TIDMTVZ
RNS Number : 6444K
Travelzest plc
31 July 2013
Date: 31 July 2013
On behalf Travelzest plc ("Travelzest" or the "Group")
of:
For immediate release
Travelzest plc
Interim results
Travelzest plc (AIM:TVZ), the online travel group,announces its
unaudited interim results for the six months ended 30 April
2013.
Highlights
-- Total transaction value of GBP130.3 million (2012: GBP137.3 million)
-- Revenues of GBP13.2 million (2012: GBP15.0 million)
-- Operating profit from continuing operations of GBP0.3 million (2012: GBP3.1 million)
-- Underlying operating profit(1) from continuing operations was
GBP3.3 million (2012: GBP3.8 million)
-- The gross profit percentage increased to 82.4% (2012: 80.2%)
-- Continued investment in business development and marketing
-- Company continues to trade with the support of its primary lending bank
Commenting on the results, Christopher Howell, Non-Executive
Chairman said:
"Our Canadian brands are both robust businesses with strong and
loyal customer bases. In the period, marketing investment has been
a significant focus and the benefits of this are coming through.
Consumer confidence is beginning to stabilise in the travel market,
and our brands are well positioned to maximise this
opportunity."
- Ends -
Enquiries:
Travelzest plc
Christopher Howell - Non-Executive Via Redleaf Polhill
Chairman
Redleaf Polhill +44 (0)20 7382 4730
Rebecca Sanders-Hewett / Jenny Bahr travelzest@redleafpr.com
Sanlam Securities UK Limited
(Nominated Adviser and Broker) +44 (0)20 7628 2200
Simon Clements / Virginia Bull
Notes to Editors:
Travelzest plc (LSE:TVZ.L) is a dynamic travel group, with a
collection of online travel retailers. Included in the Travelzest
agency family are itravel2000 and The Cruise Professionals.
Travelzest is traded on London's AIM Exchange under the symbol
TVZ.
Chairman's statement
As previously announced, following the expiry of the Group's
debt facility on 30 June 2013, the Company continues to operate
with the support of its primary lender to 30 August 2013. This is
notwithstanding that the Company must continue to comply with its
other obligations under the facility arrangements and that the loan
is now capable of being demanded by the primary lender at any time.
Therefore, as previously stated, the Company remains reliant on the
support of its primary lending bank in order to continue to
trade.
The Directors are exploring all options to refinance its debt
including further investment from alternate sources. On this basis,
the Directors have formed the view that the business is a going
concern. These financial statements do not include the adjustments
that would result if the Group were unable to continue as a going
concern.
Improved pricing, higher advertising revenue and improved
volumes from the Cruise Professionals has partially offset H1
trading at itravel2000, which is down versus the prior year as a
result of weaker package vacation sales, primarily in the first
quarter.
In late 2012, the Group announced its intention to sell or wind
down all the remaining UK operations. This was recently completed
and as a result, we now present the UK operations as discontinued
operations in the Group income statement.
These interim financial statements have been prepared on a going
concern basis. The Directors are currently exploring all options
including further investment
Financial results
-- Total transaction value declined 5.1% and revenue declined
12.0% to GBP13.2 million (2012: GBP15.0 million) as a result of a
12.0% decline in package vacation volumes partially offset by
increased package vacation pricing and 2% growth in flight volumes
and higher advertising revenues
-- The gross profit percentage increased to 82.4% (2012: 80.2%)
as a result of higher advertising revenues and higher package
vacation pricing.
-- Administrative expenses, excluding the impact of a non-cash
goodwill impairment charge of GBP1.7 million, were in line with the
prior year.
-- The Company recorded a goodwill impairment charge related to
the itravel2000 operations of GBP1.7 million (2012: nil).
-- Separately disclosed items increased to GBP0.9 million (2012:
GBP0.3 million) as a result of an increase in provision for an
employment related claim together with costs associated with the
aborted formal sale process.
-- Underlying operating profit(1) from continuing operations
declined to GBP3.3 million (2012: GBP3.8 million) primarily due to
lower package vacation volumes partially offset by higher
advertising revenues, improved package vacation pricing and higher
flight volumes.
-- Operating profit from continuing operations declined to
GBP0.3 million (2012: GBP3.8 million) as a result of lower package
vacation volumes, higher separately disclosed items and the
goodwill impairment charge.
-- The gain from the Group's discontinued operations declined to
GBP0.3 million (2012: GBP0.4 million) as the Group completed the
exit of its UK operations in H1.
1. Underlying operating profit is adjusted for amortisation of
intangible assets, goodwill impairment and separately disclosed
items
Outlook
The short-term outlook is that consumer confidence will remain
relatively stable with purchase intentions expected to grow by 2%
in 2013 and 2.3% in 2014 (2.) The Group's brands are well
positioned to maximise this opportunity.
The Group will be expanding its luxury land based product
offering to address a growing need in the marketplace. In addition,
marketing investment continues to be a significant focus for the
Group, with particular regard to the late booking market for
itravel2000 and our luxury offering, The Cruise Professionals.
Summary
I would like to thank Nigel Jenkins for his service to the Board
as Chairman; I am grateful that Nigel has decided to remain on the
Board and continues to provide us with his significant experience.
I would also like to thank Mark Molyneux for his years of service
as a Director and as past Chairman. I would also like to express
both my gratitude and that of the board for Jonathan Carroll's
contributions as Chief Executive Officer since 2009. Finally, I
would also like to thank the employees for their hard work in
providing excellent customer service and continuing to push new
initiatives forward to build sustainable growth despite the
challenging market and other factors that the business has recently
faced.
Christopher Howell
Chairman
31 July 2013
2. Conference Board of Canada : Outbound June 2013
Consolidated income statement
six months ended 30 April 31 October
Notes 2013 2012 2012
(Re-presented)*
unaudited unaudited (audited)
GBP000s GBP000s GBP000s
Total transaction value 130,289 137,297 224,927
------------- ------------------ ------------
2
Revenue 13,230 15,033 24,120
Cost of sales (2,327) (2,982) (4,365)
------------- ------------------ ------------
Gross profit 10,903 12,051 19,755
Administrative expenses 3 (10,642) (8,958) (16,299)
------------- ------------------ ------------
Operating profit/(loss) 261 3,093 3,456
Analysed as:
Underlying operating profit 3 3,263 3,802 5,881
Separately disclosed items 3 (901) (312) (1,620)
Amortisation of intangible assets and goodwill impairment 3 (2,101) (397) (805)
Finance income - 270 450
Finance costs (1,578) (1,895) (3,609)
Profit / Loss on ordinary activities before taxation (1,317) 1,468 297
Income tax expense (715) (912) (602)
------------- ------------------ ------------
Profit / Loss for the period from continuing operations (2,032) 556 (305)
Discontinued Operations
Profit / Loss for the period from discontinued operations 295 427 (1,325)
Profit / Loss for the period attributable to owners of the
parent (1,737) 983 (1,630)
============= ================== ============
Basic loss / earnings per share
From continuing operations 5 (1.40)p (0.38)p (0.21)p
From discontinued operations 5 0.20p 0.26p (0.91)p
Diluted loss / earnings per share
From continuing operations 5 (1.40)p 0.33p 0.21p
From discontinued operations 5 0.18p 0.26p 0.91p
Condensed Consolidated statement of comprehensive income
Six months ended Year ended
30 April 31 Oct
2013 2012 2012
unaudited unaudited (audited)
GBP000s GBP000s GBP000s
Profit/ Loss for the period (1,737) 983 (1,630)
Foreign Exchange Movements (173) (22) 203
Movement in cash flow hedge - 109 144
---------- ---------- -----------
Other comprehensive income, net
of tax (173) 87 347
Total comprehensive income for
the period (1,910) 1,070 (1,283)
========== ---------- -----------
Condensed Consolidated balance sheet
As at 30-Apr As at 31-Oct
2013 2012 2012
Note GBP'000s GBP'000s GBP'000s
(Re-presented)*
(unaudited) (unaudited) (audited)
ASSETS
Non-current
assets
Goodwill 8 28,099 29,809 29,809
Intangible
assets 1,450 1,869 1,643
Deferred tax
asset 78 - 76
Property,
plant and
equipment 924 1,178 1,039
------------------------------ ----------------------------- ------------------------------------
30,551 32,856 32,567
Current
assets
Trade and
other
receivables 5,794 6,916 9,182
Derivative
financial
instruments 7 - - 173
Restricted
cash 837 823 1,160
Cash and cash
equivalents 2,067 3,667 1,107
Assets
classified
as held
for sale - 742 88
------------------------------ ----------------------------- ------------------------------------
8,698 12,148 11,710
------------------------------ ----------------------------- ------------------------------------
Total assets 39,249 45,004 44,277
============================== ============================= ====================================
EQUITY AND
LIABILITIES
Equity
attributable
to
equity
holders of
the parent
company
Share capital 2,903 2,903 2,903
Share premium
account 31,456 31,456 31,456
Merger
reserve 2,320 2,320 2,320
Translation
and hedge
reserve (1,744) (4,862) (1,571)
Retained
earnings (21,510) (14,267) (19,784)
------------------------------ ----------------------------- ------------------------------------
Total equity 13,425 17,550 15,324
Non-current
liabilities
Trade and
other
payables 974 2,003 1,889
Borrowings - 7,978 -
Obligations
under
finance
leases 211 261 307
Deferred tax 90 170 137
------------------------------ ----------------------------- ------------------------------------
1,275 10,412 2,333
Current
liabilities
Trade and
other
payables 7,980 6,865 9,239
Borrowings 14,994 7,650 16,110
Obligations
under
finance
leases 221 157 229
Derivative
financial
instruments 7 - 205 173
Current tax
liabilities 1,354 1,494 844
Liabilities
classified
as held for
sale - 671 25
------------------------------ ----------------------------- ------------------------------------
24,549 17,042 26,620
------------------------------ ----------------------------- ------------------------------------
Total
liabilities 25,824 27,454 28,953
------------------------------ ----------------------------- ------------------------------------
Total equity
and
liabilities 39,249 45,004 44,277
============================== ============================= ====================================
Condensed Consolidated cash flow statement
Year to Year ended
31 October 31 October
Note 2013 2012 2012
(Re-presented)*
unaudited unaudited (audited)
GBP000s GBP000s GBP000s
Cash flows from operating activities
Cash generated from operations 4,106 2,856 2,193
Interest paid (519) (971) (3,081)
Income taxes paid (206) (1,424) (1,796)
---------- ----------------- -------------
Net cash flow from operating activities 3,381 461 (2,684)
Cash flow from investing activities
Purchases of property, plant and equipment and intangible assets (174) (319) (733)
Proceeds from sale of assets - - 42
---------- ----------------- -------------
Net cash used in investing activities (174) (319) (691)
Cash flow used in financing activities
Overdraft facility - (2,650) 2,500
Repayment of borrowings (1,500) - -
Finance charge (775) (1,015) -
Increase / Decrease in restricted cash 323 173 (164)
Finance Lease payments - 130 395
---------- ----------------- -------------
Net cash used in financing activities (1,952) 1,938 2,731
Net decrease in cash and cash equivalents 1,255 2,080 (644)
========== ================= =============
Cash and cash equivalents
Cash and cash equivalents at beginning of year 1,107 1,617 1,617
Effect of foreign exchange rate changes (295) (30) 134
Net movement in cash and cash equivalents 1,255 2,080 (644)
---------- ----------------- -------------
Cash and cash equivalents at end of year 2,067 3,667 1,107
========== ================= =============
* Refer to note 9
Consolidated statement of changes in equity
Share capital Translation Share premium Merger reserve Retained Total equity
and hedge account earnings
reserve
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
(unaudited)
At 1 November
2011 2,903 (4,949) 31,456 2,320 (15,125) 16.605
---------------- -------------- ---------------- ---------------- --------------- ---------------- -------------
Comprehensive
income:
Loss for the
year - - - - 983 983
Other
comprehensive
income:
Movement in
cash flow
hedge - 109 - - - 109
Foreign
exchange
movements - (22) - - - (22
---------------- -------------- ---------------- ---------------- --------------- ---------------- -------------
Total
comprehensive
income - 87 - - 983 1,070
---------------- -------------- ---------------- ---------------- --------------- ---------------- -------------
Transactions
with owners:
Transactions - - - - - -
with owners:
Share - based
payments - - - - (125) (125)
---------------- -------------- ---------------- ---------------- --------------- ---------------- -------------
At 30 April
2012 2,903 (4,862) 31,456 2,320 (14,267) 17,550
================ ============== ================ ================ =============== ================ =============
At 1 November
2012 2,903 (1,571) 31,456 2,320 (19,784) 15.324
---------------- -------------- ---------------- ---------------- --------------- ---------------- -------------
Comprehensive
income:
Loss for the
year - - - - (1,737) (1,737)
Other
comprehensive
income:
Movement in - - - - - -
cash flow hedge
Foreign
exchange
movements - (173) - - - (173)
---------------- -------------- ---------------- ---------------- --------------- ---------------- -------------
Total
comprehensive
income - (173) - - (1,737) (1,910)
---------------- -------------- ---------------- ---------------- --------------- ---------------- -------------
Transactions
with owners:
Share-based
payments - - - - 11 11
---------------- -------------- ---------------- ---------------- --------------- ---------------- -------------
At 31 April
2013 2,903 (1,744) 31,456 2,320 (21,510) 13,425
---------------- -------------- ---------------- ---------------- --------------- ---------------- -------------
Notes to the condensed interim financial statements
1 Principal accounting policies
The figures and financial information for the six-month period
ended 30 April 2013 and 30 April 2012 are unaudited and do not
constitute the statutory financial statements for the period. The
figures and financial information for the year ended 31 October
2012 do constitute the statutory financial statements for that
year. Those financial statements included the auditors' report
which was unqualified and drew attention to an emphasis of matter
but did not contain a statement under either section 498(2) or
498(3) of the Companies Act 2006.
These condensed interim financial statements of Travelzest plc
have been prepared in accordance with the accounting policies set
out below and accounting policies adopted for use in the Travelzest
plc 2012 Financial Statements except as modified by the amendment
of the standards set out below.
The Company's debt facility expired on 30 June 2013 and
continues to operate with the support of its primary lender to 30
August 2013. This is notwithstanding that the Company must continue
to comply with its other obligations under the facility
arrangements and that the loan is now capable of being demanded by
the primary lender at any time. The Directors are exploring all
options to refinance its debt including further investment from
alternate sources. On this basis, the Directors have formed the
view that the business is a going concern. These condensed interim
financial statements do not include the adjustments that would
result if the Group were unable to continue as a going concern.
A number of amended standards and interpretations are effective
for the current financial year, but none of them has had any
material impact on the condensed interim financial information.
2 Segment reporting
The executive management considers the business from an
operating division perspective. The executive management considers
the business segments to be the Groups Canadian and UK operations.
In addition, certain central costs are monitored separately. In the
previous year the Group considered its segments to be its merchant
and agency operations and as such the comparative information in
the segmental information below has been re-presented to reflect
the new segmentation. The entire UK operations have been classified
as discontinued operations in the current year and comparatives
restated.
The segment information provided to the executive management is
as follows:
Total Transaction value
Canada
Six months ended 30 April Year ended Oct 31
2013 2012 2012
GBP000s GBP000s GBP000s
Total transaction Value 130,289 137,297 224,927
Segment reporting (continued)
Business segments Canada Total
Year Year
ended ended
Six months Oct Six months ended Oct
ended 30 April 31 30 April 31
2013 2012 2012 2013 2012 2012
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
Revenue 13,230 15,033 24,120 13,230 15,033 24,120
-------- -------- -------- --------- -------- --------
Profit from operations
before depreciation 4,008 4,384 7,094 4,008 4,384 7,094
Depreciation (156) (131) (317) (156) (133) (320)
Amortization of intangible
assets (391) (396) (804) (391) (397) (805)
-------- -------- -------- --------- -------- --------
Profit (loss) for group 3,461 3,857 5,973 3,461 3,854 5,969
Separately disclosed
items (271) (191) (1,075) (271) (191) (1,075)
Loss on Goodwill impairment (1,710) - - (1,710) - -
1,480 3,666 4,898 1,480 3,663 4,894
======== ======== ======== ========= ======== ========
Separately disclosed
items unallocated (630) (121) (545)
Central costs (589) (449) (893)
--------- -------- --------
Profit (loss) before
finance items 261 3,093 3,456
Finance income - 270 450
Finance cost (1,578) (1,895) (3,609)
--------- -------- --------
Loss before tax (1,317) 1,468 297
Tax (715) (912) (602)
Tax Profit/loss for
year (2,032) 556 (305)
========= ======== ========
*See note 9
** Included within central costs is GBP0 of depreciation GBP0 of
amortisation and GBP1,000 of gains on disposal of intangible assets
(2012: GBP3,000, GBP1,000 and GBP2,000 respectively).
3 Operating profit / (loss)
Operating profit / (loss) stated after charging /
(crediting):
Continuing operations
Six months to 30 April Year ended 31 Oct
2013 2012 2012
GBP000s GBP000s GBP000s
(unaudited) (unaudited) (audited)
Commissions Paid 1,818 1,952 3,193
Merchant Cost
Other cost of sales 509 1,030 1,172
------------ ------------ ------------------
Cost of Sales 2,327 2,982 4,365
============ ============ ==================
Salaries and benefits 3,431 3,157 6,364
Marketing and Advertising 2,077 2,022 3,487
Other expenses 1,432 2,284 2,535
Seperately disclosed items 901 312 1,620
Net loss on foreign currency translation 33 69 46
Depreciation of owned property, plant and equipment 61 66 129
Depreciation of financed property, plant and equipment 95 67 191
Amortisation of owned intangible assets 369 375 761
Amortisation of financed intangible assets 22 22 44
Goodwill impairment 1,710
Auditors remuneration
Audit of the financial statements 45 67 145
Other services relating to audit of group subsidiaries 21 33 71
Other services relating to taxation 12 18 39
Other services provided pursuant to legislation 12 16 35
Operating lease costs
Office equipment 104 136 205
Property 317 314 627
Administrative expenses 10,642 8,958 16,299
============ ============ ==================
Separately disclosed items
Share-based payments 11 (142) (68)
Move and other IT transition costs 1
Corporate restructuring costs
Legal 7 83 103
Other 292 16 421
Operational companies restructuring costs
Severance 201 275 302
Additional contract costs and write down of receivable 17
Legal 389 60 97
Non-recruiting UK call centre charges 764
Loss on disposal of property, plant and equipment and intangible
assets 1 2 1
901 312 1,620
============ ============ ==================
4 Income tax expense
The income tax expense of GBP715,000 relates primarily to
overseas taxation of GBP662,000 (2012: GBP901,000), this represents
the application of the effective tax rate for the full year.
5 Earnings / (loss) per share
The calculations for earnings / (loss) per share, based on the
weighted average number of shares, are shown in the table
below.
Six months to 30 April Year ended 31 Oct
2013 2012 2012
GBP000s GBP000s GBP000s
(unaudited) (unaudited) (audited)
Earnings / loss from continuing operations (2,032) 556 (305)
Earnings / loss from discontinued operations 295 427 (1.325)
------------ ------------ ------------------
Earnings / loss for the purposes of basic and dilutes earnings / loss
per share being net
profit attributable to equity holders of the parent (1,737) 983 (1,630)
============ ============ ==================
Millions Millions Millions
Weighted average number of shares for basic earnings / loss per share 145.1 145.1 145.1
------------ ------------ ------------------
Weighted average number of shares for fully diluted earnings / loss
per share 163.0 166.0 169.8
------------ ------------ ------------------
Basic loss / earnings per share
From continuing operations (1.40) p 0.38 p (0.21) p
From discontinued operations 0.20 p 0.29 p (0.91) p
Diluted loss / earnings per share
From continuing operations (1.40) p 0.33 p (0.21) p
From discontinued operations 0.18 p 0.26 p (0.91) p
The Group made a loss during the period from continuing
operations, the impact of potential ordinary shares is
anti-dilutive and therefore the diluted loss per share is the same
as the basic loss per share at GBP1.40 (2012: basic profit per
share 0.38p and fully diluted profit per share 0.33p). The basic
profit per share from discontinued operations is 0.20p while the
fully diluted earnings per share is 0.18p (2012 basic profit per
share 0.29p and fully diluted profit per share 0.26p).
6 Notes to the condensed cash flow statement
Six months ended Year ended
30 April 31 October
2013 2012 2012
GBP'000s GBP'000s GBP'000s
(Re-presented)*
(unaudited) (unaudited) (audited)
Operating profit 558 3,511 2,111
Adjustments for:
Amortisation 391 441 894
Depreciation 156 161 373
Derivative - (68) -
Change in inventories - - -
Change in operating receivables 3,569 (103) (1,662)
Change in operating payables (2,291) (946) 462
Loss on disposal of property,
plant and equipment and
intangible
assets 2 2 83
Goodwill impairment 1,710 - -
Share-based payments 11 (142) (68)
----------------------- ---------------- ----------------------------------------
Net cash flow from operating
activities 4,106 2,856 2,193
----------------------- ---------------- ----------------------------------------
*See note 9
7 Derivative financial instruments
Derivative financial instruments, serving primarily to hedge
future operative business, are detailed in the accounting policies
on financial instruments.
Six months ended 30 April Year ended 31 October
Analysed as:
2013 2012 2012
GBP'000s GBP'000s GBP'000s
(unaudited) (unaudited) (audited)
Assets arising from derivative financial instruments - - 173
Liabilities arising from derivative financial instruments 0 205 173
------------- ------------- ----------------------
Derivative financial instruments, all with a remaining term of
less than year, primarily serve to hedge future operative business.
The fair value of the financial derivative assets and liabilities
has been determined by relevant active market valuations obtained
from the Group bankers. All financial instruments have been
designated as hedging instruments in accordance with IAS 39.
8 Goodwill
Six months to 30 April Year ended
31-Oct
2013 2012 2012
GBP000s GBP000s GBP000s
(unaudited) (unaudited) (audited)
Cost 43,229 43,229 43,229
Initial impairment loss (13,420) (13,420) (13,420)
Additional impairment (1,710) - -
------------ ------------ -----------
Accumulated impairment loss (15,130) (13,420) (13,420)
------------ ------------ -----------
Carrying amount 28,099 29,809 29,809
============ ============ ===========
Annually or more frequently if events or a change in the
economic environment indicate a risk of impairment, the Group
assesses the recoverable amount of goodwill allocated to the
businesses listed below (determined by reference to the value in
use of the continuing operations of the related businesses) as
required by IAS 36 Impairment of assets. IAS 36 requires that
impairment tests be carried at the level where independent cash
flows arose at which the Group's management measures returns on
operations.
Goodwill is allocated to the following CGUs:
Six months to 30 April Year ended
31-Oct
2013 2012 2012
GBP000s GBP000s GBP000s
(unaudited) (unaudited) (audited)
4358376 Canada Inc. (trading as itravel2000) 22,124 23,834 23,834
The Cruise Professionals Limited 5,975 5,975 5,975
------------ ------------ -----------
28,099 29,809 29,809
============ ============ ===========
For the half year ended 30 April 2013, management has undertaken
a detailed review of the carrying value of the above balances both
at a consolidated and company level and have determined that an
impairment charge is required for 4358376 Canada Inc. in the amount
of GBP1,710,000 (2012 GBPnil) while no impairment charge is
required for The Cruise Professionals Limited.
In making estimates of future profit and cash flows, the growth
rate assumptions that have been applied to each businesses' current
year profits are deemed to be appropriate by management.
Growth rate estimates by their nature will include assumptions
which have been considered in detail by management and are
consistent with those in use in the Travelzest plc 2012 Financial
Statements.
9 Re-presentation of the 30 April 2012 consolidated income
statement, consolidated balance sheet and consolidated cash flow
statement
The entire UK operations have been classified as discontinued
operations in the current year and April 30 2012 comparatives
re-presented.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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