TIDMTT.
RNS Number : 6376S
TUI Travel PLC
04 December 2012
4 December 2012
TUI Travel PLC
("TUI Travel")
Preliminary results for the year ended 30 September 2012
WELL POSITIONED FOR CONTINUED GROWTH
Key financials
Year ended 30 September
Underlying results(1) Statutory results
GBPm 2012 2011 Change% 2012 2011
Revenue 14,460 14,687 -2% 14,460 14,687
Operating profit 490 471 +4% 301 255
Profit before tax 390 360 +8% 201 144
Free cash flow 240 451 -47% 240 451
Basic EPS (pence) 25.8 23.6 +9% 12.5 7.7
Dividend per share (pence) 11.7 11.3 +4% 11.7 11.3
---------------------------- ------- ------- -------- --------- ---------
(1) Underlying operating profit excludes separately disclosed
items, amortisation of business combination intangibles,
acquisition related expenses, impairment of goodwill and available
for sale financial assets, predecessor accounting for Magic Life in
2011 and interest and taxation of results of the Group's joint
ventures and associates
Highlights
-- Record year of profit and improved operational efficiency
* Operating profit increase of 12% to GBP526m on a
constant currency* basis. Underlying operating profit
of GBP490m (2011: GBP471m), an increase of 4%.
* Record Mainstream underlying operating profits, on a
constant currency* basis, in all markets with the
exception of France and Southern Europe.
* Outstanding performance in the UK with a record
underlying operating profit of GBP197m (2011:
GBP149m) and operating profit margins of 5.4%, up
from 4.2% in the prior year.
* Business improvement programme outperformance with
GBP42m delivered in the year.
* Strong underlying earnings per share growth of 9% to
25.8p (2011: 23.6p). Statutory earnings per share
grew by 62% to 12.5p (2011: 7.7p).
* Final dividend increase of 4% to 8.3p per share
(2011: 8.0p), resulting in a full year dividend of
11.7p per share (2011: 11.3p).
-- Modern Mainstream strategy delivering results
* Sales of higher margin unique holidays increased by
three percentage points to 65% of Mainstream
holidays.
* Online sales up three percentage points to 33% of
Mainstream sales. Direct distribution up two
percentage points to 65% of Mainstream sales.
-- Significant international expansion across Online Accommodation
* Online Accommodation profits up 3% to GBP35m,
including an GBP11m investment in our Accommodation
OTA.
* Accommodation Wholesaler continues to consolidate its
global leadership position; TTV growth of 13% to
GBP1.4bn.
* Accommodation OTA - Continued investment in high
growth markets; TTV growth of 4% to GBP447m including
AsiaRooms growth of 25%.
-- Clear strategy continuing to drive strong trading momentum
* Very encouraging Winter 2012/13 trading.
* Strong Summer 2013 bookings in the UK, Nordics and
Germany. Significant growth in profitable market
share in the UK.
* Clear roadmap for sustainable future growth with an
annualised underlying operating profit growth rate of
between 7 to 10%.
*Constant currency basis calculated by translating the 2012 results
at 2011 exchange rates
Peter Long, Chief Executive of TUI Travel PLC, commented:
"The year has been one of many successes. We have delivered
record Group profits while the UK achieved outstanding results both
in terms of profit and margin all against a backdrop of continued
economic uncertainty. Our proven strategy continues to evolve and
drive strong trading momentum throughout the Group. Overall, with
the exception of France, trading for both Winter 2012/13 and Summer
2013 is very encouraging.
"We are today pleased to announce the next stage of our
strategic development. This roadmap for growth, built on our
detailed understanding of the market and robust business models,
means that we are well placed to continue to deliver long-term
sustainable growth, which in turn, will drive further value for
both our shareholders and our customers."
Investor and Analyst Webcast
A presentation for analysts and investors will be held today at
9.00am (GMT) at the London Stock Exchange, 10 Paternoster Square,
London, EC4M 7LS. The presentation will also be webcast. For
details of the webcast please visit www.tuitravelplc.com.
Enquiries:
Analysts & 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 645 790
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 AND OUTLOOK
CURRENT TRADING
As a result of our new Mainstream sector structure announced in
April 2012, where the regional structure was disbanded from 1
October 2012, we are now reporting Mainstream sector trading in the
format below with a focus on our four largest markets.
Winter 2012/13
Strong trading momentum from Summer 2012 has continued into
Winter 2012/13 across all major markets with the exception of
France. Our focus on unique holidays distributed online is
delivering very pleasing year-on-year volume growth with margins
that are in line with expectations.
Current Trading (1) Winter 2012/13
YoY variation% Total ASP(2) Total Total Risk Only
Sales(2) Customers(2)
Capacity(3) Left to sell(3)
MAINSTREAM
UK +4 +5 +1 Flat -2
Nordic region +5 +10 +5 +4 +3
Germany +6 +8 +2 -3 -14
France tour operators +8 -22 -28 -34 -35
Other (4) +1 Flat -1
Total Mainstream +4 +3 -1
SPECIALIST & ACTIVITY N/A -3 N/A
A&D (5) +7 +20 +12
----------------------- ------------- ---------- -------------- ------------ ----------------
(1) These statistics are up to 25 November 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) Other includes Austria, Belgium, Netherlands, Poland and
Switzerland
(5) These statistics refer to online accommodation businesses
only; Sales refer to total transaction value (TTV) and customers
refers to roomnights
In the UK, bookings are up by 1% against a flat capacity.
Average selling price is up 4%, partly reflecting the successful
pass-through of inflationary cost increases of circa 2-3%. Sales of
unique holidays (differentiated and exclusive product combined) are
up 5% compared with this time last year and account for 78% of
holidays sold to date, up three percentage points on the prior
year. Online sales continue to grow, accounting for 44% of Winter
holidays booked, up by three percentage points on the prior year.
Booked load factor is currently 49%.
In the Nordic region, bookings are up by 5%, in line with its
capacity increase. Average selling price is up 5%. Sales of unique
holidays (differentiated and exclusive product combined) are up 5%
compared with this time last year, accounting for 83% of holidays
sold to date, in line with the prior year. Online sales continue to
grow, accounting for 63% of Winter holidays booked, up by two
percentage points on the prior year. Booked load factor is
currently 73%.
In Germany, bookings are up 2% against a capacity decline of 3%.
Long-haul continues to perform well. Average selling price is up
6%. Sales of unique holidays (differentiated and exclusive product
combined) are up 8% compared with this time last year, accounting
for 55% of holidays sold to date, up five percentage points on the
prior year. Booked load factor is currently 56%.
In France, we have reduced capacity by 34%, with sizeable
reductions in loss-making capacity to Egypt and a number of
long-haul destinations. As a result of this, bookings are down 28%,
which is in line with our expectations. Booked load factor is
currently 55%.
In A&D bookings are up 12% and sales (TTV) are up 20% versus
the prior year. This was driven by both Accommodation Wholesaler,
where bookings are up 14% and Accommodation OTA, where bookings
increased by 7%.
Sales in Specialist & Activity are down 3%, driven by the
Education and Sport divisions. Trading in the Education division
reflects the challenging market place and in the Sport division
trading is down following tough comparatives from the same period
last year due to the IRB Rugby World Cup.
Summer 2013
It is still early in the bookings cycle for Summer 2013, however
trading to date has been very encouraging in those markets on
sale.
Current Trading (1) Summer 2013
YoY variation% Total ASP(2) Total Total Risk Only
Sales(2) Customers(2)
Capacity(3) Left to sell(3)
UK +3 +15 +12 +3 +1
Nordic region +3 +20 +16 +4 +3
Germany +3 +12 +9 Flat -1
--------------------- ------------- ---------- -------------- ------------ ----------------
(1) These statistics are up to 25 November 2012
(2) These statistics relate to all customers whether risk or
non-risk
(3) These statistics include all risk capacity programmes
In the UK, bookings are up by 12%, ahead of a 3% increase in
capacity. Whilst it is early in the booking cycle, we are
significantly outperforming a flat market. Average selling prices
are up by 3%. Sales of unique holidays (differentiated and
exclusive product combined) are up by 18% compared to the same
period last year accounting for 83% of holidays sold to date, up by
two percentage points. Online sales account for 32% of Summer
holidays booked, in line with the prior year. To date, 20% of the
programme has been sold.
In the Nordic region, bookings are up 16% and average selling
prices up 3%. Sales of unique holidays (differentiated and
exclusive product combined) are up by 18% compared to the same
period last year, accounting for 94% of holidays sold to date, up
by two percentage points. Online sales continue to grow, accounting
for 60% of Summer holidays booked, up by two percentage points on
the prior year. To date, 12% of the programme has been sold.
In Germany, the Summer 2013 programme launched very recently. We
are encouraged by early trading with bookings up by 9% and average
selling prices up by 3%. To date, 10% of the programme has been
sold.
Fuel / Foreign exchange
We have hedged the majority of our fuel and currency
requirements for the seasons currently on sale, 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.
Winter 2012/13 Summer 2013
Euro 96% 86%
US Dollars 76% 87%
Jet Fuel 93% 81%
As at 29 November 2012
------------------------ --------------- ------------
Business improvement programme
We announced at the start of our financial year that we expected
to deliver GBP107m of business improvement, in broadly even
tranches over the next three years. We have delivered GBP42m of
operational efficiency savings through the business improvement
programme in the last 12 months.
Outlook
Overall trading remains positive across all our major source
markets with the exception of France where the environment remains
extremely challenging. Strong trading momentum from Summer 2012 has
continued into Winter 2012/13, particularly in the UK and the
Nordics, where our unique holidays (differentiated and exclusive
product combined) are selling well and growth in our direct
distribution channels continues to have a positive effect on
margins. While still early in the booking cycle, the Summer 2013
programme, in the UK, Nordics and Germany is showing strong signs
of growth with additional capacity in the UK and Nordics.
Our strategy of increasing our unique holiday (differentiated
and exclusive product combined) offering, selling through direct
distribution channels with a focus on online and driving continued
operational efficiency throughout the business is paying dividends.
Our strong business models, which have evolved through a deep
understanding of the leisure travel market and the needs of our
customers, lay the foundations for continued success and long-term
sustainable growth. We have set out a road map for growth over the
next five years and will deliver improved customer experiences and
increased shareholder value.
Roadmap for growth
Our new roadmap for growth enables us to provide updated
guidance for the future prospects of the Group. We believe that TUI
Travel has the ability to deliver an underlying operating profit
CAGR of between 7 to 10% over the next five years. This includes
growing customer numbers while enhancing the margin within the
Mainstream business, growth in our Specialist & Activity
portfolio, as well as positive contributions from our fast growing
Online Accommodation business.
We will be hosting an analyst and investor morning at 9.00am
(GMT) today at which we will give further details in and around the
measures and outlook underpinning this growth.
BUSINESS AND FINANCIAL REVIEW
Group Performance
Year ended 30 September
Underlying results(1) Statutory results
GBPm 2012 2011 Change% 2012 2011
Revenue 14,460 14,687 -2% 14,460 14,687
Operating profit 490 471 +4% 301 255
Profit before tax 390 360 +8% 201 144
Free cash flow 240 451 -47% 240 451
Basic EPS (pence) 25.8 23.6 +9% 12.5 7.7
Dividend per share (pence) 11.7 11.3 +4% 11.7 11.3
---------------------------- ------- ------- -------- --------- ---------
(1) Underlying operating profit excludes separately disclosed
items, amortisation of business combination intangibles,
acquisition related expenses, impairment of goodwill and available
for sale financial assets, predecessor accounting for Magic Life in
2011 and interest and taxation of results of the Group's joint
ventures and associates
Group revenue declined by 2% from the prior year at GBP14,460m
(2011: GBP14,687m). This result was driven by organic growth of 2%
and a foreign currency translation impact of -4%. Organic revenue
growth was driven by higher volumes and average selling prices in
many source markets.
The main drivers of the year-on-year improvement in underlying
operating profit are:
GBPm
2011 underlying operating profit 471
Magic Life winter losses (17)
-----
2011 underlying operating profit (incl Magic Life winter losses) 454
-----
Trading 54
Flooding in Thailand - Nordics (13)
Investment in Accommodation OTA (11)
Business improvement 42
-----
2012 underlying operating profit at constant currency 526
FX translation (36)
-----
2012 underlying operating profit 490
=====
Underlying operating profit improved by GBP72m to GBP526m in
2012, on a constant currency basis and including the Magic Life
winter losses.
This was driven by strong performances in the UK, Nordic region,
Belgium, and Canada as well as the delivery of GBP42m cost savings
through the business improvement programme. However, these positive
results were partially offset by the retranslation of fourth
quarter Eurozone profits into Sterling, the inclusion of Magic Life
winter losses, investment in Accommodation OTA and Corsair
weakness.
A reconciliation of underlying operating profit to statutory
operating profit is as follows:
Year ended 30 September 2012 2011
GBPm GBPm
Underlying operating profit 490 471
Separately disclosed items (92) (74)
Predecessor accounting for Magic Life - (17)
Acquisition related expenses (62) (82)
Impairment of goodwill (20) (39)
Impairment of available for sale financial asset (10) -
Interest and taxation on results of joint ventures
and associates (5) (4)
------ ------
Statutory operating profit 301 255
====== ======
Segmental Performance
Segmental performance is based on underlying financial
information (which excludes certain items, including separately
disclosed items, acquisition related expenses and predecessor
accounting for Magic Life in 2011).
Mainstream
The Mainstream sector reported an underlying operating profit of
GBP420m (2011: GBP370m). On a constant currency basis, underlying
operating profit increased by 22% to GBP451m.
Mainstream 2012 2011 Change %
Customers ('000)(1)
Northern Region 6,660 6,867 -3%
Central Europe 7,382 7,282 +1%
Western Europe 6,067 6,100 -1%
------- ------- ---------
Total 20,109 20,249 -1%
======= ======= =========
Revenue (GBPm)
Northern Region 4,743 4,671 +2%
Central Europe 4,544 4,841 -6%
Western Europe 3,031 3,151 -4%
------- ------- ---------
Total 12,318 12,663 -3%
======= ======= =========
Underlying operating profit (GBPm)(2)
Northern Region 295 250 +18%
Central Europe 101 103 -2%
Western Europe 24 17 +41%
------- ------- ---------
Total 420 370 +14%
======= ======= =========
(1) Customer figures have been restated for 2011 to reflect
redefined product reporting following the implementation of a new
system
(2) Underlying operating profit excludes separately disclosed
items, amortisation of business combination intangibles,
acquisition related expenses, impairment of goodwill and available
for sale financial assets, predecessor accounting for Magic Life
and interest and taxation of results of the Group's joint ventures
and associates
Northern Region
The Northern Region reported an underlying operating profit of
GBP295m (2011: GBP250m). Most divisions improved year-on-year, with
a particularly strong performance by the UK, increasing underlying
operating profit by 32% to GBP197m.
The main drivers of the year-on-year change in underlying
operating profit are summarised in the following table:
Nordic Northern
GBPm UK Region Canada Hotels Region
2011 149 70 18 13 250
Magic Life winter losses - - - (17) (17)
---- -------- ------- ------- ---------
2011 (incl Magic Life
winter losses) 149 70 18 (4) 233
Trading 44 16 3 8 71
Flooding in Thailand -
Nordics - (13) - - (13)
Business improvement 4 - - - 4
FX translation - (2) - 2 -
---- -------- ------- ------- ---------
2012 197 71 21 6 295
==== ======== ======= ======= =========
Northern Region 2012 2011 Change %
Customers ('000)
UK & Ireland 5,158 5,440 -5%
Nordic region 1,502 1,427 +5%
------ ------ ---------
Total 6,660 6,867 -3%
====== ====== =========
Revenue (GBPm)
UK & Ireland 3,634 3,588 +1%
Nordic region 1,084 1,054 +3%
Canada - - -
Hotels 25 29 -14%
------ ------ ---------
Total 4,743 4,671 +2%
====== ====== =========
Underlying operating profit (GBPm)(1)
UK & Ireland 197 149 +32%
Nordic region 71 70 +1%
Canada 21 18 +17%
Hotels 6 13 -54%
------ ------ ---------
Total 295 250 +18%
====== ====== =========
(1) Underlying operating profit excludes separately disclosed
items, amortisation of business combination intangibles,
acquisition related expenses, impairment of goodwill and available
for sale financial assets, predecessor accounting for Magic Life
and interest and taxation of results of the Group's joint ventures
and associates
UK & Ireland
The UK & Ireland businesses delivered a GBP48m improvement
in underlying operating profit to GBP197m (2011: GBP149m), as a
direct result of the strategy of focusing on higher margin unique
holidays (differentiated and exclusive product combined)
distributed increasingly online. This improvement in profit led to
record underlying operating profit margins for the UK business of
5.4%.
Unique holidays (differentiated and exclusive product combined),
such as Sensatori, SplashWorld and Couples, continues to drive
value for our business. Unique holidays accounted for 79% of total
holidays in 2012, up four percentage points on 2011. We continue to
grow a number of our concepts including Couples, which offers
child-free hotels within the programme and Small and Friendly, a
collection of intimate hotels, which complements our core
offering.
Online sales grew by five percentage points to 44% of bookings
in 2012, more customers now book using our websites than by any
other distribution channel. Thomson remains one of the top most
visited travel websites in the UK. Further enhancements were made
to the First Choice website to improve navigation and enhance
content, which has resulted in a higher conversion rate of visits
to the website. Direct distribution increased by five percentage
points versus the prior year to 87% in 2012.
The UK business delivered GBP4m of efficiency savings towards
the business improvement programme in the year.
Nordic Region
The Nordic region achieved an improved underlying operating
profit of GBP71m (2011: GBP70m), delivering an operating margin of
6.5% for the year, one of the highest in the Group. The region
delivered a broadly flat performance over the year, despite a
GBP13m negative impact during the first half of 2012 as a result of
flooding in Bangkok which adversely affected consumer demand to
Thailand and reduced yields.
Unique holidays (differentiated and exclusive product combined)
accounted for 92% of total holidays in 2012, up five percentage
points on 2011. This increase in unique content was partly driven
by two new Blue Villages: Blue Village Exotic in Thailand that
launched during the Winter season and Blue Village Bodrum Imperial
in Turkey that launched in the summer.
The Nordic region continues to successfully implement its online
strategy, with online bookings accounting for 65% of the total in
2012, up four percentage points on 2011. Direct distribution
increased by one percentage point versus the prior year to 87% in
2012.
Canada
The strategic venture with Sunwing in Canada continues to
perform well, delivering an improved operating profit of GBP21m
(2011: GBP18m). The result was driven by a strong trading
performance, as a result of improved margins and volumes during the
period.
Hotels
The Hotels division comprises hotel management companies and
joint ventures in hotel assets. The division delivered underlying
operating profit of GBP6m in 2012 (2011: GBP13m). The result 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). This improvement was driven by changes in a number
of hotel concepts and the winter closure of unprofitable
hotels.
Central Europe
Central Europe delivered underlying operating profit of GBP101m
(2011: GBP103m). This result was delivered despite an adverse
foreign exchange impact of GBP18m due to the retranslation of
Eurozone profits into Sterling during the fourth quarter. The main
drivers of the year-on-year change in underlying operating profit
are summarised in the following table:
Central
GBPm Germany Austria Switzerland Poland Europe
2011 89 11 5 (2) 103
Trading (1) 1 1 - 1
Business improvement 14 - - 1 15
FX translation (15) (2) (1) - (18)
-------- -------- ------------ ------- --------
2012 87 10 5 (1) 101
======== ======== ============ ======= ========
Central Europe 2012 2011 Change %
Customers ('000)
Germany(1) 6,425 6,424 Flat
Austria 525 543 -3%
Switzerland(1) 211 149 +42%
Poland 221 166 +33%
------ ------ ---------
Total 7,382 7,282 +1%
====== ====== =========
Revenue (GBPm)
Germany 3,917 4,235 -8%
Austria 308 333 -8%
Switzerland 207 184 +13%
Poland 112 89 +26%
------ ------ ---------
Total 4,544 4,841 -6%
====== ====== =========
Underlying operating profit /
(loss) (GBPm)(2)
Germany 87 89 -2%
Austria 10 11 -9%
Switzerland 5 5 Flat
Poland (1) (2) +50%
------ ------ ---------
Total 101 103 -2%
====== ====== =========
(1) Customer figures for Germany and Switzerland have been
restated for Q1 2011 to reflect redefined product reporting
following the implementation of a new system
(2) Underlying operating profit / (loss) excludes separately
disclosed items, amortisation of business combination intangibles,
acquisition related expenses, impairment of goodwill and available
for sale financial assets and interest and taxation of results of
the Group's joint ventures and associates
Germany
In Germany, underlying operating profit was GBP87m (2011:
GBP89m). This included a GBP15m adverse impact from foreign
currency translation, partly offset by GBP14m of efficiency savings
from the business improvement programme. On a constant currency
basis, the underlying operating profit increased by 30%, despite
absorbing the impact from a turbulent Greek political and economic
situation.
Unique holidays (differentiated and exclusive product combined)
maintained a share of 47% of total holidays in 2012. We launched
several new concept hotels during the year including brands such as
Best Family, Puravida and Sensimar.
Online bookings accounted for 18% of the total in 2012. Whilst
in the Mainstream business online bookings accounted for 4% of
bookings, a new TUI.com website was launched during the year as
part of a strategy to focus on and improve online sales in the
Mainstream business.
The German business delivered GBP14m of efficiency savings
towards the business improvement programme in the year. The savings
related to our GET 2015 programme focusing on cost reduction and
growth and were delivered through back office restructuring.
Other Central European businesses
The other Central European businesses of Austria, Switzerland
and Poland performed largely in line with the prior year. Austria
reported underlying operating profit of GBP10m (2011: GBP11m). An
increase in underlying trading was offset by the adverse impact of
foreign currency translation. In Switzerland, underlying operating
profit was GBP5m, in line with last year (2011: GBP5m). In Poland,
the underlying operating loss was GBP1m (2011: GBP2m loss). The
Polish business delivered GBP1m of business improvement in the
year.
Western Europe
Western Europe reported an underlying operating profit of GBP24m
(2011: GBP17m). The main drivers of the year-on-year change in
underlying operating profit are summarised in the following
table:
Southern Western
GBPm France Netherlands Belgium Europe Europe
2011 (53) 22 50 (2) 17
Trading (6) 1 5 (2) (2)
Business improvement 14 - 8 - 22
FX translation (2) (3) (8) - (13)
------- ------------ -------- --------- --------
2012 (47) 20 55 (4) 24
======= ============ ======== ========= ========
Western Europe 2012 2011 Change %
Customers ('000)
France 1,956 2,057 -5%
Netherlands 1,455 1,360 +7%
Belgium 2,528 2,541 -1%
Southern Europe 128 143 -10%
Total 6,067 6,101 -1%
====== ====== =========
Revenue (GBPm)
France 1,263 1,363 -7%
Netherlands 839 783 +7%
Belgium 840 902 -7%
Southern Europe 89 103 -14%
Total 3,031 3,151 -4%
====== ====== =========
Underlying operating (loss) /
profit (GBPm)(1)
France (47) (53) +11%
Netherlands 20 22 -9%
Belgium 55 50 +10%
Southern Europe (4) (2) -100%
------ ------ ---------
Total 24 17 +41%
====== ====== =========
(1) Underlying operating (loss ) /profit excludes separately
disclosed items, amortisation of business combination intangibles,
acquisition related expenses, impairment of goodwill and available
for sale financial assets and interest and taxation of results of
the Group's joint ventures and associates
France 2012 2011 Change %
Underlying operating loss (GBPm)
(1)
Tour Operator (32) (43) +26%
Airline (15) (10) -50%
----- ----- ---------
(47) (53) +11%
(1) Underlying operating loss excludes separately disclosed
items, amortisation of business combination intangibles,
acquisition related expenses, impairment of goodwill and available
for sale financial assets and interest and taxation of results of
the Group's joint ventures and associates
France
France reported an underlying operating loss of GBP47m (2011:
loss of GBP53m) an improvement of GBP6m versus the prior year. The
decreased loss was driven by an improved performance by the French
tour operators and offset by an increased loss in the airline
Corsair.
The tour operator reported a reduced loss of GBP32m (2011: loss
of GBP43m). The improvement of GBP11m versus the prior year was
driven by the successful delivery of GBP8m of efficiency savings
towards the business improvement programme in the year and stronger
late summer trading. This was partially offset by continued lower
demand for North African destinations. The tour operator is
particularly reliant on these destinations - historically Egypt,
Tunisia and Morocco have made up around 40% of their capacity in
total, and around 65% for Marmara alone. Whilst trading conditions
remain very challenging, we saw demand pick up for both Tunisia and
Morocco, particularly in the later part of the summer season.
Progress to consolidate the businesses of the French tour
operators continues 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 reported a loss of GBP15m (2011: loss of
GBP10m), reflecting the continuing competitive market place, a
reduction in capacity on certain routes and an increase in fuel
prices which could only partially be passed on to the customer.
However, the business improvement programme is progressing as
planned delivering GBP6m of efficiency savings in the year.
Netherlands
The Netherlands delivered underlying operating profit of GBP20m
(2011: GBP22m), reflecting a more challenging market. A number of
new destinations were launched during the year including Western
USA and Zanzibar for our long-haul routes and Venice, Croatia and
Israel in our mid-haul routes.
Belgium
Underlying operating profit in Belgium increased by GBP5m to
GBP55m (2011: GBP50m), despite absorbing an GBP8m adverse FX
impact. The performance reflects a record Winter that saw volumes
increase by 10% and better airline utilisation.
Direct distribution increased by three percentage points during
the period to 62%, whilst sales through the online channel rose by
six percentage points to 43%.
Our Moroccan low cost airline Jet4You was consolidated into the
Belgian business from 1 April 2012. This is a natural fit as
Jet4You is currently owned and operated by the Belgian business and
Jetairfly is our lowest cost airline. This helped drive internal
synergies and the business improvement programme delivered an GBP8m
improvement in the year from Jet4You.
Southern Europe
Southern Europe, which consists of tour operators based in the
Italian and Spanish source markets, reported an underlying
operating loss of GBP4m (2011: loss of GBP2m). This reflects the
heavy reliance on North Africa, much of which was disrupted during
the same period last year.
Emerging Markets
Emerging Markets reported an underlying operating loss of GBP15m
in the year (2011: loss of GBP12m). The result for this sector
reflects our continued investment in brand and distribution in
Russia and the CIS and the continued impact of unrest in Egypt.
During the year, we consolidated our existing businesses into a
single brand (TUI) featuring all destinations, establishing a
strong platform for the future. The sector now has close to 600,000
customers, up 15% on prior year.
Emerging Markets (share of JV) 2012 2011 Change %
Underlying operating loss (GBPm)(1) (15) (12) -25%
------------------------------------- ----- ----- ---------
(1) Underlying operating loss excludes separately disclosed
items, amortisation of business combination intangibles,
acquisition related expenses, impairment of goodwill and available
for sale financial assets and interest and taxation of results of
the Group's joint ventures and associates
We are continuing to evaluate our strategic participation
options in the Chinese and Indian market. In India, our tour
operating and retail business TUI India was re-launched with an
increased focus on targeting the more affluent consumer segments
with a range of new products including family clubs in Goa and
Mauritius, driving controlled distribution more aggressively and a
focus on online with the launch of a re-branded website. In China,
we continue to assess our market participation options and have
been further developing our plans in the outbound segment via TUI
China, our joint venture cooperation with China Travel Service
(CTS).
In the 2012/13 financial year the Emerging Markets sector will
no longer exist. Emerging Markets will be included in the
Mainstream sector but reported separately, while India and China
will sit within and be reported in the Accommodation &
Destinations sector.
Accommodation & Destinations
Accommodation & Destinations (A&D) delivered an
underlying operating profit of GBP66m (2011: GBP72m). This included
an GBP11m investment in Accommodation OTA, a GBP4m adverse impact
of foreign currency translation and a GBP3m impact relating to the
reallocation of costs from the Emerging Markets sector to the
Accommodation & Destinations sector.
The main drivers of the year-on-year change in underlying
operating profit are summarised in the table below:
GBPm Online Accommodation Inbound Accommodation
Services & Destinations
2011 34 38 72
Trading 14 (2) 12
Investment in OTA (11) - (11)
Reallocation of costs - Emerging
Markets - (3) (3)
FX translation (2) (2) (4)
--------------------- ---------- ----------------
2012 35 31 66
===================== ========== ================
Accommodation & Destinations 2012 2011 Change %
Customers ('000)
Accommodation Wholesaler roomnights
(Online) +13%
Accommodation OTA roomnights (Online) +7%
Incoming passenger volumes Flat
Revenue (GBPm) 664 652 +2%
Underlying operating profit (GBPm)(1)
Online Accommodation 35 34 +3%
Inbound Services 31 38 -18%
----- ----- ---------
Total 66 72 -8%
===== ===== =========
(1) Underlying operating profit excludes separately disclosed
items, amortisation of business combination intangibles,
acquisition related expenses, impairment of goodwill and available
for sale financial assets and interest and taxation of results of
the Group's joint ventures and associates
TTV for the Sector increased by 8% to GBP2.8bn (2011: GBP2.6bn).
This was driven by growth in Hotelbeds and Bedsonline in
Accommodation Wholesaler, by LateRooms/AsiaRooms in Accommodation
OTA and by our cruise handling business, Intercruises.
The Accommodation & Destinations Sector divisions will now
be described as follows:
- Online Accommodation: Includes Accommodation Wholesaler and Accommodation OTA.
- Inbound Services: Businesses that provide transfers,
excursions, tours, tailor-made products, cruise handling services
and meetings and events.
Online Accommodation
The Online Accommodation business delivered a GBP1m improvement
in underlying operating profit to GBP35m (2011: GBP34m). The result
included a trading improvement of GBP14m offset by a GBP11m
investment in Accommodation OTA and a GBP2m adverse impact of
foreign currency translation.
Roomnights for the Accommodation Wholesaler increased by 13% due
to strong organic growth from the brands Hotelbeds and Bedsonline,
where the key area of focus remains on international expansion,
particularly in the Americas and Asia. Accommodation Wholesaler TTV
grew by 13% to GBP1.4bn.
Roomnights for Accommodation OTA increased by 7% due to a good
performance from LateRooms and AsiaRooms. Accommodation OTA TTV
grew by 4% to GBP447m, including AsiaRooms growth of 25%. LateRooms
showed year-on-year room night and commission growth partly driven
from offline marketing to drive brand awareness and development of
mobile offering to meet changing consumer channel preferences. The
expansion and roll out of the AsiaRooms brand is on track, with
significant market share gains in both Malaysia and Singapore.
Local language traffic now represents the largest single source of
traffic. We entered the Brazilian market through the acquisition of
MalaPronta.com in September 2012.
Inbound Services
The Inbound Services business delivered underlying operating
profit of GBP31m (2011: GBP38m), reflecting a reallocation of costs
from the Emerging Markets sector to the Accommodation &
Destinations sector and the adverse impact of foreign currency
translation.
Inbound Services remains the market leader in a fragmented
market. We have simplified the way we present ourselves to third
party providers through the launch of the brands Destination
Services and Worldcome. We are also looking at opportunities with
the independent traveller segment of this market.
Incoming passenger volumes were flat over the prior year. In
cruise handling, the number of port calls handled increased by
12%.
Specialist & Activity
Specialist & Activity reported a profit of GBP48m (2011:
GBP65m), down GBP17m, due to declines in the Adventure and
Education divisions partly offset by North American Specialist and
Sport divisions. This included GBP1m adverse impact from foreign
currency translation and GBP2m adverse impact of unrest in the
Middle East and North Africa. The business improvement programme
delivered a GBP1m improvement in the year.
Specialist & Activity 2012 2011 Change %
Customers ('000) 1,586 1,500 +6%
Revenue (GBPm) 1,478 1,372 +8%
Underlying operating profit (GBPm)(1) 48 65 -26%
--------------------------------------- ------ ------ ---------
(1) Underlying operating profit excludes separately disclosed
items, amortisation of business combination intangibles,
acquisition related expenses, impairment of goodwill and available
for sale financial assets and interest and taxation of results of
the Group's joint ventures and associates
Adventure was impacted by the unrest in the Middle East and
North Africa and the reduction in demand to Australia due to the
global financial crisis and a strengthening Australian dollar. The
result also reflected the consolidation of first-half losses from
our strategic venture with Intrepid Travel. Education continued to
be impacted by a reduction in party sizes and demand for gap year
travel due to the downturn in the UK economy and rise in university
tuition fees. The high cost of accommodation in London due to the
2012 Olympics and strength of Sterling also impacted demand in our
language school businesses. We are making progress with the
restructuring of the Education division, as outlined last year, to
reduce back office costs, drive operational efficiencies and have
simplified the management structure.
The North American Specialist division saw an improvement in
underlying operating profit driven by a switch in mix towards
higher margin products offered by operators such as Starquest
(private jet tours) and Quark (polar expeditions) and improved cost
control. The Sport division benefited from the Olympics and the
2012 UEFA European Championships.
Acquisitions & Investments
The Group invested GBP16m in acquisitions in 2012.
In September 2012, the Accommodation & Destinations sector
acquired MalaPronta.com, Brazil's fourth largest accommodation-only
OTA with a strong reputation and brand positioning. MalaPronta.com
has achieved 117% compound annual revenue growth in the past 7
years growing to its current level of more than 130,000 room nights
sold last year. The acquisition of MalaPronta.com is part of the
Accommodation OTA strategy to build its offering and positioning
globally particularly in the emerging markets.
Taxation
Underlying profit before tax for the year was GBP390m. 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 year ended 30 September 2012 is 33%. 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.
The cash tax rate is expected to be lower than the underlying
income tax rate as we utilise our deferred tax assets generated
from restructuring expenditure and trading losses. In the coming
year, we envisage a cash tax rate of approximately 20% of
underlying profit before tax.
Earnings per share
Underlying basic earnings per share was 25.8p (2011: 23.6p).
Basic earnings per share was 12.5p (2011: 7.7p).
Dividends
The Board is recommending a final dividend of 8.3p per share
(2011: 8.0p). On 8 May 2012 the Board recommended an interim
dividend of 3.4p per share (2011: 3.3p), making a full year
dividend of 11.7p per share (2011: 11.3p). The final dividend will
be paid on 10 April 2013 to holders of relevant shares on the
register at 8 March 2013.
The Group's policy is to maintain underlying dividend cover at
around two times. We intend to continue to operate a dividend
re-investment plan as an alternative to receiving a cash
dividend.
Cash and liquidity
The net debt position (cash and cash equivalents less loans,
overdrafts and finance leases) at 30 September 2012 was GBP108m (30
September 2011: net cash of GBP4m). The two main impacts in the
year were advances under finance leases for three aircraft,
totalling GBP83m and FX retranslation effect of GBP70m of net debt
balances in the Eurozone.
This consisted of GBP830m of cash and GBP70m of current
interest-bearing loans and liabilities and GBP868m of non-current
interest-bearing loans and liabilities. As at 30 September 2012,
undrawn committed borrowing facilities totalled GBP1,018m (2011:
GBP1,044m).
Cashflow conversion is 75% of underlying profit before tax,
excluding the net pre-delivery payments on aircraft of GBP53m
(2011: GBP34m). Free cash flow deteriorated by 47% to GBP240m
(2011: GBP451m), analysed as follows:
GBPm 2012 2011
Underlying operating profit 490 471
Depreciation and amortisation included within underlying
operating profit 152 172
------ ------
Underlying EBITDA(1) 642 643
Working capital movement 60 218
Capital expenditure (net of disposals) (262) (162)
Other(2) (200) (248)
------ ------
Free cash flow 240 451
====== ======
(1) Earnings before interest, tax, depreciation and
amortisation
(2) Includes pension funding, tax, interest and cash impact of
separately disclosed items
We remain satisfied with our funding and liquidity position. We
have three main sources of long-term debt funding as at 30 November
2012 - these include the external bank revolving syndicated credit
facilities totalling GBP1,020m which mature in June 2015, a GBP350m
convertible bond (due October 2014) and a GBP400m convertible bond
(due April 2017). The external bank revolving facility is used to
manage the seasonality of the Group's cash flows and liquidity.
Separately disclosed items (SDIs)
Separately disclosed items net to a GBP92m expense in the year
(2011: GBP74m expense). The following table provides a breakdown of
these items:
GBPm 2012 2011
Restructuring costs 102 137
Pension - (63)
Incremental costs caused by volcanic ash disruption
in 2010 - (7)
Other (10) 7
----- -----
Total SDIs 92 74
===== =====
Restructuring costs of GBP102m were incurred in the year. The
largest items by division were as follows:
-- GBP66m in France in relation to the ongoing restructuring of the
tour operator and airline;
-- GBP5m relating to the restructure of the Moroccan airline Jet4You;
-- GBP7m credit in Germany in relation to an unused restructuring provision;
-- GBP24m in the Specialist & Activity and A&D sectors.
The remaining costs related primarily to Group head office
companies.
Further information is included within Note 3.
Consolidated income statement
for the year ended 30 September 2012
Year ended Year ended
30 September 30 September
2012 2011
Note GBPm GBPm
--------------------------------------------------- ------- -------------- --------------
Revenue 2 14,460 14,687
Cost of sales (12,965) (13,351)
Gross profit 1,495 1,336
--------------------------------------------------- ------- -------------- --------------
Administrative expenses (1,199) (1,094)
Share of profits of joint ventures and associates 5 13
Operating profit 301 255
--------------------------------------------------- ------- -------------- --------------
Analysed as:
Underlying operating profit 2 490 471
Separately disclosed items 3 (92) (74)
Predecessor accounting for Magic Life - (17)
Acquisition related expenses (62) (82)
Impairment of goodwill (20) (39)
Impairment of available for sale financial
asset (10) -
Taxation on profits and interest of joint
ventures and associates (5) (4)
301 255
--------------------------------------------------- ------- -------------- --------------
Financial income 4 96 83
Financial expenses 4 (196) (194)
Net financial expenses (100) (111)
--------------------------------------------------- ------- -------------- --------------
Profit before tax 201 144
Taxation charge 6 (64) (57)
Profit for the year 137 87
--------------------------------------------------- ------- -------------- --------------
Attributable to:
Equity holders of the parent 138 85
Non-controlling interests (1) 2
--------------------------------------------------- ------- -------------- --------------
Profit for the year 137 87
--------------------------------------------------- ------- -------------- --------------
Year ended Year ended
30 September 30 September
2012 2011
Pence Pence
------------------------------------------------- -------------- --------------
Basic and diluted earnings per share for profit
attributable to the equity holders of the
Company during the year
Basic earnings per share 9 12.5 7.7
Diluted earnings per share 9 12.3 7.6
Consolidated statement of comprehensive income
for the year ended 30 September 2012
Year ended Year ended
30 September 30 September
2012 2011
GBPm GBPm
------------------------------------------------ -------------- --------------
Profit for the year 137 87
------------------------------------------------ -------------- --------------
Other comprehensive (expense) / income
Foreign exchange translation (160) (18)
Actuarial losses arising in respect of defined
benefit pension schemes (172) (89)
Tax on actuarial losses 32 (7)
Cash flow hedges:
- movement in fair value (42) 85
- amounts recycled to the consolidated income
statement (30) (4)
Tax on cash flow hedges 15 (22)
Available for sale financial assets:
- movement in fair value (4) (2)
- amounts recycled to the consolidated income
statement 10 1
Other comprehensive loss for the year net
of tax (351) (56)
------------------------------------------------ -------------- --------------
Total comprehensive (loss) / income for the
year (214) 31
------------------------------------------------ -------------- --------------
Total comprehensive (loss) / income for the
year
Attributable to:
Equity holders of the parent (211) 26
Non-controlling interests (3) 5
Total (214) 31
------------------------------------------------ -------------- --------------
Consolidated balance sheet
at 30 September 2012
30 September 30 September
2012 2011
GBPm GBPm
---------------------------------------------- ------------- -------------
Non-current assets
Intangible assets 4,482 4,642
Property, plant and equipment 1,096 1,001
Investments in joint ventures and associates 258 242
Other investments 66 72
Trade and other receivables 225 202
Retirement benefit asset - 1
Derivative financial instruments 21 30
Deferred tax assets 125 138
6,273 6,328
---------------------------------------------- ------------- -------------
Current assets
Inventories 61 69
Other investments 19 22
Trade and other receivables 1,312 1,472
Income tax recoverable 15 62
Derivative financial instruments 98 185
Cash and cash equivalents 830 902
Assets classified as held for sale 13 13
2,348 2,725
---------------------------------------------- ------------- -------------
Total assets 8,621 9,053
---------------------------------------------- ------------- -------------
Current liabilities
Interest-bearing loans and borrowings (70) (96)
Retirement benefits (2) (3)
Derivative financial instruments (125) (133)
Trade and other payables (4,549) (4,622)
Provisions for liabilities (300) (317)
Income tax payable (39) (133)
(5,085) (5,304)
---------------------------------------------- ------------- -------------
Non-current liabilities
Interest-bearing loans and borrowings (868) (802)
Retirement benefits (646) (511)
Derivative financial instruments (20) (18)
Trade and other payables (48) (56)
Provisions for liabilities (316) (353)
Deferred tax liabilities (29) (71)
(1,927) (1,811)
---------------------------------------------- ------------- -------------
Total liabilities (7,012) (7,115)
---------------------------------------------- ------------- -------------
Net assets 1,609 1,938
---------------------------------------------- ------------- -------------
Equity
Called up share capital 112 112
Convertible bond reserve 88 85
Other reserves 2,627 2,846
Accumulated losses (1,262) (1,155)
---------------------------------------------- ------------- -------------
Total equity attributable to equity
holders of the parent 1,565 1,888
Non-controlling interests 44 50
---------------------------------------------- ------------- -------------
Total equity 1,609 1,938
---------------------------------------------- ------------- -------------
The financial statements were approved by a duly authorised
Committee of the Board of Directors on 3 December 2012 and signed
on its behalf by:
Peter J Long William H Waggott
Chief Executive Chief Financial Officer
Company number: 6072876
Consolidated statement of changes in equity
Other reserves
---------------------------------
Called Equity
up Convertible holders Non-
share bond Merger Translation Hedging Accumulated of Controlling Total
capital reserve reserve reserve reserve losses parent Interests Equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
-------------------- -------- ------------ -------- ------------ --------- ------------ -------- ------------ -------
At 1 October 2010 112 83 2,521 292 (19) (1,014) 1,975 1 1,976
-------------------- -------- ------------ -------- ------------ --------- ------------ -------- ------------ -------
Profit for the
year - - - - - 85 85 2 87
Other comprehensive
(loss) / income
for the year - - - (3) 56 (112) (59) 3 (56)
Total comprehensive
(loss) / income
for the year - - - (3) 56 (27) 26 5 31
-------------------- -------- ------------ -------- ------------ --------- ------------ -------- ------------ -------
Transactions
with owners
Share-based payment
- charge for the
year - - - - - 19 19 - 19
Acquisition of
shares by Employee
Benefit Trust - - - - - (7) (7) - (7)
Dividends - - - - - (122) (122) (2) (124)
Capital increase
in Magic Life - - 2 - - - 2 - 2
Disposals to
non-controlling
interests - - - (3) - (4) (7) 46 39
Change in deferred
tax rate on equity
portion of
convertible
bond - 2 - - - - 2 - 2
At 30 September
2011 112 85 2,523 286 37 (1,155) 1,888 50 1,938
-------------------- -------- ------------ -------- ------------ --------- ------------ -------- ------------ -------
Other reserves
---------------------------------
Called Equity
up Convertible holders Non-
share bond Merger Translation Hedging Accumulated of controlling Total
capital reserve reserve reserve reserve losses parent interests equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
-------------------- -------- ------------ -------- ------------ --------- ------------ -------- ------------ --------
At 1 October 2011 112 85 2,523 286 37 (1,155) 1,888 50 1,938
-------------------- -------- ------------ -------- ------------ --------- ------------ -------- ------------ --------
Profit for the
year - - - - - 138 138 (1) 137
Other comprehensive
loss for the year - - - (157) (62) (130) (349) (2) (351)
Total comprehensive
(loss) / income
for the year - - - (157) (62) 8 (211) (3) (214)
-------------------- -------- ------------ -------- ------------ --------- ------------ -------- ------------ --------
Transactions
with
owners
Share-based payment
- charge for the
year - - - - - 16 16 - 16
Share-based payment
- disposal on
award of shares - - - - - (5) (5) - (5)
Dividends - - - - - (125) (125) (3) (128)
Acquisition of
non-controlling
interests - - - - - (1) (1) - (1)
Change in deferred
tax rate on equity
portion of
convertible
bond - 3 - -- - - 3 - 3
At 30 September
2012 112 88 2,523 129 (25) (1,262) 1,565 44 1,609
-------------------- -------- ------------ -------- ------------ --------- ------------ -------- ------------ --------
Consolidated statement of cash flows
for the year ended 30 September 2012
Year ended Year ended
30 September 30 September
2012 2011
Note GBPm GBPm
----------------------------------------------------- ----- -------------- --------------
Profit for the year 137 87
Adjustment for:
Depreciation and amortisation 219 238
Impairment of intangible assets and property,
plant and equipment 22 30
Impairment of goodwill 20 39
Equity-settled share-based payment expenses 16 19
(Profit) / loss on sale of property, plant
and equipment (9) 6
Share of profit of joint ventures and associates (5) (13)
Loss on foreign exchange 14 38
Impairment of available for sale financial
asset 10 -
Dividends received from joint ventures and
associates 4 7
Pension curtailment gain recognised in consolidated
income statement (1) (64)
Financial income 4 (96) (83)
Financial expenses 4 196 194
Taxation 64 57
Operating cash flow before changes in working
capital and provisions 591 555
Decrease / (increase) in inventories 17 (9)
Increase in trade and other receivables (55) (68)
Increase in trade and other payables 126 140
(Decrease) / increase in provisions and retirement
benefits (35) 125
----------------------------------------------------- ----- -------------- --------------
Cash flows generated from operations 644 743
Interest paid (75) (86)
Interest received 15 9
Income taxes paid (82) (53)
Cash flows generated from operating activities 502 613
----------------------------------------------------- ----- -------------- --------------
Investing activities
Proceeds from sale of property, plant and
equipment 116 148
Acquisition of subsidiaries net of cash acquired (23) (33)
Proceeds from other investments 1 3
Investment in joint ventures, associates and
other investments (25) (18)
Acquisition of property, plant and equipment (287) (257)
Acquisition of intangible assets (91) (56)
Cash flows used in investing activities (309) (213)
----------------------------------------------------- ----- -------------- --------------
Financing activities
Proceeds from new loans and deposits taken 14 26
Repayment of borrowings (43) (556)
Repayment of finance lease liabilities (19) (145)
Dividends paid to ordinary and non-controlling
interests (128) (124)
Shares purchased by Employee Benefit Trust - (7)
Cash flows used in financing activities (176) (806)
----------------------------------------------------- ----- -------------- --------------
Net increase / (decrease) in cash and cash
equivalents 17 (406)
Cash and cash equivalents at start of the
year 902 1,304
Effect of foreign exchange on cash held (89) 4
Cash and cash equivalents at end of the year 830 902
----------------------------------------------------- ----- -------------- --------------
Movements in cash and net debt are presented in Note 8.
Notes to the consolidated financial statements
1. Basis of preparation
(A) Statutory accounts
The financial information set out above does not constitute the
Group's statutory accounts for the year ended 30 September 2012.
Financial Statements for the year ended 30 September 2012 will be
delivered to the registrar of companies in due course.
PricewaterhouseCoopers LLP has reported on these accounts and their
report was (i) unqualified, (ii) did not include a reference to any
other matters to which the auditors drew attention by way of
emphasis without qualifying their report and (iii) did not contain
a statement under section 498(2) or (3) of the Companies Act
2006.
(B) Accounting policies
The accounting policies applied by the Group in its consolidated
financial statements for the year ended 30 September 2012 are in
accordance with International Financial Reporting Standards and
IFRIC interpretations as adopted by the European Union (Adopted
IFRSs) and the Companies Act 2006 applicable to companies reporting
under IFRS. The accounting policies are consistent with those of
the consolidated financial statements for the year ended 30
September 2011 with the exception of the adoption of the following
amended International Financial Reporting Standards (IFRS) and
Interpretations that are applicable for the year ended 30 September
2012:
-- IAS 24 (revised) 'Related party disclosures'
-- Amendment to IFRS 7 'Financial instruments: Transfers of financial assets'
-- Amendment to IFRIC 14 'Prepayments of a minimum funding requirement'
-- Annual improvements project (2010) (partly applicable for the year ended 30 September 2012)
These amended standards and interpretations have no significant
impact on the consolidated results or financial position of the
Group, but may impact certain disclosures.
(C) Underlying measures of profits and losses
The Group believes that underlying operating profit, underlying
profit before tax and underlying earnings per share provide
additional guidance to statutory measures to help understand the
underlying performance of the business during the financial year.
The term underlying is not defined under IFRS. 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 IFRS GAAP measures. The Group defines these underlying
measures as follows:
Underlying operating profit is operating profit from continuing
operations stated before separately disclosed items, the impact of
predecessor accounting, acquisition related expenses, impairment of
goodwill and available for sale financial assets and interest and
taxation on the Group's share of the results of joint ventures and
associates.
Underlying profit before tax is profit 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 available for sale
financial assets, interest and taxation of joint ventures and
associates and separately disclosed items included within the
operating result.
Underlying earnings used in the calculation of underlying
earnings per share is profit after tax from continuing operations
excluding the impact of predecessor accounting, acquisition related
expenses, impairment of goodwill and available for sale financial
assets and separately disclosed items included within the operating
result. 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 and
available for sale financial asset impairment charges and
separately disclosable tax items.
It should be noted that the definitions of underlying items
being used in these consolidated 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.
(D) Funding and liquidity
The Board remains satisfied with the Group's funding and
liquidity position. At 30 September 2012, the main sources of debt
funding included:
-- A total of GBP970m syndicated bank revolving credit facilities which mature in June 2015;
-- GBP186m of drawn finance lease obligations with repayments up to March 2022;
-- GBP350m convertible bond due October 2014; and
-- GBP400m convertible bond due April 2017.
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 well within the covenant
limits at the date of the balance sheet. Forecasts reviewed by the
Board, including forecasts adjusted for significantly worse
economic conditions, show continued compliance with these
covenants. For both covenants, earnings are calculated on an
underlying basis as described above.
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. Segmental information
IFRS 8 requires segmental information to be presented on the
same basis as that used for internal management reporting.
Segmental information is reported by the Group's business sectors
to the Group Management Board (GMB). The GMB consists of tour
operating and functional experts drawn from across the Group who
execute TUI Travel's day-to-day operations, allocate resources to
and assess the performance of the operating segments. Consequently,
the GMB is considered to be the chief operating decision maker for
the purposes of IFRS 8.
Group structure
The Group presents segmental information in respect of its four
Sectors. For the year ended 30 September 2012, the four Sectors are
divided into either Regions (Mainstream Sector) or divisions
(Sectors other than Mainstream), which are further sub-divided into
operating segments. Aggregation criteria is then used to combine
certain of these operating segments into reported segments.
The Mainstream Sector consists of three Regions: Northern,
Central Europe and Western Europe. The Northern Region comprises
the distribution, tour operating and airline businesses in the UK
& Ireland, Canada, the Nordic Countries (comprising the markets
of Sweden, Norway, Denmark and Finland) and the Hotels division
comprising hotel management companies and joint ventures in hotel
assets.
Central Europe comprises the distribution, tour operating
businesses and an airline in the source markets of Germany,
Austria, Switzerland and Poland.
Western Europe comprises the distribution, tour operating and
airline businesses in France, Belgium, the Netherlands and Southern
Europe (comprising Spain and Italy). The Moroccan based airline,
Jet4You, has been integrated into Belgium during the year, with
internal reporting to the GMB being amended to reflect this
change.
Each source market within each Region represents an operating
segment, for the purposes of segmental information.
The Specialist & Activity Sector operates under seven
divisions: Adventure, Education, Languages, Marine, North American
Specialist, Sport and Specialist Holidays Group. The Sector has
over 100 international specialist and activity brands delivering a
range of unique customer experiences. The Specialist & Activity
Sector is considered to be one operating segment, in line with
internal management reporting.
The Accommodation & Destinations Sector (A&D) sells and
provides a range of services in destinations to tour operators,
travel agents, corporate clients and direct to the consumer
worldwide. A&D is structured along the following divisions:
Accommodation Wholesaler (previously known as Business to Business
(B2B)), Accommodation OTA (previously known as Business to Customer
(B2C)) and Specialist, although the A&D Sector in total is
considered as one operating segment, in line with internal
management reporting.
The Emerging Markets Sector is a growing portfolio of travel
businesses, currently focusing on the specific source markets of
Russia and Ukraine and is considered to be one operating
segment.
Reportable and reported segments
Under IFRS 8, the results of the UK & Ireland and Germany
are reported separately within the Northern Region and Central
Europe respectively due to the size and importance of these core
markets and both meeting the threshold of being individual
reportable segments. The results of Nordics are shown separately
from other Northern Region segments as it exceeds the quantitative
threshold defined in IFRS 8. Canada and the Hotels division have
been reported separately as these two segments do not meet the
majority of the aggregation criteria of IFRS 8.
The results of Austria, Switzerland and Poland have been
aggregated into the Rest of Central Europe segment as these are
considered to be economically similar over the long term and their
activities are also considered to be similar in nature under the
aggregation criteria of IFRS 8.
The French Airline, Corsair, has been separately disclosed from
the Rest of Western Europe because, as a scheduled airline within
the Group, it has a different business model to the rest of the
Group's integrated tour operators. Following the integration of
Jet4You into Belgium during the year, the results of Jet4You are
now included within those of Belgium. Belgium, the Netherlands,
Southern Europe and the French tour operating businesses form the
Rest of Western Europe as these segments meet the aggregation
criteria.
The Specialist & Activity Sector is reported separately as
this qualifies as a reportable segment under IFRS 8. The results of
Accommodation & Destinations and Emerging Market Sectors are
reported voluntarily to be consistent with internal management
reporting.
Segmental information for both the current and prior year has
been presented using this structure, with the prior year
information being restated to reflect the inclusion of Jet4You into
Belgium.
Corporate costs are in respect of central costs including
finance, human resources, legal, facility costs and some
information technology costs that do not relate to each business
segment and hence they are not allocated.
Information regarding the results of each reportable segment is
provided below. Segmental performance is evaluated based on
underlying operating profit and is measured consistently with
underlying operating profit or loss in the consolidated financial
statements and as defined in Note 1(C).
Intersegmental sales and transfers reflect arm's length prices
as if sold or transferred to third parties. Financial income and
expenses are not allocated to the reportable segments as this
activity is managed by the Group's treasury function which manages
the overall net debt position of the Group.
Segmental analysis
Year ended 30 September 2012
Underlying
Total Operating
Intersegmental external profit
Total revenue revenue revenue / (loss)
Sector GBPm GBPm GBPm GBPm
------------------------------------ -------------- --------------- ---------- -----------
UK & Ireland 3,756 (122) 3,634 197
Canada - - - 21
Nordics 1,085 (1) 1,084 71
Hotels 191 (166) 25 6
------------------------------------ -------------- --------------- ---------- -----------
Total Northern Region 5,032 (289) 4,743 295
------------------------------------ -------------- --------------- ---------- -----------
Germany 3,932 (15) 3,917 87
Rest of Central Europe 670 (43) 627 14
------------------------------------ -------------- --------------- ---------- -----------
Total Central Europe 4,602 (58) 4,544 101
------------------------------------ -------------- --------------- ---------- -----------
French Airline 403 (43) 360 (15)
Rest of Western Europe 2,702 (31) 2,671 39
------------------------------------ -------------- --------------- ---------- -----------
Total Western Europe 3,105 (74) 3,031 24
Total Mainstream 12,739 (421) 12,318 420
------------------------------------ -------------- --------------- ---------- -----------
Specialist & Activity 1,479 (1) 1,478 48
Accommodation & Destinations 859 (195) 664 66
Emerging Markets - - - (15)
All other segments and unallocated
items - - - (29)
Total Group 15,077 (617) 14,460 490
------------------------------------ -------------- --------------- ---------- -----------
Segmental analysis
Year ended 30 September 2011
Underlying
Total operating
Intersegmental 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)
Rest of Western Europe 2,805 (10) 2,795 27
------------------------------------ ---------------- ----------------- ----------- -----------
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 Group underlying operating profit to profit
before tax
Year ended Year ended
30 September 30 September
2012 2011
Note GBPm GBPm
-------------------------------------------- ----- ------------------ ---------------
Group underlying operating profit 490 471
Separately disclosed items 3 (92) (74)
Predecessor accounting for Magic Life - (17)
Acquisition related expenses (62) (82)
Impairment of goodwill (20) (39)
Impairment of available for sale financial (10) -
asset
Taxation on profits and interest of joint
ventures and associates (5) (4)
-------------------------------------------- ----- ------------------ ---------------
Operating profit 301 255
Net financial expenses 4 (100) (111)
-------------------------------------------- ----- ------------------ ---------------
Profit before tax 201 144
-------------------------------------------- ----- ------------------ ---------------
3. Separately disclosed items
Year ended Year ended
30 September 30 September
2012 2011
GBPm GBPm
----------------------------------------------------- --------------- ---------------
Restructuring and other separately disclosed items 102 137
Pension related credit - (63)
Litigation provisions 17 -
Change in accounting estimates (27) -
Items relating to the prior year - 7
----------------------------------------------------- --------------- ---------------
Total pre-volcanic ash 92 81
Incremental costs caused by volcanic ash disruption - (7)
Total 92 74
----------------------------------------------------- --------------- ---------------
Separately disclosed items within operating profit are included
within the consolidated income statement as follows:
Year ended Year ended
30 September 30 September
2012 2011
GBPm GBPm
------------------------- --------------- ---------------
Cost of sales - (6)
Administrative expenses 92 80
Total 92 74
------------------------- --------------- ---------------
Restructuring and other separately disclosed items
Mainstream restructuring costs account for GBP66m of the total
incurred in the year ended 30 September 2012 and principally relate
to: the restructuring programme in France where a single tour
operating business, TUI France, is being created and the airline is
also being restructured (GBP66m in total); the restructure of the
Moroccan airline Jet4You (GBP5m); offset by a release of GBP7m of
unused provision now that the German tour operator restructuring
programme has been completed.
In addition there has been a total of GBP24m restructuring costs
incurred across the Specialist & Activity and Accommodation
& Destinations Sectors. GBP8m of this total has arisen from
restructuring actions taken in the Adventure division; GBP6m has
arisen from the write-down of specific ski chalet assets which are
now being actively marketed for disposal and where transactions are
expected to complete within 12 months; GBP4m has arisen from
actions taken in the Marine division and GBP3m from the
finalisation of restructuring programmes in Greece, Morocco and
Tunisia. A total of GBP12m of costs have been incurred in Group
head office companies, being primarily to support the various
restructuring programmes around the Group.
Included in the year ended 30 September 2011 were Mainstream
restructuring costs of GBP97m which principally related to a
substantial programme to reduce costs and improve efficiencies in
the German business (GBP32m); the ongoing restructure of Corsair,
the scheduled French airline, and the retail network of Nouvelles
Frontières in France (GBP35m in total); and further restructuring
initiatives in the UK (GBP19m) including rationalising the retail
distribution network. In addition there was GBP15m of restructuring
costs incurred in the Specialist & Activity Sector, GBP8m in
the Accommodation & Destinations Sector and GBP17m of
restructuring costs incurred in Group head office companies.
Litigation provisions
At the year end the Group has continued to assess the likely
outcome of the legal actions it is involved in and, in accordance
with IAS 37, has recognised provisions where it is more likely than
not that an outflow of resources will be required to settle the
obligation. Due to the increasingly litigious environment the Group
operates in, this year the process has resulted in a charge to the
income statement of GBP17m which due to its size has been included
as a separately disclosed item.
Change in accounting estimates
During the year ended 30 September 2012, the Group reviewed the
estimates used in calculating aircraft maintenance provisions and
empty leg provisions to ensure consistency of application of the
latest estimates across the Group. This process resulted in a
credit to the income statement of GBP27m, which due to its size has
been included as a separately disclosed item.
Pension related credit
In the year ended 30 September 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 was recognised fully in the income
statement in the period in which it occurred. Therefore a GBP63m
credit was included in the consolidated income statement in
relation to this curtailment, which was included as a separately
disclosed item.
Items relating to the prior year
During the year ended 30 September 2011, two errors were
identified which related to the balance sheet as at 30 September
2010. The omission of an elimination of surplus sundry payables
from the Group balance sheet resulted in an overstatement of
current liabilities of GBP38m. This was offset by an understatement
of current liabilities within Nouvelles Frontières, the French tour
operator, of GBP45m. As both errors offset within cost of sales and
trade and other payables and did not materially change the profit,
net assets or overall financial position of the Group, the
correction of the errors was made through the profit and loss
account in the year ended 30 September 2011.
Impact of volcanic ash
Included previously in separately disclosed items were the
incremental direct costs incurred by the Group in respect of
welfare costs to look after the customers who were affected by the
closure of European airspace in April 2010. These costs principally
included hotel costs for stranded inbound and outbound customers
and the cost of repatriation of inbound customers. In the year
ended 30 September 2011, there was a release of GBP7m of unused
accruals as costs in relation to the disruption in 2010 were
finalised with third party suppliers.
4. Net financial expenses
Year ended Year ended
30 September 30 September
2012 2011
GBPm GBPm
-------------------------------------------------- -------------- --------------
Financial income
Bank interest receivable 15 10
Interest on pension scheme assets 72 73
Other financial income 9 -
Total 96 83
-------------------------------------------------- -------------- --------------
Financial expenses
Bank interest payable on loans and overdrafts (19) (11)
Finance charges on convertible bond (62) (62)
Interest on pension scheme liabilities (86) (84)
Interest payable in respect of loans from parent (2) (4)
Finance lease charges (7) (10)
Unwinding of discount on provisions (8) (11)
Other financial expenses (12) (12)
-------------- --------------
Total (196) (194)
--------------------------------------------------
Net financial expenses (100) (111)
-------------------------------------------------- -------------- --------------
5. Income and expenses
Year ended Year ended
30 September 30 September
2012 2011
GBPm GBPm
---------------------------------------------------------- -------------- --------------
Included within operating profit in the consolidated
income statement for the year are the following
(credits) / charges:
Operating lease income: aircraft (47) (54)
Operating lease income: land and buildings (2) (4)
Operating lease rentals: land and buildings 194 198
Operating lease rentals: aircraft and other equipment 425 460
Depreciation of property, plant and equipment 127 137
Amortisation of intangible assets: business combination
intangibles 59 66
Amortisation of intangible assets: other intangibles 33 35
Charge for share-based payments 16 20
(Profit) / loss on sale of property, plant and equipment (9) 6
Loss on foreign currency retranslation 14 38
Impairment of goodwill and other intangibles 30 51
Impairment of property, plant and equipment 12 18
---------------------------------------------------------- -------------- --------------
6. Taxation
Analysis of charge in the year
The tax charge can be summarised as follows:
Year ended Year ended
30 September 30 September
2012 2011
GBPm GBPm
---------------------------------------------------- -------------- --------------
Current tax charge
UK corporation tax on profit / loss for the
year - 24
Non-UK tax on profit / loss for the year 70 50
Adjustments in respect of previous years (42) (3)
---------------------------------------------------- -------------- --------------
28 71
---------------------------------------------------- -------------- --------------
Deferred tax charge / (credit)
Origination and reversal of temporary differences:
Current year UK 21 (40)
Current year non-UK 9 41
Changes in tax rates 11 14
Adjustments in respect of previous years (5) (29)
---------------------------------------------------- -------------- --------------
36 (14)
---------------------------------------------------- -------------- --------------
Total income tax charge in consolidated income
statement 64 57
---------------------------------------------------- -------------- --------------
Following a review of the local tax positions in a number of the
Group's major operating jurisdictions during the year, certain tax
balances have been adjusted to reflect the position of the latest
local statutory accounts and tax returns. These adjustments in
respect of prior years have been reflected in the current year
income statement tax charge.
7. Dividends
The following dividends which relate to ordinary shares have
been deducted from equity in the year:
Year ended Year ended
Pence 30 September 30 September
per 2012 2011
share GBPm GBPm
----------------------------------------- ------- -------------- --------------
Dividends relating to the year ended 30
September 2010
Interim dividend (paid October 2010) 3.2 - 36
Final dividend (paid April 2011) 7.8 - 86
----------------------------------------- ------- -------------- --------------
11.0 - 122
----------------------------------------- ------- -------------- --------------
Dividends relating to the year ended 30
September 2011
Interim dividend (paid October 2011) 3.3 36 -
Final dividend (paid April 2012) 8.0 89 -
----------------------------------------- ------- -------------- --------------
11.3 125 -
----------------------------------------- ------- -------------- --------------
The interim dividend in respect of the year ended 30 September
2012 of 3.4p per share was paid on 3 October 2012 and this dividend
of GBP38m will be recognised as a deduction from equity in the year
ending 30 September 2013.
Subsequent to the balance sheet date, the Directors have
proposed a final dividend of 8.3p per share (2011: final dividend
of 8.0p per share) payable on 10 April 2013 to the holders of
relevant shares on the register at 8 March 2013. The final proposed
dividend amounts to GBP92m and will, after approval by
shareholders, be recognised in the consolidated financial
statements for the year ending 30 September 2013. The final
ordinary dividend of 8.3p per share, together with the interim
dividend of 3.4p per share, makes a total dividend of 11.7p per
share relating to the year ended 30 September 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 final dividend, may do
so by contacting Equiniti directly on 0871 384 2030 or via the
overseas helpline on +44 121 415 7047. The last day for election
for the final proposed dividend is 25 March 2013 and any requests
should be made in good time ahead of that date.
8. Movements in cash and net debt
Amounts
Cash due to Other
and cash Convertible related Bank Loan Finance financial
equivalents bonds parties loans 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 (406) - 530 5 1 145 (6) 269
Non-cash movement - (21) - - - (7) (1) (29)
Foreign exchange 4 - 9 1 - (1) - 13
------------------- ------------- ------------ ---------- ------- ------- -------- ------------- ------
At 30 September
2011 902 (654) (36) (30) (1) (132) (45) 4
Cash movement 17 - 23 5 - 19 1 65
Non-cash movement - (21) - - - (83) (3) (107)
Foreign exchange (89) - 3 2 - 10 4 (70)
At 30 September
2012 830 (675) (10) (23) (1) (186) (43) (108)
------------------- ------------- ------------ ---------- ------- ------- -------- ------------- ------
9. Earnings per share
The basic 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 year,
excluding those held in the Employee Benefit Trusts. The diluted
earnings per share is calculated on the result attributable to
ordinary shareholders divided by the adjusted potential weighted
average number of ordinary shares, which takes account of the
outstanding share awards and the impact of the conversion of the
convertible bonds, where their conversion is dilutive. The
additional underlying earnings per share measures have been
presented to provide the reader of the accounts with a better
understanding of the results.
Basic and diluted earnings per share are as follows:
Weighted Weighted
average Earnings average Earnings
Earnings no. per share Earnings no. per share
2012 of shares 2012 2011 of shares 2011
GBPm 2012 Pence GBPm 2011 Pence
Millions Millions
---------------------- ----------- ------------ ------------ ----------- ------------ ------------
Basic earnings per
share 138 1,108 12.5 85 1,107 7.7
------------ ------------
Effect of dilutive
options - 10 - 11
---------------------- ----------- ------------ ------------ ----------- ------------ ------------
Diluted earnings per
share 138 1,118 12.3 85 1,118 7.6
---------------------- ----------- ------------ ------------ ----------- ------------ ------------
For the statutory measure of diluted earnings per share, the
effects of including the convertible bonds are anti-dilutive in
both years and therefore this is not included within the
calculation.
Alternative measures of earnings per share
Weighted Weighted
average Earnings average Earnings
no. per Earnings no. per
Earnings of shares share 2011 of shares share
2012 2012 2012 GBPm 2011 2011
GBPm Millions Pence Millions Pence
------------------------------ ----------- ----------- ----------- ----------- ----------- -----------
Basic earnings per share 138 1,108 12.5 85 1,107 7.7
------------------------------ ----------- ----------- ----------- ----------- ----------- -----------
Acquisition related expenses
and impairments 92 - 121 -
Predecessor accounting
for Magic Life - - 17 -
Separately disclosed items 92 - 74 -
Tax base difference (36) - (36) -
------------------------------ ----------- ----------- ----------- ----------- ----------- -----------
Basic underlying earnings
per share 286 1,108 25.8 261 1,107 23.6
Effect of dilutive options - 10 - 11
Effect of convertible
bond (net of tax) 47 205 45 205
Diluted underlying earnings
per share 333 1,323 25.2 306 1,323 23.1
------------------------------ ----------- ----------- ----------- ----------- ----------- -----------
The tax base difference primarily represents the difference
between the actual charge in the consolidated income statement and
the Group's underlying tax charge, as disclosed in Note 6. The
dilutive effect of the convertible bonds is included solely to
calculate diluted underlying earnings per share.
Reconciliation of profit for the year from continuing operations
attributable to ordinary shareholders from continuing
operations
Year ended Year ended
30 September 30 September
2012 2011
GBPm GBPm
--------------------------------------------------- --------------- ---------------
Profit attributable to ordinary shareholders from
continuing operations 138 85
Result attributable to non-controlling interests
from continuing operations (1) 2
Profit for the year from continuing operations 137 87
--------------------------------------------------- --------------- ---------------
Non-GAAP measure
Reconciliation of underlying operating profit to underlying
earnings
Year ended Year ended
30 September 30 September
2012 2011
Note GBPm GBPm
------------------------------------------- ----- -------------- ---------------
Underlying operating profit 490 471
Net underlying financial expenses 4 (100) (111)
Underlying profit before tax 390 360
Underlying tax charge at 27% (2011: 27%) (105) (97)
Underlying profit for the year 285 263
Attributable to ordinary shareholders 286 261
Attributable to non-controlling interests (1) 2
Underlying profit for the year 285 263
------------------------------------------- ----- -------------- ---------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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