by £3.6m
• Net debt reduced to £23.4m
- gearing 61.3% (2002 : 96.7%)
• Goodwill on Bridge acquisition impaired
15
Preliminary Results 2003 CAPITAL EXPENDITURE & DISPOSALS (1)
£m Mobile- Camping Other Totalhomes Equipment Assets
Opening NBV 54.9 9.0 8.1 72.0Additions 16.1 3.8 1.6 21.5Disposals (5.0) (0.7) (0.2) (5.9)Depreciation (9.0) (5.1) (1.5) (15.6)Closing NBV 57.0 7.0 8.0 72.0
16
• Total capex 40% higher than 2002
• Net spend on mobile-homes £11.1m
- increase capacity by 5.5%
- replacement expenditure £10.5m
• Mobiles continue to achieve
book value on disposal
- disposal proceeds £4.3m
Preliminary Results 2003 CAPITAL EXPENDITURE & DISPOSALS (2)
17
Preliminary Results 2003 MOVEMENT IN NET DEBT
2003 2002£m £m
Operating Cash Flow 47.4 54.0Acquisitions (2.3) (31.0)Capital Expenditure (Net) (17.1) (13.3)Interest (3.7) (2.2)Tax (6.0) (7.0)Dividends (9.4) (8.5)Loans repaid/Shares issued 0.1 0.7Reduction (Increase) in net debt 9.0 (7.3)
18
• Net debt reduced by £9.0m
• Capex largely financed through new HP (57%)
• Capex requirement 2004 & beyond
• Interest cover 6.5 times (2002 : 12.3)
• Currency and interest hedges in place
• Headroom in bank facilities
Preliminary Results 2003 CASH FLOW
19
Holidaybreak plcBUSINESS STRENGTHS
• Market leaders
• Service and Product Quality
• Multi-channel distribution
• Healthy margins - well above travel industry norms
• Flexible cost structures and products
• Strong cash generation
20
• All divisions will generate organic growth
• Exploit and adapt to key consumer and supply side trends
• Active product and distribution development programmes
• Small ‘bolt-on’ acquisitions to act as a catalyst and open up new opportunities
• Larger scale ‘fourth leg’ acquisition also a possibility
- at right value- not mainstream package tour operating
Holidaybreak plcGROUP STRATEGY
21
• Weak early market, slow start - strong recovery after end of Iraq war
• Like for like sales (including Eurosites) 6% down year on year (capacity : -4%)
• Exceptional summer
- may have deterred some late bookings
- high customer satisfaction levels
• Eurosites integration went smoothly
- £1.6m synergies exceeded expectations
- year on year bookings performance weaker than Eurocamp and Keycamp
Camping2003 PERFORMANCE
22
• Mainstream market summer 2004 bookings up to 30% down
• Eurosites now integrated into Eurocamp and Keycamp
• Capacity : -8% planned
• Sales to date : -20% like for like
• New Year bookings expected to be much stronger than equivalent ‘war build up’ period in 2003
CampingTRADING AND PROSPECTS
23
• Current MD Jim Crew will retire in the New Year once successor appointed
• Recruitment process already well advanced
• Key appointment
- Core business of the Group and biggest profits generator
- Will also sit on plc Board
CampingMANAGEMENT
24
• Sector resilient with high levels of customer loyalty to both brands and holiday type
• Holidays must be attractive and good value - aim to deliver consistently high quality product and service standards
• Growth drivers :
- Trends from lower priced, lower margin tents to higher priced, higher margin mobile-homes plus upgrades within mobile-home range
- Increased penetration of ‘mainstream’ self-catering markets
- Greater capacity and support for premium Eurocamp and Keycamp brands
- Easycamp : 2003 launch of ‘no frills’ product in Holland/Germany
CampingSTRATEGY
25
• Favourable market conditions - demand and supply sides
• Growth through all main distribution channels - high street agents (50%), internet (25%) and direct (20%)
• Acquisitions of Bridge Britain and London Travel Service from MyTravel in March 2003
• European Cities 190% year on year - now 9% of total sales
Hotel Breaks2003 PERFORMANCE
26
Hotel BreaksTRADING AND PROSPECTS
• 2004 sales 37% up year on year
• Internet still growing strongly
• Continuing benefits of Bridge acquisition
• Official accommodation provider
(web and telephone) for Visit London
campaign (ex-LTB)
• European Beach Breaks programme
27
• Favourable consumer trends
• Simple business model - resilient, cash generative and very flexible cost base
• Multi-channel distribution - internet a major growth driver but high street agents still a key element in distribution mix
• Constant search for new distribution opportunities and product extensions - further small bolt-on acquisitions possible
Hotel BreaksSTRATEGY
28
• Good first quarter but trading deteriorated rapidly as Iraq war approached
• SARS, terrorist incidents (Bali, Morocco) and threats (East Africa) and regional conflicts (India/Pakistan, Nepal) also had a negative impact
• Regions not directly affected performed well e.g. South America, Europe and South Africa
• Load factors and gross margins maintained
Adventure2003 PERFORMANCE
29
• 2004 sales 8% up year on year
• Sales rebound in regions negatively affected in 2003 e.g. India, Thailand, Egypt (important forRegalDive)
• Progress in various areas
- New products (Adventure Breaks, Family, Cycle, Rail)- Brand strategy refocused
- Internal systems and organisation
• Cautiously optimistic
AdventureTRADING AND PROSPECTS
30
AdventureSTRATEGY
31
Strategy - Travel Industry TrendsKEY STRUCTURAL INFLUENCES
TRAVELRigid,
vertically integrated
tour operating
model under threat
Distribution Fragmenting
Later
Bookings
Consumer holiday trends- shorter more frequent- more independent/tailor made/flexible- holidays with purpose
InternetLow cost airlines
32
Environmental ChangesIMPACT ON HOLIDAYBREAK
impact on Adventure
Complements existing distribution channels for specialist holiday businesses. Key growth driver for hotel breaks
Low-costAirlines
Positive for Camping and Hotel Breaks. No
DistributionFragmenting
All Holidaybreak businesses use multi-channel distribution - not over reliant on high street agents
Internet
Later Bookings Camping still an early booking business (40%pre-Christmas) - family market still has to plan
Consumer TrendsHolidaybreak businesses give consumerschoice, flexibility and alternatives to standardpackages
VerticalIntegration
Holidaybreak businesses not verticallyintegrated
33
ProspectsKEY CURRENT ISSUES AND EVENTS
TRAVEL
Strengthening Euro
Weakening Dollar
Exceptional UKsummer weather
Geopolitical
Uncertainty
ConsumerConfidence
34
ProspectsCURRENT ISSUES AND EVENTS
Consumer Confidence
Geopolitical Uncertainty
Euro still ‘mid-range’ in historical terms.Natural hedge for Camping due to Eurorevenues. Weak dollar positive forAdventure.
Strengthening Euro Weakening Dollar
Camping and Hotel Breaks relatively ‘safe’holiday choices. Adventure has exposurebut many alternative destinations.
Exceptional UKSummer Weather
Still strong in UK. Weaker in main Europeanmarkets for Camping
Should benefit Camping and Hotel Breaksin 2004.
35
• Strong cash generative businesses
- Resilient performance in 2003
- Well placed to benefit from holiday sector brands
• Strategy of seeking steady organic growth supplemented by appropriate acquisitions at right value (debt capacity available)
• Record shows 10-15% EPS and dividend growth. This remains our aspiration
• Encouraging start to 2004 by Hotel Breaks and Adventure. Post New Year bookings a key indicator for Camping
Preliminary Results 2003 OVERVIEW AND SUMMARY