interim results presentation – may 2011. holidaybreak plc interim results 2011 slide 1...
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Interim Results presentation – May 2011
Holidaybreak plc Interim Results 2011 Slide 2
Introduction• Strong performance from Education (96% booked for
2011) • PGL UK centres 99% booked for 2011• Strong start to 2012 – 39% booked; PGL UK centres at
63%
• Excellent trading performance from Meininger; 2 new sites this year
• Resilient performance in tough operating conditions
• Traditional travel businesses affected by political disruption (Adventure) and a weak consumer market (Hotel Breaks)
• Focus on cash generation, margin and cost control
• Expect to meet management expectations for the full year; interim dividend increased by 5%
Holidaybreak plc Interim Results 2011
Neil BrightGroup Finance Director
Holidaybreak plc Interim Results 2011 Slide 4
Group results
1 Before amortisation of other intangible assets acquired via business combinations of £0.7m (2010: £0.9m), separately disclosed items of £1.1m (2010: £nil) and, for loss per share, the tax effect thereof of £0.2m (2010: £0.2m)
2 Before IAS 39 mark-to-market revaluations of financial derivatives of £4.2m credit (2010: £1.4m charge) and, for loss per share, the tax effect thereof of £1.1m charge (2010: £0.5m credit)
Headline results
H1 2011 H1 2010
Revenue £139.6m £150.2m
Operating loss 1 £12.4m £11.0m
Loss before tax 1,2 £19.2m £17.7m
Loss per share 1,2 20.0p 19.1p
Interim dividend 3.35p 3.20p
Net debt £148.8m £129.2m
Holidaybreak plc Interim Results 2011 Slide 5
Divisional results
1 Education includes share of Meininger post tax profit of £0.3m (2010: £nil)
2 Before amortisation of other intangible assets acquired via business combinations of £0.7m (2010: £0.9m) and separately disclosed items of £1.1m (2010: £nil).
Education
£m
Adventure
£m
HotelBreaks
£m
Camping
£m
Group
£m
Revenue 2011 41.0 38.8 59.7 0.1 139.6
v2010 -3.0 -2.1 -5.4 -0.1 -10.6
Operating (loss) profit1,2 -2.3 -2.0 4.2 -12.3 -12.4
v2010 0.2 -1.4 -0.3 0.1 -1.4
Holidaybreak plc Interim Results 2011 Slide 6
Movement in net debtH1 2011
£mH1 2010
£m
EBITDA (excluding share of associates)
-10.3 -7.6
Share based payments charge 0.2 0.3
Working capital movement 11.9 23.3
Net capex -7.4 -4.8
Operating cash flow -5.6 11.2
Tax (paid) refunded -4.8 0.5
Interest -6.5 -5.1
Free cash flow -16.9 6.6
Currency and non-cash movements -1.4 2.3
Acquisitions and intangibles -30.8 -
(Increase) decrease in net debt -49.1 8.9
Holidaybreak plc Interim Results 2011 Slide 7
Net debt & facility utilisation
• Net debt at 31 March was £148.8m (2010: £129.2m)
• At 31 March we are approaching peak facility utilisation- minimum cash headroom of £40m in first half- net debt is now reducing as normal
• Capex increased in H1 due to the timing of spend- full year guidance of £17.1m
Holidaybreak plc Interim Results 2011 Slide 8
Balance sheet2011
£m2010
£m
Intangibles 165.0 166.7
Property, plant and equipment 202.6 200.3
Investment in associates* 31.5 -
Net current liabilities -126.0 -126.4
Cash and cash equivalents 51.1 51.2
Short term borrowings -15.3 -4.7
Long term borrowings -184.6 -175.7
Deferred tax -30.0 -31.4
Net assets 94.3 80.0
* Acquisition of a 50% stake in Meininger for £31.1m in December 2010
Holidaybreak plc Interim Results 2011 Slide 9
Interest & currency hedges• 16% of Bank debt is at floating interest rates
• Effective average interest rate c.8.2% due to hedging instruments
• 21% of Group EBITA in € zone
• Other net exposure- c. €51m- c. $21m
• 91% of Group’s € and 99% of Group’s $ requirements for 2011 bought at average rates of €1.17 and $1.58
Holidaybreak plc Interim Results 2011 Slide 10
Financial summary• Revenue -7.1%
- Distorted by timing of Easter and geopolitical events
• Headline operating loss -£1.4m vs last year- -£0.4m vs. last year, pre Middle East and North Africa impact
• Net debt increased by £19.6m to £148.8m- After £30.8m acquisition in Meininger- Minimum headroom £40m in first half- Sufficient financial headroom to continue to invest in Education
• Interim dividend increased 5% to 3.35p
Holidaybreak plc Interim Results 2011
Martin DaviesGroup Chief Executive
Holidaybreak plc Interim Results 2011 Slide 12
Operational summary• Core strategy is working; Education share of the Group
increasing
• European sales mix strengthening
• Strong trading visibility for FY11
• Sales mix across Group moving to higher margin products
• Meininger trading above plan on all KPIs
• Adventure disrupted by geopolitical events
• Hotel Breaks mitigating difficult trading environment with tight control of cost base
• Camping continues to experience later booking trends.
Holidaybreak plc Interim Results 2011 Slide 13
Education• Sales intake currently -1% reflecting a decline in
lower margin products; 96% booked overall, UK centres at 99%
• High visibility enables us to improve gross margin through maximising yields and profitability of owned centres
• PGL is benefiting from LEA consolidation
• NST trading well, encouraging signs for 2012
• Education is 39% booked for 2012;PGL centres at 63%
Holidaybreak plc Interim Results 2011 Slide 14
Meininger: creating a European leader
• 50% stake bought on 16 December for £30.8m− Option to acquire remaining 50% over next 2-3 years
• New Salzburg site (opened mid April) and Berlin (June 2011) increases bed capacity by 23% to 4,550
• 4 sites secured for 2011/12, increasing capacity by a further 1,600 beds
• Pipeline of attractive sites – Brussels & Amsterdam in 2012/13
Holidaybreak plc Interim Results 2011
Education Division: progress on strategy
Slide 15
• Roll out Meininger product to key school trip destinations outside Germany
• Focus on targeting large German education travel market currently underserved by German education specialists
Secondary school study tours at c.€270m (UK at c.£180m) Meininger leading provider of bespoke trip accommodation NST/EST working with Meininger to develop tour operator products to
German schools market
Primary school adventure centre market underexploited
Already started to deliver inbound PGL product via relationship with Meininger
Significant opportunities exist to offer PGL concept to German schoolsVision
No. 1 educational travel provider in Europe
Holidaybreak plc Interim Results 2011 Slide 16
Adventure
• Sales intake currently at -3% due to external events
• Trading was strong prior to MiddleEast and North Africa events
• Performance negativelyaffected by these events Estimate full year profit impact of
£1.5m including £1m in H1
• Capacity adjustments made to focus on most profitabletours and destinations
Holidaybreak plc Interim Results 2011 Slide 17
Hotel Breaks• Sales intake currently at -9%; -6% excluding lost airport
hotel contracts
• Strong focus on tight control of costs across the division
• Change in sales mix driving improvement in margin performance
• Superbreak’s retail travel agent sales lower than last year due to tough operating conditions across market
• Superbreak’s B2C channel showing strong growth from Superbreak.com
• Bookit adversely affected by the weak Dutch consumer market
Holidaybreak plc Interim Results 2011 Slide 18
Camping• Sales intake at -5%, versus -3% capacity
• Difficult trading conditions in the UK and the Netherlands; Germany performing well
• Trend towards later bookings continues
• Focus on maintaining high margins by maximising yields and occupancyacross the various sales markets
• Mobile-home life extension programme working well
Holidaybreak plc Interim Results 2011 Slide 19
Outlook• Strong visibility at Education
• Excited about Meininger growth opportunities
• Focus on cash management and cost control at traditional travel businesses
• Expect to perform in line with expectations for the full year
• Encouraging signs for 2012; Education 39% booked, PGL UK centres at 63%
Holidaybreak plc Interim Results 2011
Appendices
Holidaybreak plc Interim Results 2011 Slide 21
Trading update
Year on year sales intake (%)Year to date at
21 May 2011Year to date at
12 Feb 2011
% of revenue booked at 21
May 2011
EDUCATION & ADVENTURE
-2% Level
Education -1% Level 96%
PGL UK centres Level Level 99%
Adventure -3% -1%
HOTEL BREAKS -9% -9%
CAMPING -5% -4% 82%
GROUP -4% -3% 85%
MEININGER 16% 25%
Capacity changes: PGL UK centres at -1% and Camping at -3%
Meininger’s performance reflects the anniversary of the Frankfurt site which opened in April 2010
Holidaybreak plc Interim Results 2011
Capital expenditure
2011 capital
expenditure
HY1 HY2 Full
Year
Education 4.1 1.8 5.9
Adventure 0.3 0.8 1.1
Hotel Breaks 0.4 1.0 1.4
Camping 4.0 6.3 10.3
CAPEX 8.8 9.9 18.7
Camping disposals -1.4 -0.2 -1.6
NET CAPEX 7.4 9.7 17.1
Net Camping 2.6 6.1 8.7
Holidaybreak plc Interim Results 2011 Slide 23
Meininger Site Location No. of
bedsNo. of rooms
Opening date
1 Berlin Hallesches Ufer Germany
2 Berlin Tempelhofer Ufer Germany
3 Munich Germany
4 Cologne Germany
5 London UK
6 Vienna City Austria
7 Berlin Prenzlauer Berg Germany
8 Hambug Germany
9 Berlin central station Germany
10 Frankfurt Germany
Total capacity at H1 2011 3,707 1,022
11 Salzburg Austria May 2011
12 Berlin Oranienburgerstr. Germany H2 2011
Additional capacity at end 2011 843 219
13 Vienna Downtown Austria H1 2012
14 Vienna Schiffamt Austria H1 2012
15 Berlin Airport Germany H1 2012
16 Frankfurt Airport Germany H1 2012
Additional capacity at end 2012 1,644 559
17 Brussels Belgium H2 2013
18 Amsterdam Netherlands H2 2013
Total expected capacity at end 2013 7,000 2,200
Holidaybreak plc Interim Results 2011 Slide 24
Interest hedges
• Put in place 2007-2008
• 16% of bank debt is floating
• Effective average interest rate is 8.2% at revised margin and bank base rate at 24 May 2011
• IAS Valuation at 31 March was -£6.7m
Amount£m
Product FixedRate
CapRate
Kick-inRate
EndRate
€50.0m 5 yr collar 4.50% 3.00% 15/01/2012
€40.4m 5 yr collar 6.50% 6.17% 30/09/2012
€10.0m 5 yr swap 3.98% 21/10/2013
€40.0m 5 yr swap 4.355% 17/10/2013
Holidaybreak plc Interim Results 2011 Slide 25
DisclaimerThis 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
Interim Results presentation – May 2011
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