TIDMTT.
RNS Number : 8246C
TUI Travel PLC
08 May 2012
8 May 2012
TUI Travel PLC
("TUI Travel")
Interim results for the six months ended 31 March 2012
Key Financials
Underlying results(1) Statutory results(2)
GBPm H1 12 H1 11 Change H1 12 H1 11
Revenue 5,447 5,207 +5% 5,447 5,207
Operating loss (317) (307) -3% (407) (303)
Loss before tax (367) (364) Flat (457)(3) (366)
----------------- ------- ------- -------- --------------- ------
1 Underlying operating loss excludes separately disclosed items,
amortisation of business combination intangibles, acquisition
related expenses, predecessor accounting for Magic Life in H1 11
and interest and taxation of results of the Group's joint ventures
and associates
2 Prior year figures have been restated to incorporate the
results of Magic Life under predecessor accounting
3 The movement in year on year statutory loss before tax is
explained by the table on page 6
Highlights
-- First half underlying operating loss of GBP(317)m (H1 11: GBP(307)m)
with a GBP13m improvement in the second quarter
-- Strong performance delivered by the UK:
- GBP48m improvement in first half underlying operating loss
- Result driven by increased sales of differentiated & exclusive
content
- 47% of winter holidays booked online
-- Summer 2012 trading overall remains in line with expectations with
continued outperformance of the market in the UK
-- Continued strong Summer 2012 demand for differentiated product:
- UK 64% of bookings - up seven percentage points on prior year
- Nordics 76% of bookings - up five percentage points on prior year
-- UK Summer 2012 controlled distribution at 90%, up six percentage
points on prior year with online sales continuing to account for
half of this
-- Improved Summer 2012 trading performance in all other mainstream
markets except France which remains difficult
-- In A&D, Summer 2012 bookings are up 17% and sales (TTV) up 28% versus
the prior year
-- The business improvement programme is progressing to plan
-- The net debt position at 31 March 2012 was GBP1,184m (31 March 2011:
GBP1,182m)
-- The Board proposes an interim dividend of 3.4p per share, an increase
of 3%
Peter Long, Chief Executive of TUI Travel PLC, commented
"We are pleased with our overall performance for the first half.
The UK delivered a strong Winter performance which attests to our
focus on differentiated and exclusive product and being online
driven - key elements of our modern mainstream strategy. Our
outperformance in this market is continuing into the Summer season
and we will ensure that we continue to optimise our position.
"In our online accommodation only businesses we continue to
deliver healthy growth driven by new markets as well as increasing
market share in more recently established markets.
"Given the challenging economic environment, we remain cautious,
however, overall trading performance continues to be in line with
the Board's expectations."
A presentation for analysts and investors will be held today at
9.30am (BST) at Deutsche Bank, 1 Great Winchester Street, London
EC2N 2DB. For details of the webcast please visit
www.tuitravelplc.com.
Enquiries:
Analysts and Investors
Will Waggott, Chief Financial Officer Tel: +44 (0)1582 645
334
Andy Long, Head of Strategy & Investor Relations Tel: +44 (0)1293 645
795
Press
Lesley Allan, Corporate Communications Director Tel: +44 (0)1293 645
774
Mike Ward, External Communications Manager Tel: +44 (0)1293 645
776
Michael Sandler / Katie Matthews (Hudson Sandler) Tel: +44 (0)20 7796 4133
CURRENT TRADING & OUTLOOK
Current Trading
Winter 2011/12
Since our last announcement, the Winter programmes in all of our
source markets have closed out in line with our expectations with
load factors ahead of the prior year.
Current Trading (1) Winter 2011/12
YoY variation% Total ASP(2) Total Total RiskCapacity(3)
Sales(2) Customers(2)
MAINSTREAM
UK +4 -4 -7 -9
Nordic region Flat +6 +6 +6
Northern Region +3 Flat -3
Germany +4 +2 -2 -14
Austria -1 -2 -1
Switzerland -13 -14 -1
Poland +8 +44 +33
Central Europe +3 +2 -1
France - tour operators +1 -7 -7
Belgium -3 +5 +8
Netherlands +6 +26 +19
Western Europe +1 +6 +5
SPECIALIST & ACTIVITY N/A +9 N/A
A&D(4) +4 +20 +16
(1) These statistics are up to 29 April 2012 and are shown on a
constant currency basis (2) These statistics relate to all
customers whether risk or non-risk (3) These statistics include all
risk capacity programmes
(4) These statistics refer to online accommodation businesses
only; sales refer to total transaction value (TTV) and customers
refers to roomnights
In the UK, we delivered load factors and margins ahead of the
same period last year. The lates market contributed to strong UK
trading during the second quarter as a result of robust margins. We
were pleased with our price performance this Winter, with average
selling prices up 4% reflecting inflationary cost increases and
increased differentiated product sales.
Our differentiated offering continued to be popular with
customers and accounted for 62% of bookings this Winter, up twelve
percentage points versus the prior year. We continued to increase
the proportion of holidays sold online with 47% booked online, up
eight percentage points on last Winter.
Summer 2012
Since our last announcement we are pleased with our trading
performance in all our key markets with the exception of
France.
YoY customer booking variation % Cumulative Net bookings since previous Cumulative
bookings at 25 March statement bookings at 29 April
UK -6 Flat -6
Nordic region -2 +25 +3
Germany Flat +17 +3
France - tour operators -17 -14 -16
Belgium -2 +19 +2
Netherlands -4 +25 +1
---------------------------------- ---------------------- ---------------------------------- ----------------------
Current Trading (1) Summer 2012
YoY variation% Total ASP(2) Total Total Risk Only
Sales(2) Customers(2)
Capacity(3) Left to sell(3)
MAINSTREAM
UK +9 +3 -6 -6 -7
Nordic region +1 +3 +3 Flat -4
Northern Region +7 +3 -4
Germany +1 +4 +3 -8 -14
Austria +1 -2 -2
Switzerland -7 +2 +9
Poland -2 +27 +30
Central Europe +1 +4 +3
France tour operators +5 -11 -16
Belgium -6 -4 +2
Netherlands +3 +5 +1
Western Europe Flat -3 -3
SPECIALIST & ACTIVITY N/A +5 N/A
A&D(4) +11 +28 +17
(1) These statistics are up to 29 April 2012 and are shown on a
constant currency basis (2) These statistics relate to all
customers whether risk or non-risk (3) These statistics include all
risk capacity programmes
(4) These statistics refer to online accommodation businesses
only; Sales refer to total transaction value (TTV) and customers
refers to roomnights
In the UK, where we have sold 55% of the programme, trading
continues to outperform the market. Our differentiated product
portfolio continues to trade well, accounting for 64% of bookings
to date, up seven percentage points on the prior year. Demand for
our Sensatori and Holiday Village products, in particular, is
strong with customers up 11% on the prior year. Average selling
price is up by 9% reflecting cost base inflation of 5% and the
continued increase in differentiated/all-inclusive product
sales.
We have continued to increase the proportion of holidays sold
online with 41% booked online for Summer 2012, up five percentage
points versus the prior year. As a result 90% of holidays booked so
far this Summer have been through controlled channels, up six
percentage points on the prior year.
In the Nordic region trading has been encouraging since our last
update, with the cumulative position now ahead of our flat year on
year capacity. To date we have sold 64% of the programme and
differentiated content continues to increase within the sales mix
with these products accounting for 76% of bookings to date, up five
percentage points on the prior year.
In Germany, where the programme is 60% sold, trading has been
encouraging since our last update and we continue to see improved
demand for Greece, stimulated by competitive pricing.
In France we continue to encounter a later bookings curve in
challenging trading conditions. The prevailing economic conditions
have reduced demand for the early part of the Summer season. Whilst
the market is subdued we are beginning to see some return in demand
for Tunisia and Morocco, particularly in the later part of the
season. Trading for Egypt remains challenging. To date we have sold
51% of the programme.
In Belgium and the Netherlands where the programmes are now 55%
and 62% sold, trading has improved since our last announcement,
although we continue to encounter a later bookings curve.
In A&D, the strong trends experienced in the Winter season
have continued for Summer 2012. Bookings are up 17% and sales (TTV)
are up 28% versus the prior year. This was driven by both
Accommodation Wholesaler (previously referred to as B2B) where
bookings were up 18% and Accommodation OTA (previously referred to
as B2C) where bookings increased by 11%.
Sales in Specialist & Activity are up 5% on the prior year.
Trading in the Sport division has been strong due to events such as
the Olympics and the 2012 UEFA European Championships. We have also
seen improved demand in the North American Specialist Division.
Trading within the Education and Adventure divisions remain
difficult, reflecting overall market demand, the North African
situation and the poor demand for gap year travel.
Fuel/Foreign Exchange
We are largely hedged for the current financial year, which
gives us certainty of costs when planning capacity and pricing. The
following table shows the percentage of our forecast requirement
that is currently hedged for Euros, US Dollars and jet fuel. As
previously indicated, Jet fuel costs account for approximately 10%
of our cost base and at current market rates we estimate our fuel
costs would increase by circa 10% for 2013.
Summer 2012 Winter 2012/13
Euro 96% 83%
US Dollars 95% 78%
Jet Fuel 88% 68%
As at 26 April 2012
--------------------- ------------ ---------------
Foreign exchange translation improved the underlying operating
result by GBP6m in the first half, primarily due to the recovery of
Sterling against the Euro. If exchange rates remain at current
levels we anticipate that the impact on the full year will be
negative.
Outlook
Overall trading in the second half is in line with our
expectations with Summer volumes in all key markets, with the
exception of France, continuing to improve.
Demand for differentiated and exclusive product continues to
increase, particularly in the UK and Nordics where we are also
benefiting from the strength of our controlled distribution and
more customers booking online with us. Our recently announced
reorganisation of the Mainstream Sector, which sees us disbanding
our regional structure, will allow us to accelerate our move to a
modern mainstream business across the Sector sharing best practice
and leveraging the scale of the Group to benefit our customers and
shareholders alike.
Our business improvement programme is progressing to plan and
given the competitive market in which we operate delivering this
programme is important for the Group.
Given the challenging economic environment, we remain cautious,
however, overall, trading performance continues to be in line with
the Board's expectations.
BUSINESS AND FINANCIAL REVIEW
Group Performance
Group revenue increased by 5% to GBP5,447m (H1 11: GBP5,207m),
driven by organic growth of 4% and foreign currency translation and
acquisitions of 1%. Organic revenue growth was driven by higher
volumes and average selling prices in many source markets.
The Group reported an underlying operating loss of GBP(317)m (H1
11: loss of GBP307m). This was due to lower than expected demand
for North African destinations and Thailand where bookings in the
Nordics were adversely impacted by the flooding in and around
Bangkok. This was partially offset by a strong UK trading
performance, the non-repeat of repatriation costs from the
disruption in Tunisia and Egypt last year and the earlier timing of
Easter.
The main drivers of the year on year change in underlying
operating loss are summarised as:
GBPm
H1 11 underlying operating loss (307)
Magic Life winter losses (21)
------
H1 11 underlying operating loss (incl Magic Life winter losses) (328)
Trading +31
Easter +13
French tour operators (6)
Corsair (16)
Flooding in Thailand - Nordics (13)
Investment in accommodation OTAs (4)
North Africa (excluding France) (4)
UK pension cost savings +4
FX translation +6
------
H1 12 underlying operating loss (317)
----------------------------------------------------------------- ------
A reconciliation of underlying loss before tax to loss before
tax is as follows:
Six months ended 31 March 31 March
2012 2011
GBPm GBPm
Underlying loss before tax (367) (364)
Separately disclosed items - pension credit - 63
Separately disclosed items - other operating expenses (52) (5)
Separately disclosed items - financial expenses - (6)
Acquisition related expenses (35) (32)
Predecessor accounting for Magic Life - (21)
Taxation on profits and interest of joint ventures and associates (3) (1)
Loss before tax (457) (366)
------------------------------------------------------------------- --------- ---------
The first half statutory loss before tax of GBP(457)m is GBP91m
greater than the GBP(366)m loss recorded for H1 11. This movement
is largely explained by a pension credit in the prior year of
GBP63m within SDI operating expenses versus a GBP52m SDI operating
expense in the current period which relates to our business
improvement programme.
Separately disclosed items and acquisition related expenses are
further detailed in Notes 5 and 6 respectively.
Segmental Performance
Segmental performance is based on underlying financial
information (which excludes certain items, including separately
disclosed items and acquisition related expenses).
The Accommodation & Destinations Sector divisions will now
be described as follows:
- Accommodation Wholesaler (previously referred to as B2B)
- Accommodation OTA - online travel agent (previously referred to as B2C)
- Cruise Handling (previously referred to as Intercruises) and
- Incoming Services - businesses that provide transfers,
excursions, tours, tailor-made products and meetings and events
(previously referred to as Destination Services).
Mainstream Sector
The Mainstream sector reported an underlying operating loss of
GBP280m (H1 11: GBP295m).
Mainstream H1 12 H1 11 Change %
Customers ('000)(1)
Northern Region 2,080 2,151 -3%
Central Europe 2,407 2,366 +2%
Western Europe 2,228 2,140 +4%
------ ------ ---------
Total 6,715 6,657 +1%
====== ====== =========
Revenue (GBPm)
Northern Region 1,594 1,587 Flat
Central Europe 1,725 1,652 +4%
Western Europe 1,126 1,093 +3%
------ ------ ---------
Total 4,445 4,332 +3%
====== ====== =========
Underlying operating loss (GBPm)
Northern Region (109) (137) +20%
Central Europe (79) (82) +4%
Western Europe (92) (76) -21%
------ ------ ---------
Total (280) (295) +5%
====== ====== =========
1) Customer figures have been restated for H1 2011 to reflect
redefined product reporting following the implementation of a new
system
Northern Region
The Northern Region reported an underlying operating loss of
GBP109m (H1 11: loss of GBP137m). Excluding the impact of the Magic
Life winter losses, the underlying result moved forward by GBP49m
driven by UK trading, the non-repeat costs of North Africa
repatriation and an earlier Easter. This was partially offset by a
weaker performance in Nordics impacted by the flooding in
Bangkok.
The main drivers of the year on year change in underlying
operating loss are summarised in the following table:
GBPm UK Nordic Canada Hotels Northern
Region Region
H1 11 (173) 33 19 (16) (137)
Magic Life winter losses - - - (21) (21)
------ -------- ------- ------- ---------
H1 11 (incl Magic Life
winter losses) (173) 33 19 (37) (158)
UK pension cost savings +4 - - - +4
North Africa +3 +1 - - +4
Easter +7 +1 - - +8
Flooding in Thailand
- Nordics - (13) - - (13)
Trading +34 - +1 +8 +43
FX translation - - - +3 +3
H1 12 (125) 22 20 (26) (109)
====== ======== ======= ======= =========
Northern Region H1 12 H1 11 Change %
Customers ('000)
UK & Ireland 1,460 1,566 -7%
Nordic Region 620 585 +6%
------ ------ ---------
Total 2,080 2,151 -3%
------ ------ ---------
Revenue (GBPm)
UK & Ireland 1,049 1,065 -2%
Nordic Region 535 510 +5%
Canada - - -
Hotels 10 12 -17%
------ ------ ---------
Total 1,594 1,587 0%
====== ====== =========
Underlying operating profit /
(loss) (GBPm)
UK & Ireland (125) (173) +28%
Nordic Region 22 33 -33%
Canada 20 19 Flat
Hotels (26) (16) -63%
------ ------ ---------
Total (109) (137) +20%
====== ====== =========
UK & Ireland
The UK & Ireland businesses delivered a GBP48m improvement
in underlying operating loss to GBP125m (H1 11: loss of GBP173m).
This improved position was driven by strong load factors and late
Winter trading as well as a five percentage point increase in
controlled distribution versus the prior year to 84% and a six
percentage point increase in online distribution to 43% during the
period. The trading result also benefited in the second quarter by
an earlier Easter, weaker North Africa comparatives given the
non-repeat of repatriation costs that were incurred during the same
period last year and strong cost control. The business continues to
benefit from increased differentiated product sales, in H1 12
differentiated product accounted for 62% of the product mix, up 12
percentage points versus last year.
Nordic Region
The Nordic Region achieved an underlying operating profit of
GBP22m (H1 11: profit of GBP33m). The decline in profitability was
a result of flooding in Bangkok which adversely affected consumer
demand to Thailand and reduced yields. This was partially mitigated
by an earlier Easter and weaker North Africa comparatives. The
business continues to benefit from increased differentiated product
sales and higher levels of controlled distribution. In H1 12, 85%
of our products were sold via controlled distribution, up two
percentage points versus last year. This was driven by online
distribution of 62%, up five percentage points versus the prior
year. Differentiated products accounted for 56% of the overall
product mix, up 13 percentage points versus last year.
Canada
Canada delivered an underlying profit of GBP20m (H1 11: profit
of GBP19m). The strategic venture with Sunwing in Canada continues
to perform well, with an improved result year on year. This
improvement was driven by a strong trading performance, as a result
of improved margins and volumes during the period.
Hotels
The Hotel division comprises hotels, hotel management companies
and joint ventures in hotel assets. Underlying operating loss of
GBP26m (H1 11: loss of GBP16m) was impacted by the inclusion of
winter losses for the Magic Life companies acquired in July 2011
that were not incurred in the prior year. The underlying
like-for-like trading position (including Magic Life winter losses
in both years) moved forward by GBP8m (excluding FX) as a result of
improved demand for differentiated product as the Hotel division
principally provides differentiated product to the tour operators
and winter closure of unprofitable hotels.
Central Europe
Central Europe reported a GBP3m improvement in underlying
operating loss to GBP79m (H1 11: loss of GBP82m). The main drivers
of the year on year change in underlying operating loss are
summarised in the following table:
GBPm Germany Austria Switzer'd Poland Central
Europe
H1 11 (67) (9) (3) (3) (82)
North Africa +1 - - - +1
Easter +4 - - - +4
Trading - +1 (2) (3) (4)
FX translation +1 - - +1 +2
-------- -------- ---------- ------- --------
H1 12 (61) (8) (5) (5) (79)
======== ======== ========== ======= ========
Central Europe H1 12 H1 11 Change %
Customers ('000)
Germany 2,219 2,190 +1%
Austria 80 81 -1%
Switzerland 61 57 +7%
Poland 48 37 +30%
------ ------ ---------
Total 2,408 2,365 +2%
====== ====== =========
Revenue (GBPm)
Germany 1,561 1,493 +5%
Austria 69 67 +3%
Switzerland 72 74 -3%
Poland 23 18 +28%
------ ------ ---------
Total 1,725 1,652 +4%
====== ====== =========
Underlying operating loss (GBPm)
Germany (61) (67) +9%
Austria (8) (9) +11%
Switzerland (5) (3) -67%
Poland (5) (3) -67%
------ ------ ---------
Total (79) (82) +4%
====== ====== =========
1) Customer figures have been restated for H1 2011 to reflect
redefined product reporting following the implementation of a new
system
Germany
Germany reported an improved underlying operating loss of GBP61m
(H1 11: loss of GBP67m). This performance was driven by the
non-repeat of North Africa repatriation, an earlier Easter and
higher load factors. These factors were offset by continuing weak
demand to North Africa.
Other Central European businesses
The other Central European businesses of Austria, Switzerland
and Poland performed largely in line with the prior year.
Western Europe
Western Europe reported an underlying operating loss of GBP92m
(H1 11: loss of GBP76m). The main drivers of the year on year
change in underlying operating loss are summarised in the following
table:
GBPm France Neth. Belgium Southern Jet4You Western
Europe Europe
H1 11 (39) (10) (13) (4) (10) (76)
France tour
ops (6) - - - - (6)
North Africa
(excl France) - - +1 - - +1
Corsair (16) - - - - (16)
Trading - (1) +3 +1 +1 +4
FX translation - - - - +1 +1
--------- --------
H1 12 (61) (11) (9) (3) (8) (92)
======= ====== ======== ========= ======== ========
Western Europe H1 12 H1 11 Change %
Customers ('000)
France 765 752 +2%
Netherlands 505 433 +17%
Belgium 710 646 +10%
Southern Europe 34 51 -33%
Jet4You 214 258 -17%
------ ------ ---------
Total 2,228 2,140 +4%
====== ====== =========
Revenue (GBPm)
France 517 530 -2%
Netherlands 304 244 +25%
Belgium 258 243 +6%
Southern Europe 26 40 -35%
Jet4You 21 36 -42%
------ ------ ---------
Total 1,126 1,093 +3%
====== ====== =========
Underlying operating loss (GBPm)
France (61) (39) -56%
Netherlands (11) (10) -10%
Belgium (9) (13) +31%
Southern Europe (3) (4) +25%
Jet4You (8) (10) +20%
(92) (76) -21%
France H1 12 H1 11 Change %
Underlying operating loss (GBPm)
Tour Operator (42) (36) -17%
Airline (19) (3) -533%
------ ------ ---------
(61) (39) -56%
France
France reported an underlying operating loss of GBP61m (H1 11:
loss of GBP39m). The increase in loss was driven by a weaker
performance from both the French tour operators and the airline
Corsair.
The French tour operators continued to experience challenging
trading conditions due to the slow recovery of North African
destinations such as Tunisia, Egypt and Morocco and the weak
economic environment. As previously stated, we recently initiated a
project to consolidate the businesses of the French tour operators
with the aim of creating a single business with a long term viable
future. The legal merger was completed in January 2012 and the
integration timetable for this restructuring is progressing to
plan.
The Airline result, whilst lower than last year, reflects the
continuing competitive market place, however, the restructuring
programme is progressing as planned.
Netherlands
Netherlands reported an underlying operating loss of GBP11m, a
decline of GBP1m against the prior year (H1 11: loss of GBP10m),
reflecting a more challenging market.
Belgium
Belgium reported an underlying operating loss of GBP9m (H1 11:
loss of GBP13m), benefiting from a record Winter that saw volumes
increase by 10% and better airline utilisation. Seat-only sales
continued to grow, lifted by the recent introduction of new long
haul destinations. Controlled distribution increased by four
percentage points during the period to 61%, whilst sales through
the online channel rose by five percentage points.
Southern Europe
Southern Europe which consists of tour operators based in the
Italian and Spanish source markets, reported an underlying
operating loss of GBP3m (H1 11: loss of GBP4m). This improved
result reflects the heavy reliance on North Africa, much of which
was disrupted during the same period last year.
Jet4You
Our Moroccan low cost airline Jet4You reported an underlying
operating loss of GBP8m (H1 11: loss of GBP10m). The improved
trading result was driven by a remodelled flight programme that now
includes more tourist routes. Our business improvement programme
continues and we are confident of bringing the business back to a
break even result. As part of this process, starting from 1 April
2012, Jet4You will be consolidated into the Belgian business. This
is a natural fit as Jet4You is currently owned and operated by the
Belgian business and Jetairfly is our lowest cost airline.
Emerging Markets
Emerging Markets reported an underlying loss of GBP13m (H1 11:
loss of GBP6m). This was primarily driven by the continued impact
of unrest in Egypt which affected our Russian business.
Emerging Markets (share of JV)
H1 12 H1 11 Change %
Underlying operating loss (GBPm) (13) (6) -117%
Accommodation & Destinations
A&D delivered improved profits of GBP8m (H1 11: profit of
GBP7m), despite investing an incremental GBP4m into the
Accommodation OTA business during the period.
Roomnights for the Accommodation Wholesaler (previously referred
to as B2B) increased by 19% due to strong organic growth from the
brands Hotelbeds and Bedsonline. The key growth areas were in
European Cities, the Americas and Asia.
Roomnights for Accommodation OTA (previously referred to as B2C)
increased by 7% due to a good performance from LateRooms UK and
AsiaRooms. The expansion and roll out of the AsiaRooms brand is on
track.
In Cruise Handling (previously referred to as Intercruises), the
number of port calls handled increased by 6%. In Incoming Services
(previously referred to as Destination Services), passenger numbers
increased by 3% over the prior year.
Accommodation & Destinations H1 12 H1 11 Change %
Customers ('000)
Accommodation Wholesaler roomnights (Online) 5,862 4,956 +18%
Accommodation OTA roomnights (Online) 2,870 2,673 +7%
Incoming passenger volumes 3,905 3,794 +3%
Revenue (GBPm) 278 246 +13%
Underlying operating profit (GBPm) 8 7 +14%
Specialist & Activity
Specialist & Activity reported an underlying loss of GBP16m
(H1 11: loss of GBP1m). The adverse variance to the prior year was
driven primarily by the Education, Sport and Adventure divisions.
In Education, trading remains weak due to the challenging economic
climate, in particular on premium products such as School Ski, and
a weakness in gap year travel due to a rise in university tuition
fees. The Sport division was adversely impacted by the IRB Rugby
World Cup in New Zealand when an earthquake meant that matches had
to be moved from Christchurch to Auckland. The Adventure business
was impacted by lower demand for North African holidays.
This was partly offset by a good performance from North American
Specialist, which benefited from increased demand in its Starquest
business (private jet tours). Also, in the Specialist Holiday
Group, there was a significant improvement in ski during the second
quarter.
Specialist & Activity H1 12 H1 11 Change %
Customers ('000) 696 699 Flat
Revenue (GBPm)
Adventure 129 73 +77%
North American Specialist 105 81 +30%
Education 96 82 +17%
Sport 33 30 +10%
Marine 57 44 +30%
Specialist Holiday Group 304 319 -5%
------- ------ ---------
Total 724 629 +15%
======= ====== =========
Underlying operating (loss) / profit (GBPm)
Adventure (4) (1) -300%
North American Specialist 7 6 +17%
Education (10) (3) -233%
Sport (3) 1 N/A
Marine (12) (11) -9%
Specialist Holiday Group 6 7 -14%
Total (16) (1) -1500%
======= ====== =========
Acquisitions and Investments
In the six months ended 31 March 2012, the Group invested GBP3m
on acquisitions.
Taxation
Underlying loss before tax for the half-year was GBP(367)m. The
effective tax rate on these profits is 27%. Based on the current
structure of the business and existing local taxation rates and
legislation, it is expected that the underlying tax rate will be
maintained at this level in the medium term. The actual tax rate
for the six month period ended 31 March 2012 is 36%. This differs
to the underlying tax rate due to the tax effect of separately
disclosed items and non-recognition of deferred tax assets in
certain loss making territories.
Dividends
The Board recommends an interim dividend per ordinary share of
3.4p (H1 11: 3.3p), payable to holders of relevant shares on the
register at 7 September 2012. This will be paid on 3 October
2012.
We intend to continue to operate a dividend re-investment plan
as an alternative to the cash dividend.
Separately disclosed items
Separately disclosed items net to a GBP52m expense in the period
(H1 11 credit: GBP58m). This represents restructuring costs
primarily relating to our turnaround actions in the French source
market, plus certain other smaller items. The GBP58m credit arising
in H1 11 was primarily due to a reduction in the UK pension scheme
liability following agreement with pension scheme members to cap
the rate of future growth of pensionable pay. Further information
is included in Note 5.
Cash and liquidity
The net debt position (cash and cash equivalents less loans,
overdrafts and finance leases) at 31 March 2012 was GBP1,184m (31
March 2011: GBP1,182m). This consisted of GBP424m of cash and
GBP98m of current interest-bearing loans and liabilities and
GBP1,510m of non-current interest-bearing loans and
liabilities.
Consolidated income statement
for the 6-month period ended 31 March 2012
Restated
6-month 6-month
period ended period ended Year ended
31 March 2012 31 March 2011 30 September 2011
-------------------------------------------------------- ----- --------------- --------------- -------------------
Note GBPm GBPm GBPm
-------------------------------------------------------- ----- --------------- --------------- -------------------
Revenue 4 5,447 5,207 14,687
Cost of sales (5,276) (5,032) (13,351)
-------------------------------------------------------- ----- --------------- --------------- -------------------
Gross profit 171 175 1,336
Administrative expenses (579) (493) (1,094)
Share of profits of joint ventures and associates 1 15 13
-------------------------------------------------------- ----- --------------- --------------- -------------------
Operating (loss) / profit 4 (407) (303) 255
-------------------------------------------------------- ----- --------------- --------------- -------------------
Analysed as:
Underlying operating (loss) / profit 4 (317) (307) 471
Separately disclosed items 5 (52) 58 (74)
Predecessor accounting for Magic Life 1 - (21) (17)
Acquisition related expenses 6 (35) (32) (82)
Impairment of goodwill 7 - - (39)
Taxation on profits and interest of joint ventures and
associates (3) (1) (4)
-------------------------------------------------------- ----- --------------- --------------- -------------------
(407) (303) 255
-------------------------------------------------------- ----- --------------- --------------- -------------------
Financial income 45 48 83
Financial expenses (95) (111) (194)
-------------------------------------------------------- ----- --------------- --------------- -------------------
Net financial expenses (50) (63) (111)
-------------------------------------------------------- ----- --------------- --------------- -------------------
(Loss) / profit before tax (457) (366) 144
Taxation 8 167 91 (57)
-------------------------------------------------------- ----- --------------- --------------- -------------------
(Loss) / profit for the period / year (290) (275) 87
-------------------------------------------------------- ----- --------------- --------------- -------------------
Attributable to:
Equity holders of the parent (288) (276) 85
Non-controlling interests (2) 1 2
-------------------------------------------------------- ----- --------------- --------------- -------------------
(Loss) / profit for the period / year (290) (275) 87
-------------------------------------------------------- ----- --------------- --------------- -------------------
Restated
6-month 6-month
period ended period ended Year ended
31 March 2012 31 March 2011 30 September 2011
-------------------------------------------------------- ----- --------------- --------------- -------------------
Pence Pence Pence
-------------------------------------------------------- ----- --------------- --------------- -------------------
Basic and diluted (loss) / earnings per share for
(loss) / profit attributable to the equity
holders of the Company during the period / year
Basic (loss) / earnings per share 10 (26.0) (24.9) 7.7
Diluted (loss) / earnings per share 10 (26.0) (24.9) 7.6
-------------------------------------------------------- ----- --------------- --------------- -------------------
Consolidated statement of comprehensive income
for the 6-month period ended 31 March 2012
Restated
6-month 6-month
period ended period ended Year ended
31 March 2012 31 March 2011 30 September 2011
--------------------------------------------------------------- --------------- --------------- -------------------
GBPm GBPm GBPm
--------------------------------------------------------------- --------------- --------------- -------------------
(Loss) / profit for the period / year (290) (275) 87
Other comprehensive (expense) / income
Foreign exchange translation (106) 81 (18)
Actuarial (losses) / gains arising in respect of defined
benefit pension schemes (26) 73 (89)
Cash flow hedges:
- movement in fair value 47 210 85
- amounts recycled through the consolidated income statement (2) (11) (4)
Available for sale financial assets:
- movement in fair value (1) 1 (2)
- amounts recycled to the consolidated income statement - - 1
Deferred tax on other comprehensive income / (expense) (6) (78) (29)
--------------------------------------------------------------- --------------- --------------- -------------------
Other comprehensive (expense) / income for the period / year
net of tax (94) 276 (56)
--------------------------------------------------------------- --------------- --------------- -------------------
Total comprehensive (expense) / income for the period / year (384) 1 31
--------------------------------------------------------------- --------------- --------------- -------------------
Total comprehensive (expense) / income for the period / year
Attributable to:
Equity holders of the parent (380) - 26
Non-controlling interests (4) 1 5
--------------------------------------------------------------- --------------- --------------- -------------------
Total (384) 1 31
--------------------------------------------------------------- --------------- --------------- -------------------
Consolidated balance sheet
at 31 March 2012
Restated
31 March 2012 31 March 2011 30 September 2011
Note GBPm GBPm GBPm
---------------------------------------------------------- ----- -------------- --------------- ------------------
Non-current assets
Intangible assets 4,569 4,680 4,642
Property, plant and equipment 1,075 1,013 1,001
Investments in joint ventures and associates 254 239 242
Other investments 71 80 72
Trade and other receivables 256 288 202
Retirement benefit asset 1 14 1
Derivative financial instruments 21 43 30
Deferred tax assets 305 182 138
---------------------------------------------------------- ----- -------------- --------------- ------------------
6,552 6,539 6,328
---------------------------------------------------------- ----- -------------- --------------- ------------------
Current assets
Inventories 78 74 69
Other investments 18 9 22
Trade and other receivables 1,721 1,759 1,472
Income tax recoverable 65 68 62
Derivative financial instruments 161 360 185
Cash and cash equivalents 14 424 378 902
Assets classified as held for sale 6 9 13
---------------------------------------------------------- ----- -------------- --------------- ------------------
2,473 2,657 2,725
Total assets 9,025 9,196 9,053
---------------------------------------------------------- ----- -------------- --------------- ------------------
Current liabilities
Interest-bearing loans and borrowings (98) (313) (96)
Retirement benefits (2) (2) (3)
Derivative financial instruments (89) (122) (133)
Trade and other payables 13 (4,452) (4,440) (4,622)
Provisions for liabilities (342) (262) (317)
Income tax payable (123) (78) (133)
(5,106) (5,217) (5,304)
---------------------------------------------------------- ----- -------------- --------------- ------------------
Non-current liabilities
Interest-bearing loans and borrowings (1,510) (1,247) (802)
Retirement benefits (512) (365) (511)
Derivative financial instruments (8) (10) (18)
Trade and other payables (56) (71) (56)
Provisions for liabilities (338) (317) (353)
Deferred tax liabilities (63) (110) (71)
---------------------------------------------------------- ----- -------------- --------------- ------------------
(2,487) (2,120) (1,811)
Total liabilities (7,593) (7,337) (7,115)
---------------------------------------------------------- ----- -------------- --------------- ------------------
Net assets 1,432 1,859 1,938
---------------------------------------------------------- ----- -------------- --------------- ------------------
Equity
Called up share capital 112 112 112
Convertible bond reserve 85 83 85
Other reserves 2,770 3,022 2,846
Accumulated losses (1,580) (1,360) (1,155)
---------------------------------------------------------- ----- -------------- --------------- ------------------
Total equity attributable to equity holders of the parent 1,387 1,857 1,888
Non-controlling interests 45 2 50
Total equity 1,432 1,859 1,938
---------------------------------------------------------- ----- -------------- --------------- ------------------
Consolidated statement of cash flows
for the 6-month period ended 31 March 2012
Year
6-month Restated ended
period ended 6-month period ended 30 September
31 March 2012 31 March 2011 2011
------------------------------------------------------------- --------------- ---------------------- --------------
GBPm GBPm GBPm
------------------------------------------------------------- --------------- ---------------------- --------------
(Loss) / profit for the period / year (290) (275) 87
Adjustment for:
Depreciation and amortisation 107 113 238
Impairment of intangible assets and property, plant and
equipment - 4 30
Impairment of goodwill - - 39
Equity-settled share-based payment expense 8 9 19
(Profit) / loss on sale of property, plant and equipment (7) (7) 6
Share of loss / (profit) of joint ventures and associates 1 (15) (13)
Loss / (gain) on foreign exchange 3 (16) 38
Dividends received from joint ventures and associates - 5 7
Pension curtailment gain recognised in the consolidated
income statement - (63) (64)
Financial income (45) (48) (83)
Financial expenses 95 111 194
Taxation (167) (91) 57
Operating (loss) / profit before changes in working capital
and provisions (295) (273) 555
Increase in inventories (3) (20) (9)
Increase in trade and other receivables (330) (350) (68)
(Decrease) / increase in trade and other payables (218) (28) 140
(Decrease) / increase in provisions and employee benefits (4) 29 125
------------------------------------------------------------- --------------- ---------------------- --------------
Cash flows from operations (850) (642) 743
Interest paid (38) (36) (86)
Interest received 5 - 9
Income taxes paid (23) (40) (53)
------------------------------------------------------------- --------------- ---------------------- --------------
Cash flows from operating activities (906) (718) 613
------------------------------------------------------------- --------------- ---------------------- --------------
Investing activities
Proceeds from sale of property, plant and equipment 42 59 148
Proceeds from disposal of investments 1 2 -
Acquisition of subsidiaries, net of cash acquired (10) (16) (33)
Proceeds from other investments - - 3
Investment in joint ventures and associates and other
investments (18) (9) (18)
Acquisition of property, plant and equipment (103) (101) (257)
Acquisition of intangible assets (40) (28) (56)
------------------------------------------------------------- --------------- ---------------------- --------------
Cash flows from investing activities (128) (93) (213)
------------------------------------------------------------- --------------- ---------------------- --------------
Financing activities
Proceeds from new loans 642 471 26
Repayment of borrowings (5) (448) (556)
Payment of finance lease liabilities (8) (39) (145)
Dividends paid to ordinary and non-controlling interests (37) (122) (124)
Shares purchased by Employee Benefit Trust - - (7)
Cash flows from financing activities 592 (138) (806)
------------------------------------------------------------- --------------- ---------------------- --------------
Net (decrease) / increase in cash and cash equivalents (442) (949) (406)
Cash and cash equivalents at start of period / year 902 1,304 1,304
Effect of foreign exchange on cash held (36) 23 4
------------------------------------------------------------- --------------- ---------------------- --------------
Cash and cash equivalents at end of period / year 424 378 902
------------------------------------------------------------- --------------- ---------------------- --------------
Consolidated statement of changes in equity for the 6-month
period ended 31 March 2012
Equity
Called Convertible holders
up share bond Merger Other Accumulated of the Non controlling
capital reserve reserve reserves losses parent interests Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------ ---------- ------------ --------- ---------- ------------ --------- ---------------- ------
At 1 October 2011 112 85 2,523 323 (1,155) 1,888 50 1,938
Total
comprehensive
expense for the
period
Loss for the
period - - - - (288) (288) (2) (290)
------------------ ---------- ------------ --------- ---------- ------------ --------- ---------------- ------
Other
comprehensive
(expense) /
income
Foreign exchange
translation - - - (108) 4 (104) (2) (106)
Actuarial gains
arising
in respect of
defined
benefit pension
schemes - - - - (19) (19) - (19)
Cash flow hedges - - - 32 - 32 - 32
Changes in the
fair
value of
available
for sale
financial
assets - - - - (1) (1) - (1)
Total other
comprehensive
expense - - - (76) (16) (92) (2) (94)
------------------ ---------- ------------ --------- ---------- ------------ --------- ---------------- ------
Total
comprehensive
expense for the
period - - - (76) (304) (380) (4) (384)
------------------ ---------- ------------ --------- ---------- ------------ --------- ---------------- ------
Transactions with
owners recorded
directly
in equity
Share-based
payments - - - - 5 5 - 5
Acquisition of
non-controlling
interests - - - - (1) (1) - (1)
Dividends - - - - (125) (125) (1) (126)
Total
transactions
with owners - - - - (121) (121) (1) (122)
------------------ ---------- ------------ --------- ---------- ------------ --------- ---------------- ------
At 31 March 2012 112 85 2,523 247 (1,580) 1,387 45 1,432
------------------ ---------- ------------ --------- ---------- ------------ --------- ---------------- ------
Consolidated statement of changes in equity for the 6-month
period ended 31 March 2011
Called up Convertible Equity Non
share bond Merger Other Accumulated holders of controlling
capital reserve reserve reserves losses the parent interests Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------- ----------- ------------ ----------- ----------- ------------ ----------- ------------ ------
At 1 October
2010 (as
previously
published) 112 83 2,490 282 (995) 1,972 1 1,973
Adjustment in
respect of
Magic Life - - 31 (9) (19) 3 - 3
---------------- ----------- ------------ ----------- ----------- ------------ ----------- ------------ ------
At 1 October
2010 (as
restated) 112 83 2,521 273 (1,014) 1,975 1 1,976
---------------- ----------- ------------ ----------- ----------- ------------ ----------- ------------ ------
Total
comprehensive
(expense) /
income for the
period
(Loss) / profit
for the period - - - - (276) (276) 1 (275)
---------------- ----------- ------------ ----------- ----------- ------------ ----------- ------------ ------
Other
comprehensive
income
Foreign
exchange
translation - - - 81 - 81 - 81
Actuarial gains
arising in
respect of
defined
benefit
pension
schemes - - - - 49 49 - 49
Cash flow
hedges - - - 145 - 145 - 145
Changes in the
fair value of
available for
sale financial
assets - - - - 1 1 - 1
---------------- ----------- ------------ ----------- ----------- ------------ ----------- ------------ ------
Total other
comprehensive
income - - - 226 50 276 - 276
---------------- ----------- ------------ ----------- ----------- ------------ ----------- ------------ ------
Total
comprehensive
income /
(expense) for
the period - - - 226 (226) - 1 1
---------------- ----------- ------------ ----------- ----------- ------------ ----------- ------------ ------
Transactions
with owners
recorded
directly in
equity
Share-based
payments - - - - 11 11 - 11
Own share
transactions - - - - (9) (9) - (9)
Capital
increase in
Magic Life - - 2 - - 2 - 2
Dividends - - - - (122) (122) - (122)
---------------- ----------- ------------ ----------- ----------- ------------ ----------- ------------ ------
Total
transactions
with owners - - 2 - (120) (118) - (118)
---------------- ----------- ------------ ----------- ----------- ------------ ----------- ------------ ------
At 31 March
2011 112 83 2,523 499 (1,360) 1,857 2 1,859
---------------- ----------- ------------ ----------- ----------- ------------ ----------- ------------ ------
1. Basis of preparation
Statement of compliance
These consolidated interim financial statements for the 6-month
period ended 31 March 2012 have been prepared in accordance with
the Disclosure and Transparency Rules of the Financial Services
Authority and with International Accounting Standard (IAS) 34
'Interim financial reporting' as adopted by the EU. The
consolidated interim financial statements should be read in
conjunction with the Company's published consolidated financial
statements for the year ended 30 September 2011, which were
prepared in accordance with IFRS as adopted by the European
Union.
The consolidated interim financial statements do not comprise
statutory accounts within the meaning of section 434 of the
Companies Act 2006. Statutory accounts for the year ended 30
September 2011 were approved by the Board of Directors on 4
December 2011 and delivered to the Registrar of Companies. The
report of the auditors on those accounts was (i) unqualified, (ii)
did not include a reference to any matters to which they drew
attention by way of emphasis without qualifying their report, and
(iii) did not contain a statement under section 498 of the
Companies Act 2006.
These consolidated interim financial statements were approved by
the Board of Directors on 7 May 2012.
Accounting policies
As required by the Disclosure and Transparency Rules of the
Financial Services Authority, this interim financial information
has been prepared applying the accounting policies and presentation
that were applied in the preparation of the Company's published
consolidated financial statements for the year ended 30 September
2011, except as noted below:
Taxes in the interim period are accrued using the tax rate that
would be applicable to expected total annual earnings.
a) New and amended standards adopted by the Group
The following accounting standards and interpretations issued by
the International Accounting Standards Board (IASB) or IFRS
Interpretations Committee (IFRIC) have been adopted by the Group
from 1 October 2011 with no significant impact on the consolidated
results or financial position:
-- IAS 24 - Related Party Disclosures (revised 2009)
-- Amendment to IFRIC 14 - Prepayments of a minimum funding requirement
-- Amendments to IFRS 7 - FinanciaI Instruments: Disclosures
-- Various IFRSs - 2010 Annual improvements
These adoptions have not had a significant impact on the current
or prior period's / year's results or balance sheet positions, and
therefore no restatement of the prior period's / year's equity or
(loss) / profit has been presented for new standards.
b) New and amended standards which are not relevant to the Group
-- Amendments to IFRS 1 - First time adoption on hyperinflation and
fixed dates
c) New interpretations and amendments to standards and
interpretations that have been issued but are not yet effective
The following further new accounting standards, amendments to
existing standards and interpretations are not yet effective and
have not been early adopted:
-- Various IFRSs - 2011 Annual improvements
-- Amendment to IFRS 7 - De-recognition disclosures
-- Amendment to IAS 12 - Income taxes on deferred tax
-- Amendment to IAS 1 - Presentation of financial statements on OCI
-- IFRS 9 - Financial instruments, on classification and measurement
of financial assets
-- IFRS 10 - Consolidated financial statements
-- IFRS 11 - Joint arrangements
-- IFRS 12 - Disclosures of interests in other entities
-- IFRS 13 - Fair value measurement
-- IAS 19 (revised 2011) - Employee benefits
-- IAS 27 (revised 2011) - Separate financial statements
The Group continues to monitor the potential impact of these and
other new standards and interpretations which may be endorsed by
the European Union and require adoption by the Group in future
accounting periods.
Restatement of prior period's results
As disclosed on pages 72-74 of the 2011 Annual Report and
Accounts, the Group restated its results for the period ended 30
September 2010 following the acquisition of six separate Magic Life
companies. The consolidated income statement and consolidated
balance sheet at 30 September 2011 contained in the 2011 Annual
Report and Accounts reflects this change and accordingly no
restatement of those primary statements are necessary. However, the
consolidated income statement and consolidated balance sheet at 31
March 2011 have not been published since this restatement was
announced. As such, the primary statements as at 31 March 2011 are
now restated for this change.
6-month Restated
period ended 6-month
31 March 2011 as previously Impact of predecessor period ended
reported accounting for Magic Life 31 March 2011
GBPm GBPm GBPm
-------------------------------- -------------------------------- -------------------------------- ----------------
Revenue 5,205 2 5,207
Cost of sales (5,011) (21) (5,032)
-------------------------------- -------------------------------- -------------------------------- ----------------
Gross profit/(loss) 194 (19) 175
Administrative expenses (491) (2) (493)
Share of profit of joint
ventures and associates 15 - 15
-------------------------------- -------------------------------- -------------------------------- ----------------
Operating loss (282) (21) (303)
-------------------------------- -------------------------------- -------------------------------- ----------------
Analysed as:
Underlying operating loss (307) -- (307)
Separately disclosed items 58 - 58
Predecessor accounting for
Magic Life - (21) (21)
Acquisition related expenses (32) - (32)
Taxation on results of joint
ventures and associates (1) - (1)
-------------------------------- -------------------------------- -------------------------------- ----------------
Loss before tax (345) (21) (366)
-------------------------------- -------------------------------- -------------------------------- ----------------
Loss after tax (254) (21) (275)
-------------------------------- -------------------------------- -------------------------------- ----------------
Impact
31 March of predecessor
2011 accounting Restated
as previously for Magic 31 March
reported Life 2011
GBPm GBPm GBPm
------------------------------- --------------- ---------------- -----------
Property, plant and equipment 1,004 9 1,013
Other non-current assets 5,525 1 5,526
------------------------------- --------------- ---------------- -----------
Total non-current assets 6,529 10 6,539
------------------------------- --------------- ---------------- -----------
Inventories 70 4 74
Current investments - 9 9
Trade and other receivables 1,739 20 1,759
Other current assets 815 - 815
------------------------------- --------------- ---------------- -----------
Total current assets 2,624 33 2,657
------------------------------- --------------- ---------------- -----------
Trade and other payables (4,386) (54) (4,440)
Provisions for liabilities (257) (5) (262)
Other current liabilities (515) - (515)
------------------------------- --------------- ---------------- -----------
Total current liabilities (5,158) (59) (5,217)
------------------------------- --------------- ---------------- -----------
Total non-current liabilities (2,120) - (2,120)
------------------------------- --------------- ---------------- -----------
Net assets 1,875 (16) 1,859
------------------------------- --------------- ---------------- -----------
Total equity 1,875 (16) 1,859
------------------------------- --------------- ---------------- -----------
Estimates and judgements
The preparation of interim financial statements requires
management to make estimates, judgements and assumptions that
affect the application of accounting policies and the reported
amounts of assets, liabilities, income and expenses. Actual results
may differ from these estimates.
Underlying measures of profit / (loss)
The Group believes that underlying operating profit / (loss),
underlying profit / (loss) before tax and underlying earnings /
(loss) per share provide additional guidance to statutory measures
to help understand the underlying performance of the business
during the financial period / year. The term underlying is not
defined by International Financial Reporting Standards. It is a
measure that is used by management to assess the underlying
performance of the business internally and is not intended to be a
substitute measure for Adopted IFRSs' GAAP measures. The Group
defines these underlying measures as follows:
Underlying operating profit / (loss) is operating profit or loss
from continuing operations stated before separately disclosed items
(Note 5), the impact of predecessor accounting, acquisition related
expenses, impairment of goodwill and interest and taxation on the
Group's share of the results of joint ventures and associates.
Underlying profit / (loss) before tax is profit or loss from
continuing operations before taxation (Group and share of joint
ventures and associates), the impact of predecessor accounting,
acquisition related expenses, impairment of goodwill and separately
disclosed items included within both the operating result and net
financial expenses.
Underlying earnings / (loss) used in the calculation of
underlying earnings / (loss) per share is profit / (loss) after tax
from continuing operations excluding the impact of predecessor
accounting, acquisition related expenses, impairment of goodwill
and separately disclosed items included within both the operating
result and net financial expenses. For the purpose of this
calculation, an underlying tax charge is used which excludes the
tax effects of separately disclosed items, acquisition related
expenses, goodwill impairment charges and separately disclosable
tax items.
It should be noted that the definitions of underlying items
being used in these consolidated interim financial statements are
those used by the Group and may not be comparable with the term
"underlying" as defined by other companies within both the same
sector, or elsewhere.
Separately disclosed items
Separately disclosed items are those significant items which in
management's judgement are highlighted by virtue of their size or
incidence to enable a full understanding of the Group's financial
performance. Such items are included within the income statement
caption to which they relate.
Acquisition related expenses
Acquisition related items comprise amortisation of business
combination intangibles, other acquisition related expenses and
contingent consideration classified as remuneration for
post-combination services.
Funding, liquidity and going concern
The Directors have considered the funding and liquidity position
of the Group.
The Board remains satisfied with the Group's funding and
liquidity position. The main sources of debt funding are:
1. a shareholder loan of EUR30m from TUI AG. On 30 April 2012,
EUR20m of this loan was repaid and the EUR10m balance will be paid
on 31 August 2012;
2. a total of GBP970m syndicated bank revolving credit
facilities which mature in June 2015;
3. GBP185m of bonding and letter of credit facilities which mature in June 2015;
4. a GBP350m convertible bond (due October 2014) issued in October 2009; and
5. a GBP400m convertible bond (due April 2017) issued in April 2010.
The ratio of Earnings Before Interest, Taxation, Depreciation,
Amortisation and operating lease Rentals (EBITDAR) to fixed charges
(being the aggregate amount of interest and any other finance
charges in respect of borrowings and including all payments under
operating leases) and the ratio of net debt to Earnings Before
Interest, Taxation, Depreciation and Amortisation (EBITDA), which
the Board believes to be the most useful measures of cash
generation and gearing, as well as being the main basis for the
Group's credit facility covenants, are currently well within the
covenant limits. Forecasts reviewed by the Board, including
forecasts adjusted for significantly worse economic conditions,
show continued compliance with these covenants.
On the basis of its forecasts, both base case and adjusted as
described above, and available facilities, the Board has concluded
that the going concern basis of preparation continues to be
appropriate.
2. Seasonality
The Group's travel leisure business is subject to significant
seasonal fluctuations between the Winter and Summer seasons,
resulting in losses being expected in the first half and profits
being expected in the second half of the year. The Group mitigates
this seasonal impact through operating a broad range of holiday
products in both the Winter and Summer seasons and in different
global holiday markets which have different annual cycles. There
are appropriate sources of debt funding, as described in Note 1, to
match the seasonality of the Group's cash flows.
3. Principal risks and uncertainties
The Group considers strategic, operational and financial risks
and identifies actions to mitigate those risks. The principal risks
and uncertainties faced by the Group for the remainder of the
financial year and which are unchanged from the prior year, are
listed below:
-- Global financial factors, such as exchange rates, fuel prices
and tax laws and the global economic environment
-- Political volatility, natural catastrophes and outbreaks
-- Regulatory environment, particularly in relation to aviation
taxes and environmental and consumer protection
-- Changing consumer preferences and demands
-- Reliance on IT systems
-- Investment into niche businesses and emerging markets
-- Ability to retain key management
Further details of the Group's risk profile analysis can be
found on pages 20 to 23 of the Group's Annual Report and Accounts
for the year ended 30 September 2011, available from the Group
website: www.tuitravelplc.com.
4. Segmental information
Information regarding the identification of the chief operating
decision-maker and operating segments together with the basis of
measurement for the current and prior periods and for the year
ended 30 September 2011 is disclosed on pages 82 and 85 of the
Group's 2011 Annual Report and Accounts.
6-month period ended 31 March 2012
Underlying
operating
Inter-segmental Total external (loss) /
Total revenue revenue revenue profit
Sector GBPm GBPm GBPm GBPm
------------------------------ --------------- ---------------- ---------------- ------------
UK & Ireland 1,147 (98) 1,049 (125)
Canada - - - 20
Nordics 535 - 535 22
Hotels 53 (43) 10 (26)
------------------------------ --------------- ---------------- ---------------- ------------
Total Northern Region 1,735 (141) 1,594 (109)
------------------------------ --------------- ---------------- ---------------- ------------
Germany 1,570 (9) 1,561 (61)
Rest of Central Europe 178 (14) 164 (18)
------------------------------ --------------- ---------------- ---------------- ------------
Total Central Europe 1,748 (23) 1,725 (79)
------------------------------ --------------- ---------------- ---------------- ------------
French Airline 200 (26) 174 (19)
Jet4You 36 (15) 21 (8)
Rest of Western Europe 939 (8) 931 (65)
------------------------------ --------------- ---------------- ---------------- ------------
Total Western Europe 1,175 (49) 1,126 (92)
Total Mainstream 4,658 (213) 4,445 (280)
------------------------------ --------------- ---------------- ---------------- ------------
Specialist & Activity 724 - 724 (16)
Accommodation & Destinations 342 (64) 278 8
Emerging Markets - - - (13)
All other segments and
unallocated items - - - (16)
Total Group 5,724 (277) 5,447 (317)
------------------------------ --------------- ---------------- ---------------- ------------
6-month period ended 31 March 2011
Underlying
Inter-segmental Total external operating
Total revenue revenue revenue (loss) /
(restated) (restated) (restated) profit (restated)
Sector GBPm GBPm GBPm GBPm
------------------------------ --------------- ---------------- ---------------- -------------------
UK & Ireland 1,102 (37) 1,065 (173)
Canada - - - 19
Nordics 510 - 510 33
Hotels 50 (38) 12 (16)
------------------------------ --------------- ---------------- ---------------- -------------------
Total Northern Region 1,662 (75) 1,587 (137)
------------------------------ --------------- ---------------- ---------------- -------------------
Germany 1,503 (10) 1,493 (67)
Rest of Central Europe 178 (19) 159 (15)
------------------------------ --------------- ---------------- ---------------- -------------------
Total Central Europe 1,681 (29) 1,652 (82)
------------------------------ --------------- ---------------- ---------------- -------------------
French Airline 213 (48) 165 (3)
Jet4You 38 (2) 36 (10)
Rest of Western Europe 896 (4) 892 (63)
------------------------------ --------------- ---------------- ---------------- -------------------
Total Western Europe 1,147 (54) 1,093 (76)
Total Mainstream 4,490 (158) 4,332 (295)
------------------------------ --------------- ---------------- ---------------- -------------------
Specialist & Activity 630 (1) 629 (1)
Accommodation & Destinations 319 (73) 246 7
Emerging Markets - - - (6)
All other segments and
unallocated items - - - (12)
Total Group 5,439 (232) 5,207 (307)
------------------------------ --------------- ---------------- ---------------- -------------------
Year ended 30 September 2011
Underlying
operating
Inter-segmental Total external profit /
Total revenue revenue revenue (loss)
Sector GBPm GBPm GBPm GBPm
------------------------------ --------------- ----------------- ---------------- -----------
UK & Ireland 3,648 (60) 3,588 149
Canada - - - 18
Nordics 1,055 (1) 1,054 70
Hotels 184 (155) 29 13
------------------------------ --------------- ----------------- ---------------- -----------
Total Northern Region 4,887 (216) 4,671 250
------------------------------ --------------- ----------------- ---------------- -----------
Germany 4,261 (26) 4,235 89
Rest of Central Europe 666 (60) 606 14
------------------------------ --------------- ----------------- ---------------- -----------
Total Central Europe 4,927 (86) 4,841 103
------------------------------ --------------- ----------------- ---------------- -----------
French Airline 426 (70) 356 (10)
Jet4You 88 (7) 81 (10)
Rest of Western Europe 2,717 (3) 2,714 37
------------------------------ --------------- ----------------- ---------------- -----------
Total Western Europe 3,231 (80) 3,151 17
Total Mainstream 13,045 (382) 12,663 370
------------------------------ --------------- ----------------- ---------------- -----------
Specialist & Activity 1,373 (1) 1,372 65
Accommodation & Destinations 879 (227) 652 72
Emerging Markets - - - (12)
All other segments and
unallocated items - - - (24)
Total Group 15,297 (610) 14,687 471
------------------------------ --------------- ----------------- ---------------- -----------
Reconciliation of underlying operating (loss) / profit in
segmental analysis to (loss) / profit before tax
Restated
6-month 6-month
period ended period ended Year ended
31 March 31 March 30 September
2012 2011 2011
GBPm GBPm GBPm
--------------------------------------- -------------- -------------- --------------
Underlying operating (loss) / profit (317) (307) 471
Separately disclosed items (52) 58 (74)
Predecessor accounting for Magic Life - (21) (17)
Acquisition related expenses (35) (32) (82)
Impairment of goodwill - - (39)
Taxation on profits and interest of
joint ventures and associates (3) (1) (4)
--------------------------------------- -------------- -------------- --------------
Operating (loss) / profit (407) (303) 255
Net financial expenses (50) (63) (111)
--------------------------------------- -------------- -------------- --------------
(Loss) / profit before tax (457) (366) 144
--------------------------------------- -------------- -------------- --------------
5. Separately disclosed items
6-month 6-month
period ended period ended Year ended
31 March 2012 31 March 2011 30 September 2011
GBPm GBPm GBPm
--------------------------------------------------------- --------------- --------------- -------------------
Separately disclosed items in operating (loss) / profit
Restructuring and other separately disclosed items 59 (53) 74
Aircraft and other assets (7) (1) -
Items relating to the prior year - - 7
--------------------------------------------------------- --------------- --------------- -------------------
Total pre volcanic ash 52 (54) 81
Incremental costs caused by volcanic ash disruption - (4) (7)
--------------------------------------------------------- --------------- --------------- -------------------
Total 52 (58) 74
--------------------------------------------------------- --------------- --------------- -------------------
Separately disclosed financial expenses - 6 -
--------------------------------------------------------- --------------- --------------- -------------------
Restructuring and other separately disclosed items
Mainstream restructuring costs account for GBP51m of the total
incurred in the 6-month period ended 31 March 2012 and principally
relate to the restructuring programme in France where a single tour
operating business, TUI France, is being created; the restructure
of the Moroccan airline Jet4You; and the ongoing restructure of the
German business.
In addition there has been a total of GBP1m restructuring costs
incurred across the Specialist & Activity and Accommodation
& Destinations Sectors as their programmes near completion, and
GBP7m of costs incurred in Group head office companies, being
primarily costs incurred supporting the various restructuring
programmes around the Group.
During the 6-month period ended 31 March 2011, the Company
engaged in a consultation process with the members of its defined
benefit pension schemes which resulted in a restriction to salary
increases used under the rules of the pension schemes to calculate
benefits to a maximum of 2.5% in any one year. This change resulted
in a reduction in accrued pension liabilities measured under IAS 19
of GBP63m, which under IAS 19 is recognised fully in the income
statement in the period in which it occurs. Therefore a credit of
GBP63m was included in the consolidated income statement in
relation to this curtailment, which was included as a separately
disclosed item.
Also included in the comparative 6-month period ended 31 March
2011 were Mainstream restructuring costs of GBP10m which
principally related to the ongoing restructure of Corsair, the
scheduled French airline, and the retail network of what was
Nouvelles Frontieres in France. In addition there was GBP1m of
restructuring costs in the Specialist and Activity sector and GBP7m
of restructuring costs incurred in Group head office companies,
offset by a GBP9m credit on the change in value of unhedged foreign
currency derivative instruments.
Aircraft and other assets
During the 6-month period ended 31 March 2012, profit on the
sale and leaseback of aircraft amounted to GBP7m.
During the 6-month period ended 31 March 2011, the principal
charge was GBP4m in relation to a further impairment of the cruise
ship, the 'Island Escape', after its dry-dock costs were more
expensive than previously anticipated. This charge was offset by
GBP5m profit on the sale and leaseback of aircraft and the disposal
of aircraft engines previously held for sale.
Impact of volcanic ash
During the 6-month period ended 31 March 2011, there was a
release of GBP4m of accruals as costs in relation to the disruption
in 2010 were in the process of being finalised with third party
suppliers. No further items are expected to arise in this
category.
Separately disclosed financial expenses
There have been no items of a separately disclosable nature
within financial expenses or financial income during the 6-month
period ended 31 March 2012.
The separately disclosed financial expenses in the 6 months
ended 31 March 2011, related to interest charges on the late
settlement of tax liabilities in Spain.
6. Analysis of acquisition related expenses
6-month 6-month
period ended period ended Year ended
31 March 2012 31 March 2011 30 September 2011
GBPm GBPm GBPm
----------------------------------------------------------- --------------- --------------- -------------------
Acquisition related expenses in operating (loss) / profit
Amortisation of business combination intangibles 30 28 66
Other acquisition related expenses 3 3 11
Remuneration for post-combination services 2 1 5
----------------------------------------------------------- --------------- --------------- -------------------
Total 35 32 82
----------------------------------------------------------- --------------- --------------- -------------------
7. Goodwill impairment charge
The goodwill impairment charge in the year ended 30 September
2011 of GBP39m related to the French tour operator following a
deterioration in trading results during 2011 of the French source
market due to the political unrest in North Africa, this being a
key destination for the French market.
8. Taxation
The Group's effective tax rate, being tax for the 6-month period
ended 31 March 2012 is 36%. The Group's underlying effective tax
rate, being tax on underlying loss before tax for the same period
is 27%.
Restated
6-month 6-month
period ended period ended Year ended
31 March 2012 31 March 2011 30 September 2011
GBPm GBPm GBPm
--------------------------------------------------------------- --------------- --------------- -------------------
Loss before tax reported in the consolidated income statement (457) (366) 144
Less share of profit in joint ventures and associates (1) (15) (13)
(458) (381) 131
--------------------------------------------------------------- --------------- --------------- -------------------
Total income tax credit / (charge) in the consolidated income
statement 167 91 (57)
Effective tax rate 36% 24% 44%
--------------------------------------------------------------- --------------- --------------- -------------------
The effective tax rates shown above differ from the underlying
effective tax rate of 27% due to the tax effect of separately
disclosed items and non-recognition of deferred tax assets in
certain loss making territories.
9. Dividends
The following dividends relating to ordinary shares have been
deducted from equity in the period:
6-month
6-month period ended
period ended 31 March Year ended
31 March 2012 2011 30 September 2011
GBPm GBPm GBPm
---------------------------------- --------------- -------------- -------------------
Interim dividend paid for 2011 36 - -
Final dividend proposed for 2011 89 - -
Interim dividend paid for 2010 - 36 36
Final dividend paid for 2010 - 86 86
Total dividends 125 122 122
---------------------------------- --------------- -------------- -------------------
The interim dividend in respect of the year ended 30 September
2011 of 3.3p per ordinary share, totalling GBP36m was paid on 3
October 2011 and deducted from equity in the current period.
At the Company's AGM on 7 February 2012, the shareholders
approved the final recommended dividend for 2011 of 8.0p per
ordinary share. The value of this dividend, of GBP89m, has
therefore been recognised as a deduction from equity in the period
and as a liability at 31 March 2012. The dividend was paid on 10
April 2012.
Subsequent to the balance sheet date, the Directors have
proposed an interim dividend for the 6-month period ended 31 March
2012 of 3.4p per ordinary share, totalling GBP38m, payable on 3
October 2012.
A dividend reinvestment plan is in operation. Those shareholders
who have not elected to participate in this plan, and who would
like to participate with respect to the 2012 interim dividend, may
do so by contacting Equiniti on 0871 384 2030. The last day for
election for the proposed interim dividend is 19 September 2012 and
any requests should be made in good time ahead of that date.
10. (Loss) / earnings per share
The basic (loss) / earnings per share is calculated by dividing
the result attributable to ordinary shareholders by the applicable
weighted average number of shares in issue during the period,
excluding those held in the employee benefit trusts.
The diluted (loss) / earnings per share is calculated by:
-- taking losses / earnings attributable to ordinary shareholders adjusted
where the effect would be dilutive by the interest expense of the
Group's convertible bond net of tax; and
-- dividing by the adjusted weighted average number of ordinary shares
and where the effect would be dilutive, outstanding share awards
and the conversion to ordinary shares of the Group's convertible
bond.
In accordance with IAS 33: Earnings per share, the calculation
of basic and underlying diluted loss per share has not included
items that are anti-dilutive. Therefore there is no difference
between the calculation of basic and diluted loss per share in the
6-month periods ended 31 March 2012 and 31 March 2011.
The additional underlying earnings per share measures have been
given to provide the reader of the interim financial statements
with a better understanding of the results.
Basic and diluted loss per share for the 6-month period ended 31
March 2012 was as follows:
Weighted
average Weighted
number of Loss per share average number Restated loss
Loss for the shares for for the Restated of shares for per share for
6-month the 6-month 6-month loss for the the the 6-month
period ended period ended period ended 6-month period 6-month period period ended
31 March 31 March 31 March ended ended 31 March
2012 2012 2012 31 March 2011 31 March 2011 2011
GBPm Millions Pence GBPm Millions Pence
Basic and
diluted loss
per share (288) 1,107 (26.0) (276) 1,107 (24.9)
--------------- ---------------
Separately
disclosed
items 52 - (58) -
Predecessor
accounting for
Magic Life - - 21 -
Acquisition
related items 35 - 32 -
Tax base
difference (65) - 19 -
Basic and
diluted
underlying
loss per share (266) 1,107 (24.0) (262) 1,107 (23.6)
---------------- --------------- --------------- --------------- --------------- --------------- ---------------
Following the restatement in respect of the acquisition of the
Magic Life companies (see Note 1), the basic and diluted loss per
share for the period ended 31 March 2011 has increased by 1.9p,
from 23.0p to 24.9p. The basic and diluted underlying loss per
share for 31 March 2011 has not changed.
Basic and diluted earnings per share for the year ended 30
September 2011 was as follows:
Weighted
Earnings average number Earnings
Year ended of shares per share
30 September 30 September 30 September
2011 2011 2011
GBPm Millions Pence
---------------------------- -------------- ---------------- --------------
Basic earnings per share 85 1,107 7.7
--------------
Effect of dilutive options - 11
--------------
Diluted earnings per share 85 1,118 7.6
---------------------------- -------------- ---------------- --------------
Basic and diluted underlying earnings per share for the year
ended 30 September 2011 was as follows:
Weighted
Earnings average Earnings
Year ended number per share
30 September of shares 30 September
2011 30 September 2011
GBPm 2011 Pence
Millions
---------------------------------- -------------- -------------- --------------
Basic earnings per share 85 1,107 7.7
--------------
Acquisition related expenses and
impairment of goodwill 121 -
Predecessor accounting for Magic
Life 17 -
Separately disclosed items 74 -
Tax base difference (36) -
---------------------------------- -------------- -------------- --------------
Basic underlying earnings per
share 261 1,107 23.6
Effect of dilutive options - 11
Effect of convertible bond (net
of tax) 45 205
---------------------------------- -------------- -------------- --------------
Diluted underlying earnings per
share 306 1,323 23.1
---------------------------------- -------------- -------------- --------------
11. Acquisitions and investments
Acquisitions in the 6-month period ended 31 March 2012
During the 6-month period ended 31 March 2012, the Group
acquired fifteen travel agents in Germany, two travel agents in
Poland and one travel agent in Brazil, Eurolink Viagens e Turismo
Ltda. The total consideration for these 18 acquisitions was GBP3m.
The fair value of assets acquired was GBP1m and the provisional
goodwill arising for these acquisitions was GBP2m. This goodwill
represents primarily the value of increased market share of travel
agencies within Germany.
The acquisitions did not have a material effect on revenue and
the Group result for the period.
The total cash outflow in the period from acquisition of
subsidiaries and travel agencies (net of cash acquired) was GBP10
million, which comprised GBP3 million relating to current period
acquisitions and GBP7 million relating to prior period
acquisitions.
12. Acquisitions of property, plant and equipment and intangible
assets
Payments made for additions of property, plant and equipment and
intangible assets totalled GBP143m (2011: GBP129m) in the six month
period to 31 March 2012. This comprises GBP5m (2011: GBP10m) for
land and buildings, GBP5m (2011: GBP33m) for yachts, motor boats
and cruise ships, GBP55m (2011: GBP21m) for aircraft, advance
payments for aircraft and related equipment, GBP40m (2011: GBP28m)
for computer hardware and software and GBP38m (2011: GBP37m) of
other equipment and intangibles.
13. Trade and other payables
Restated
6-month 6-month
period ended period ended Year ended
31 March 31 March 30 September
2012 2011 2011
GBPm GBPm GBPm
-------------------------- -------------- -------------- --------------
Customer deposits 2,385 2,388 1,704
Other 2,067 2,052 2,918
Trade and other payables 4,452 4,440 4,622
-------------------------- -------------- -------------- --------------
14. Movements in cash and net debt
Amounts
Cash due to Other
and cash Convertible related Finance financial
equivalents bonds parties Bank loans Loan notes leases liabilities Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------ ------------ ------------ ----------- ------------ ------------ ----------- ------------ --------
At 1
October
2011 902 (654) (36) (30) (1) (132) (45) 4
Cash
movement (442) - - (637) - 8 - (1,071)
Non-cash
movement - (12) - 10 - (84) - (86)
Foreign
exchange (36) - 2 - - 3 - (31)
At 31 March
2012 424 (666) (34) (657) (1) (205) (45) (1,184)
------------ ------------ ------------ ----------- ------------ ------------ ----------- ------------ --------
Amounts
Cash due to Other
and cash Convertible related Finance financial
equivalents bonds parties Bank loans Loan notes leases liabilities Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------ ------------ ------------ ----------- ------------ ------------ ----------- ------------ --------
At 1
October
2010 1,304 (633) (575) (36) (2) (269) (38) (249)
Cash
movement (949) - 438 (461) - 39 - (933)
Non-cash
movement - (12) - - 1 (4) - (15)
Foreign
exchange 23 - (4) (1) (1) (1) (1) 15
At 31 March
2011 378 (645) (141) (498) (2) (235) (39) (1,182)
------------ ------------ ------------ ----------- ------------ ------------ ----------- ------------ --------
15. Capital commitments
The following amounts have been contracted but not provided for
at the balance sheet date:
31 March 31 March 30 September
2012 2011 2011
GBPm GBPm GBPm
--------------------- ---------- --------- -------------
Capital commitments - 4 2
--------------------- ---------- --------- -------------
In addition to the above items, at 31 March 2012 the Group had
contracted to purchase 33 (2011: 40) aircraft with initial
deliveries commencing in the third quarter of the financial year
2012 and then ongoing through to 2015. At list price, the total
order value was US$4,289m (2011: US$4,634m).
The Group intends to refinance these aircraft in advance of
their delivery dates and therefore does not expect to use its own
cash resources for their purchase.
The Group's joint ventures and associates had no material
capital commitments at 31 March 2012 (2011: GBPnil).
16. Contingent liabilities
The Group is at any time defending a number of actions against
it arising in the normal course of business. Provision is made for
these actions where this is deemed appropriate. No other actions
which are outstanding at 31 March 2012 are expected to have a
material effect on these accounts. The Directors consider that
adequate provision has been made for all known liabilities.
17. Related party transactions
(a) Ultimate controlling party
The Group's ultimate controlling party is TUI AG, a company
registered in Berlin and Hanover (Federal Republic of Germany).
(b) Related party transactions
A shareholder loan was advanced to the Company by TUI AG on 13
July 2011, in respect of acquiring Magic Life. The loan bears
interest at EURIBOR plus a margin of 2.75% per annum. The Company
can make voluntary repayments at any time during the term of the
loan subject to a minimum repayment of EUR1m and the giving of 10
days' notice. The drawn balance of the loan at 31 March 2012 was
EUR30m, not including accrued interest payable. It is repayable in
two instalments: 30 April 2012: EUR20m and 31 August 2012:
EUR10m.
The Group also held receivables of GBP83 million (31 March 2011:
GBP38 million) and payables of GBP127 million (2011: GBP101
million) with its own joint ventures and with TUI AG and its
subsidiaries and joint ventures, which arose through the normal
course of business, including under the Hotel Framework Agreement
and Trademark Licence Agreement, details of which are set out in
Note 30 of the Group's 2011 Annual Report and Accounts. During the
current and prior financial periods the Group transacted with its
joint ventures and associates in the normal course of business.
These transactions did not have a significant impact on the result
for the periods.
18. Post balance sheet events
Shareholder loan
On 30 April 2012, EUR20m of the shareholder loan principal
amount, together with accrued interest, was repaid to TUI AG in
line with the agreed repayment schedule.
Responsibility statement of the Directors in respect of the half
yearly financial statements
The Directors confirm that to the best of their knowledge:
-- the consolidated interim financial statements have been prepared
in accordance with IAS 34 'Interim Financial Reporting' as adopted
by the EU;
-- the interim management report includes a fair review of the information
required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an
indication of important events that have occurred during the
first six months of the financial year and their impact on the
consolidated set of financial statements; and a description of
the principal risks and uncertainties for the remaining six months
of the year; and
(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related
party transactions that have taken place in the first six months
of the current financial year and that have materially affected
the financial position or performance of the Group during that
period; and any changes in the related party transactions described
in the last annual report that could do so.
The maintenance and integrity of the TUI Travel PLC website is
the responsibility of the Directors; the work carried out by the
auditors does not involve consideration of these matters and,
accordingly, the auditors accept no responsibility for any changes
that may have occurred to the financial statements since they were
initially presented on the website.
Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation
in other jurisdictions.
The Directors of TUI Travel PLC are listed on page 47 of the TUI
Travel PLC Annual Report and Accounts for the year ended 30
September 2011.
On behalf of the Board of Directors
Will Waggott
Chief Financial Officer
7 May 2012
Introduction
We have been engaged by the Company to review the consolidated
set of interim financial statements in the half-yearly financial
report for the six months ended 31 March 2012, which comprises the
consolidated income statement, the consolidated statement of
comprehensive income, the consolidated balance sheet, the
consolidated statement of cash flows, the consolidated statement of
changes in equity and related notes. We have read the other
information contained in the half-yearly financial report and
considered whether it contains any apparent misstatements or
material inconsistencies with the information in the consolidated
set of interim financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the Directors. The Directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure and Transparency Rules of the United Kingdom's
Financial Services Authority.
As disclosed in Note 1, the annual financial statements of the
Group are prepared in accordance with IFRSs as adopted by the
European Union. The consolidated set of interim financial
statements included in this half-yearly financial report has been
prepared in accordance with International Accounting Standard 34,
'Interim Financial Reporting', as adopted by the European
Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the consolidated set of interim financial statements in the
half-yearly financial report based on our review. This report,
including the conclusion, has been prepared for and only for the
Company for the purpose of the Disclosure and Transparency Rules of
the Financial Services Authority and for no other purpose. We do
not, in producing this report, accept or assume responsibility for
any other purpose or to any other person to whom this report is
shown or into whose hands it may come save where expressly agreed
by our prior consent in writing.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity' issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the consolidated set of interim financial
statements in the half-yearly financial report for the six months
ended 31 March 2012 is not prepared, in all material respects, in
accordance with International Accounting Standard 34 as adopted by
the European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
PricewaterhouseCoopers LLP
Chartered Accountants
London
7 May 2012
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LFFFLETIDIIF
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