Trading update
04 Oktober 2010 - 8:00AM
UK Regulatory
TIDMWEST
RNS Number : 7622T
Western & Oriental plc
04 October 2010
Western & Oriental plc
Trading update
Western & Oriental plc (AIM: WEST), the specialist and luxury travel group,
today announces a trading update following the close of its financial year on 30
September 2010.
Summary:
- Unprecedented effect of ash cloud means group will be behind market
expectations at EBITDA level;
- Negative financial impact of the ash cloud expected to be c. GBP1.8m;
- Much improved forward order book (GBP21.0m compared with GBP18.5m at 30
September 2009);
- Improved trading conditions and EBITDA performance expected in the new
financial year;
- Outcome of strategic review to be known before calendar year end.
Trading update
Despite continuing challenging conditions due to a number of external factors
faced by the business during 2010, such as the ash cloud, airline strikes and
lengthy political unrest in Thailand, the board is pleased with the overall
performance of the business. However due to the unprecedented effect on trading
caused by the ash cloud, the board expects that the group will be behind market
expectations at EBITDA level for the financial year to 30 September 2010.
Effect of the ash cloud
As announced previously, the group reconfirms that the material effects of the
volcanic ash disruption in April 2010 will be shown in the September 2010
results separately. Those effects fall into four main areas, namely:
a. the costs of repatriating and supporting customers who were overseas
during the period of the volcanic ash disruption when the skies were closed to
all commercial aircraft;
b. cancelled bookings due to the volcanic ash;
c. lost sales where customers changed their normal booking patterns for an
extended period; and
d. the gross margin reductions brought about by the need to stimulate sales
and to be competitive under extreme trading conditions. Customers were looking
for material price reductions in a market which was far more competitive than
normal.
Management currently estimate that the negative financial impact on the group's
results relating to the disruption caused by volcanic ash as summarised above
will be approximately GBP1.8 million. We note that the above effects are
consistent with announcements made by other public companies concerning the
effects of the Icelandic problems on the travel sector.
Forward order book
During the first 6 months of the 2010 financial year, booked sales in the Travel
Division were significantly ahead of expectations, although sales slowed
significantly in the second half as a result of external factors outlined above.
That situation is now improving on a weekly basis. We also expect that sales
will improve as a result of the new unified W&O Travel branding.
Following a slow start to the year, sales within W&O Events have improved across
a number of sectors, particularly in its specialist pharmaceutical sector.
The group will move into the new financial year with a much improved forward
order book across both its Divisions. The forward order book amounts to
approximately GBP21.0 million compared to GBP18.5 million at 30 September 2009,
a growth of over 13 per cent. year-on-year.
Outlook
Following the difficulties faced in the second half of the year, trading has
started to return to more normalised levels in the W&O Travel Division, albeit
that margins have remained under pressure. With an improved economic outlook,
the W&O Events Division has seen increased confidence in both enquires and
bookings in recent weeks across all sectors.
Whilst economic recovery must still be viewed with some caution, the group moves
into the new financial year with a forward order book which is over 13 per cent.
ahead when compared with 12 months ago and the board is anticipating improved
trading conditions and EBITDA performance in the next financial year.
Trading conditions during the first 6 months, coupled with the share price
performance over recent months, has caused the board to conduct a strategic
review of the group's Travel Division in order to maximise shareholder value.
The outcome of this review will be known before the end of the calendar year.
David Howell
Chairman
Enquiries:
+-------------------------------+-------------------------------+
| Western & Oriental plc | |
+-------------------------------+-------------------------------+
| David Howell, Chairman | 020 7821 4078 |
+-------------------------------+-------------------------------+
| | |
+-------------------------------+-------------------------------+
| Collins Stewart | |
+-------------------------------+-------------------------------+
| Adrian Hadden | 020 7523 8353 |
+-------------------------------+-------------------------------+
| | |
+-------------------------------+-------------------------------+
| Walbrook PR | |
+-------------------------------+-------------------------------+
| Paul McManus | 020 7933 8787 or 07980 541 |
| | 893 |
+-------------------------------+-------------------------------+
| | paul.mcmanus@walbrookpr.com |
+-------------------------------+-------------------------------+
About Western & Oriental plc
Western & Oriental is a specialist luxury travel group with a number of
established high quality brands. The company was admitted to trading on AIM
under the ticker symbol WEST in March 2006. The Group acts as a tour operator,
travel agent and conference and incentive organisers, offering a premium service
for tailor-made and specialist packaged holiday programmes to destinations
worldwide.
For more information on Western & Oriental and its individual luxury travel
brand websites, go to www.westernorientalplc.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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