RNS Number:6746R
World Travel Holdings PLC
28 September 2000
World Travel Holdings plc
2000 Second Quarter Results
World Travel Holdings plc ("WTH" or "the Group"), the travel technology and
services business, today announces its maiden trading results for the quarter
to 30 June 2000.
The company was recently demerged from business development group Culver
Holdings plc and admitted to trading on AIM in mid September.
All trading figures relate to WTH's consumer business worldtraveldirect and
have previously been commented on in the AIM admission document distributed to
shareholders on 1 September 2000. As was stated in the Prospectus, the
management expected the Group to make a loss and to have negative cash flow
during this period as it invests in the development of its businesses. These
Q2 results are in line with management's expectations.
The Business
WTH distributes travel products and services over the internet on a global
basis through a variety of channels using the Group's proven Powerflyerr
technology platform. WTH targets three distinct markets through separately
branded channels of delivery:
* the travel agent through Fare 1;
* the direct booking leisure consumer through worldtraveldirect.com; and
* the corporate travel customer through Trident.
As stated in the Group's Prospectus, the gross funds of #11.55m raised at
flotation will be primarily used for the development of Fare 1, as WTH has
identified the travel agent market as that with the most short-term growth
potential.
The Q2 results represent the performance of WTH's consumer business,
worldtraveldirect, as this was the most developed part of the Group's business
at the period end.
Results
Turnover on continuing activities has increased by 26 per cent. in the second
quarter and our overall commission rate has risen from 7.8 per cent. during
quarter 1 to 9.7 per cent. in quarter 2.
The results of the group for the second quarter of 2000 show a loss before and
after taxation of #1.69m, bringing the loss for the half year to #2.9m.
Sales and distribution costs have remained broadly consistent quarter on
quarter, demonstrating the effectiveness of WTH's conservative customer
acquisition strategy. Administration costs have increased sharply in the
second quarter, reflecting the investment the Group has made in the technology
being built to underpin Fare1.
worldtraveldirect
Development of the Group's consumer facing website, worldtraveldirect.com,
continues. Sales of travel and travel related products directly to consumers
both by telephone and over the Internet is progressing well, with sales
significantly ahead of plan, while customer acquisition costs are declining.
The attractiveness of the Group's technology platform to users continues to be
demonstrated by the ongoing success of this part of the business.
Important progress has been made during the period in developing
worldtraveldirect as a consumer travel portal. The number of consumer
transactions has nearly doubled, with the number of registered users
increasing nearly fivefold. Site visits have also nearly tripled during the
three months and bookings completed on line have risen through the quarter to
24 per cent. in June. Customer acquisition spend has been held below the
original plan. Margin per transaction for the call centre and web site was
#40 for the quarter compared with a plan for the year of #43. The web index,
used by the Group to monitor the effectiveness of conversion of site visitors,
averaged 45 in the quarter compared with 34 in the first quarter. The call
index, used to monitor the effectiveness of call centre conversion, averaged
77 for the quarter compared with 65 in the first quarter. The mature level
assumed by the Group's business plan for both these index measures is 100.
Fare 1
Fare 1, the Group's business that enables travel agents to use the Internet as
a competitive tool was launched this week at the American Society of Travel
Agents ("ASTA") World Congress in Las Vegas, Nevada, USA. Response to the
launch advertising campaign has been excellent. In addition, over 250 US
travel agents attending ASTA have signed up, to date, for Fare 1's travel
Internet services.
Significant progress has been made with Fare 1 since the publication of WTH's
Prospectus. WTH has now signed a strategic agreement with Worldspan, one of
the world's leading global distribution systems ("GDS") which, from mid-
November, will enable travel agents to access Worldspan's global travel
billing and information system from their desktops, as well as being able to
book a wide range of consolidated fares on line.
Fare 1 has also announced today that it has signed agreements with two of the
largest ticket consolidators in the US, Skylink and DER. This gives the
Company significant competitive advantage and enables Fare 1 to offer its
travel agent clients access to negotiated fares in the US to more than 1050
destinations worldwide. The Company is making good progress in converting the
other agreements in principle with consolidators referred to in the
Prospectus.
Finally, Fare 1 has also signed an agreement with Kemwell Holiday Autos which
enables Fare 1 agents to directly access Kemwell's fleet of 750,000 cars in
4,000 locations throughout the world.
Jonathan Biles, Chief Executive, WTH, said:
"We are pleased with the progress the Group is making. We continue to work
towards creating a company that delivers travel technology and services to the
travel agent, consumer and corporate markets. The flotation of WTH has given
us the funds we need to fulfil our plan of achieving breakeven by April 2002.
"Our initial priority is the development and roll out of Fare 1, initially in
the US and then in the UK and Europe. We are delighted with the reaction of
the US travel agency market to the launch of Fare 1. The Board is confident
that the strategy and the business plan will be delivered successfully."
For further information please contact:
World Travel Holdings plc 020 7456 1352
Jonathan Biles, Chief Executive
Credit Lyonnais Securities 020 7588 4000
Christopher Yates
Financial Dynamics 020 7831 3113
Nick Miles or Jon Earl
Notes:
The travel market
* Global travel market estimated at over US$500 billion in air travel alone
each year
* Only 20 per cent. of those who research travel online then book online
* It is currently estimated that approximately 12 per cent. of the global
travel market will be booked directly on the Internet by consumers by
2003
* It is currently estimated that 88 per cent. of travel commerce will be
booked by other means - principally travel agents - by 2003
* Over 40,000 travel agency offices in the US with estimated 250,000
personnel
* Each US agency location processes on average 350 tickets per month
* 8,500 travel agency locations in the UK with 23,000 travel agency managers
Consolidated profit and loss accounts
Three months Six months
ended ended Year ended
Gross Travel 30-Jun 30-Jun 31-Dec
Sales
2000 2000 1999
Note #'000 #'000 #'000
s
Continuing 1,233 2,444 1,454
Acquisitions - - 1,151
1,223 2,444 2.605
Discontinued 47 308 948
1,280 2,952 3,553
Turnover 1
Continuing 120 215 110
Acquisitions - - 72
120 215 182
Discontinued - 18 87
120 233 269
Selling and 1 (420) (803) (138)
distribution
costs
Administration 1 (1,390) (2,157) (2,169)
costs
Operating loss 1
Continuing (1,690) (2,727) (1,968)
Acquisitions - - (55)
(1,690) (2,727) (2,023)
Discontinued - - (15)
Operating loss (1,690) (2,727) (2,038)
Loss on disposal 2 (148) -
of fixed assets
Profit on sale of - - 72
discontinued
operations
Loss on ordinary (1,688) (2,875) (1,966)
activities
Finance charges 2 17 (4)
(net)
Loss on ordinary
activities
before taxation (1,686) (2,858) (1,970)
Taxation - - (3)
Loss on ordinary
activities
after taxation (1,686) (2,858) (1,973)
being retained
loss
Basic loss per 4 (3.5p) (6.0p) (4.7p)
share
Consolidated Balance Sheets
31-Mar 30-Jun 31-Dec
2000 2000 2000
Not #'000 #'000 #'000
es
Fixed Assets
Intangible - 90 90 92
goodwill
Tangible assets 2,232 2,131 81
2,322 2,221 173
Current Assets
Debtors 918 682 912
Cash at bank and 1,563 127 96
in hand
2,481 809 1,005
Creditors:
amounts falling
due within one (2,712) (1,777) (2,625)
year
Net Current (231) (968) (1,620)
liabilities
Total assets 2,091 1,253 (1,447)
less current
liabilities
Creditors:
amounts falling
due after more
than one
year (7) (855) (5)
Net assets
2,084 398 (1,452)
Called up share 345 345 302
capital
Share premium 4,713 4,713 48
account
Shares to be 48 48 48
issued
Capital reserve 178 178 178
Profit and loss (3,200) (4,886) (2,028)
account
Equity 2,084 3,918 (1,452)
Shareholders'
funds
Consolidated cash flow statements
Three months Six months Year
ended ended ended
30-Jun 30-Jun 31-Dec
2000 2000 1999
#'000 #'000 #'000
Cash
inflow/(outflow)
from
operating activities (891) (3,105) 285
Returns on
investments and
servicing of finance 2 17 (4)
Taxation - - (3)
Capital expenditure
and financial
investment (1,310) (2,366) (48)
Acquisition and - - (300)
disposals
Cash outflow before (2,200) (5,454) (70)
financing
Financing 900 5,612 (5)
Increase/(decrease) (1,300) 158 (75)
in cash in
the period
Reconciliation of
net cash
flow to movement in
net debt
Increase/(decrease) (1,300) 158 (75)
in cash in period
Cash inflow from
increase in debt
and lease financing (900) (900) (7)
Change in net
(debt)/cash
resulting
from cash flows (2,200) (742) (82)
New finance leases - (4) 5
Movement in net (2,200) (746) (77)
(debt)/ cash in the
period
Net (debt) at the 1,375 (79) (2)
start of the period
Net (debt)/cash at
the end of the
period (825) (825) (79)
Notes
1. Turnover and operating profit/(loss)
The group is engaged in only one class of business, the sale of travel
products and services. These activities are principally undertaken in the UK.
Costs of selling and distribution and administrative costs analysed between
continuing and discontinued operations are as follows:
3 months ended 6 months ended Year ended
30-Jun 30-Jun 31-Dec
2000 2000 1999
#'000 #'000 #'000
Selling and
distribution costs
Continuing 420 803 98
Discontinued - - 40
420 803 138
Administrative
costs
Continuing 1390 2,139 1,980
Acquisitions - - 127
1390 2,139 2,107
Discontinued 18 62
1390 2,157 2,169
2. Loss on ordinary activities before taxation is stated after charging:
3 months ended 6 months ended Year ended
30-Jun 30-Jun 31-Dec
2000 2000 1999
#'000 #'000 #'000
Auditors'
remuneration
- Audit 13 15 6
- Other 4 7 3
Depreciation and
other amounts
written off
-tangible fixed
assets
- Owned 42 322 6
- Leased 1 2 3
Amortisation and
write of
goodwill - 2 318
Research and
development
expenditure 568 688 196
Operating lease
rentals - plant
and machinery 1 2 2
Recharge of costs
and fees from
Culver Holdings plc 36 84 1,239
3. Staff numbers and costs
The average monthly number of persons employed by worldtraveldirect.com plc
Group (including directors) during the period, analysed by category, was:
31-Mar 30-Jun 31-Dec
2000 2000 1999
Management and 24 22 3
administration
Sales 18 27 10
42 49 13
Their aggregate remuneration comprised:
3 months ended 6 months ended Year ended
Jun 2000 2000 31 Dec 1999
#'000 #'000 #'000
Wages and 232 478 218
salaries
Social Security 21 47 18
costs
Other pension 3 5 0
costs
256 530 236
4. Loss per share
The calculation of loss per share is based on the loss on ordinary activities
after taxation in the financial period and the weighted average number of
ordinary shares of World Travel Holdings plc in issue immediately upon the
listing of World Travel Holdings plc as adjusted for the capital
reorganisation described in the Accountants' Report on World Travel Holdings
plc and changes in worldtraveldirect.com plc's' issued share capital
throughout the reported period.
3 months ended 6 months ended Year ended
June 30-Jun 31-Dec
2000 2000 1999
Loss on ordinary (1,686) (2,859) (1,973)
activities after
tax
(#'000)
Weighted average
number of shares
(000's) 48,119 47,326 42,373
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