RNS Number:3756E
World Travel Holdings PLC
30 May 2001
29 May 2001
World Travel Holdings plc
2001 First Quarter Results
World Travel Holdings plc, the AIM listed travel technology and services
company, today announces its trading results for the quarter to 31 March 2001.
Financial Highlights:
- Gross travel sales #3.3m, a 169% increase against corresponding period last
year
- Resulting commission up 230% against the first quarter of 2001 to #313,842
- Gross margins across the Group increased to 9.6% as a result of management
focus on this area
- Cash balances as expected
Operating Highlights:
- Acquisitions of Travac, NetFaresOnline and Online Travel Agency (HK)
concluded during the quarter
- Deckchair.com acquired since period end
- Registered user numbers of worldtraveldirect.com increased nearly 24 fold
since last year to over 87,000
- Profitability expected in Q3 2001
- Trading still on original target for ongoing profitability in 2002
Commenting on the results, Jonathan Biles, Chief Executive of World Travel
Holdings plc, said:
"Our business has performed well in the first quarter. We have successfully
executed a number of key acquisitions which have strengthened our offering and
extended our global reach. Travac, the US based consolidator we acquired in
the quarter has provided significant revenue. Our business-to-trade channel
has achieved market dominance in Canada and we expect similar success in a
number of other global markets in which we are operating.
The acquisition, completed yesterday, of Deckchair.com Holdings Limited, has,
the directors believe, secured our future in the consumer distribution
channel.
We remain confident about achieving a quarterly profit before goodwill
amortisation in the third quarter of this year and, following the normal lower
level of business in the winter season, achieving sustained profitability from
the second quarter of 2002 as originally planned.
For further information please contact:
World Travel Holdings plc 020 7456 1352
Jonathan Biles, Chief Executive
John Biles, Chairman
Credit Lyonnais Securities 020 7588 4000
Chris Yates
Financial Dynamics 020 7831 3113
Nick Miles / James Melville-Ross / Emma Rutherford
World Travel Holdings plc
2001 First Quarter Results
World Travel Holdings plc, the AIM listed travel technology and services
business, today announces its trading results for the quarter to 31 March
2001.
Results
Gross travel sales have increased by over 169 per cent to #3,259,069 (2000: #
1,210,751) and turnover (being largely commission income) has increased by 230
per cent over the same period last year to #313,842 (2000: #95,109). Gross
margin has improved to 9.6 per cent as the Company has focussed on delivering
higher margin business to its customers.
The results of the Group for the first quarter of 2001 show a loss before and
after taxation of #1,815,774 (2000: #1,171,773) in line with management
expectations.
Corporate Activity
In the first quarter of 2001 the Group announced a number of strategic
acquisitions. These acquisitions have added critical mass and global reach to
both our consumer and business offerings. World Travel Holdings has now
established a presence in the three key travel markets, Europe, North America
and Asia, and is now available to the vast majority of travel agents and
consumers across the globe.
In January, World Travel Holdings acquired Travac, a leading North American
consolidator. This acquisition substantially increased the Group's off-line
travel distribution activity and provides access to product and improved
fulfilment capability on the East Coast of the United States. It also
provides the Group with an established consumer website in the US,
www.thetravelsite.com.
In February, the Group announced the acquisition of NetFaresOnline.com Inc ("
NFO"). This acquisition gives the Group access to the Canadian travel agent
market and increases the range of consolidators whose fares may be distributed
by the Group in North America and in the UK.
In February, the Group's global footprint was extended into Asia by the
establishment of fare 1 (Asia) through the acquisition of Online Travel Agency
Limited, a Hong Kong company which provides the Asian travel market with
access to South East Asian consolidator fares.
The Group's growth has been further enhanced with the acquisition of
Deckchair, completed yesterday. This acquisition secures the Group's consumer
offering and, the Board believes, will produce a business capable of faster
growth with only one supporting infrastructure. This should advance the time
at which the Group's consumer business will become profitable and give the
Group the potential to participate further in the consolidation of the travel
technology sector.
Consumer Distribution
The number of registered customers of our consumer-facing site,
WorldTravelDirect.com, continues to grow steadily - 24 fold since the first
quarter of 2000 to 87,747 (2000:3,678). Furthermore, gross margins improved
significantly to 9.6% as management focused the business on selling higher
margin products.
WorldTravelDirect.com is seeing a steady level of enquiries and website visits
at a satisfactory rate given the modest expenditure on marketing. With the
acquisition of Deckchair and its established customer base the board believes
that the consumer business will grow at a faster rate but at a relatively
reduced marketing cost. By combining the strength of the Deckchair brand and
marketing, led by Sir Bob Geldof, with the proven effectiveness of the
Powerflyer technology platform a significant increase in the sales and
contribution from the consumer distribution channel can be achieved at an
earlier stage than had been planned.
Trade Distribution
The Group's businesses that enable travel agents to use the Internet as a
competitive tool, have been enthusiastically welcomed by travel agents in the
US and Canada. Significant interest is also now being shown by larger groups
in Europe.
The Group now dominates the Canadian market with over 30 consolidators
supplying flight product to nearly 3,000 travel agents over our platform. The
Group is now building its product base in the US where it has nearly 1,000
registered travel agents and anticipates significant growth as the product
offering is expanded.
Reports from agents booking on the live service support the board's views that
these tools will be invaluable to travel agents and that agents will use the
service for a significant volume of their business. It has, however, taken
longer than expected to persuade the European independent travel agent to
utilise all the features of the fare 1 technology. Accordingly a shift in
focus to larger organisations is being implemented across Europe.
The Group's competitive position remains strong and with the acquisition of
NFO and the formation of Fare 1 (Asia) the Group believes that it is already
the leading online distributor of consolidator fares to the retail travel
industry on a global basis.
Corporate Distribution
Corporate distribution remains an important part of the Group's strategy and
progress with World Travel Holdings' offline corporate business continues to
be good. The acquisition of Soho Travel as part of the Deckchair group, will
further that policy. Acceptance testing for the Group's Trident software
continues satisfactorily.
Prospects
The Board remains convinced that the distribution of fares and other travel
products over the internet is a valuable service and one with growing
acceptance. The Board also believes that the Group's recent acquisitions have
increased the Group's business significantly and will help advance
profitability.
Our business of trade distribution of fares and other travel products on a
global basis through NFO and fare 1 are proving invaluable tools for the
travel agent and is still one no other organisation is able to replicate.
Our consumer distribution business has been significantly expanded with the
acquisition of Deckchair. Combining the strengths of the two operations over
coming months will consolidate our position in this business and provide a
strong base for expansion.
The Board continues to explore opportunities arising in the current climate to
enhance the Group's operations and will seek, selectively, to exploit those it
considers appropriate.
The Board remains confident about achieving a quarterly profit before goodwill
amortisation in the third quarter of this year and, following the normal lower
level of business in the winter season, achieving sustained profitability from
the second quarter of 2002 as originally planned.
- ends -
For further information please contact:
World Travel Holdings plc 020 7456 1352
Jonathan Biles, Chief Executive
John Biles, Chairman
Credit Lyonnais Securities 020 7588 4000
Chris Yates
Financial Dynamics 020 7831 3113
Nick Miles
James Melville-Ross
Emma Rutherford
Notes to Editors:
The current business operations of World Travel Holdings plc ("WTH") comprise:
- www.worldtraveldirect.com, a full service direct to consumer website, which
sells scheduled and discounted flights, hotels, car hire, travel insurance,
valet parking, and inclusive tours to the public, both online and via a 24
hour, 7 day a week call centre;
- Travac Tours & Charters Inc, a New York based consolidator, serving travel
agents mainly on the Eastern Seaboard of the United States;
- Fare 1 Inc (www.fare1.com), which has premises in New York and the UK, and
which provides travel agents with the ability to search, reserve and book a
range of flight consolidators and scheduled fares online in real time in both
the US and the UK;
- NetFaresOnline (www.netfaresonline.com), a Canadian company based in Toronto
which operates a business providing travel agents in Canada with the ability
to search, reserve and book a range of flight consolidators online in real
time;
- Fare 1 Asia, a Hong Kong based company which provides the South East Asian
travel agency market with access to consolidator fares and provides WTH with
access to a low cost fare management facility in Guangzhou in the People's
Republic of China and a foothold in the South East Asian travel market, one of
the largest and most dynamic in the world.
These businesses are supported by the following infrastructure:
- A 24 hour, 365 day a year call centre based in Cardiff, South Wales. This
facility comprises 10,000 square feet of brand new, custom built air
conditioned space, fully hosted IT environment on the same Cardiff site
including multiple GDS connections and ticketing facilities, hot standby
servers, twin 2 megabit internet connections provided by NTL and BT for full
redundancy, uninterruptible power supplies and a standby generator capable of
supporting the entire site indefinitely;
- Call centres in New York and Orlando with experienced travel professionals
supporting both online and offline sales to travel agents;
- A state of the art facility in San Jose, California, with multiple GDS
connections and ticketing facilities;
- A fully staffed and licensed travel fulfilment operation in Toronto, Canada;
- A fully staffed and licensed travel fulfilment operation in Hong Kong, with
a fully staffed fares management facility in Guangzhou, PRC;
- Full ABTA, IATA, ATOL, ARC and similar licenses
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 & Loss Accounts
Three months Three months Year
ended ended ended
Gross Travel Sales 31 Mar 2001 31 Mar 2000 31 Dec 2000
Notes #'000 #'000 #'000
Continuing 1,932 1,211 5,921
Acquisitions 1,327 - -
3,259 1,211 5,921
Discontinued - 261 308
3,259 1,472 6,228
Turnover 1
Continuing 176 95 452
Acquisitions 138 - -
452
Discontinued - 18 18
314 113 470
Selling and 1 (306) (383) (2,045)
distribution costs
Administration 1 (1,823) (767) (5,216)
costs
Operating loss 1
Continuing (1,553) (1,037) (6,791)
Acquisitions (263) -
(1,816) (1,037) (6,791)
Discontinued - - -
Operating loss (1,816) (1,037) (6,791)
Loss on disposal of - (150) (163)
fixed assets
Loss on ordinary (1,816) (1,187) (6,954)
activities
Finance charges - 15 103
(net)
Loss on ordinary (1,816) (1,172) (6,851)
activities before
taxation
Taxation - - -
Loss on ordinary (1,816) (1,172) (6,851)
activities after
taxation being
retained loss
Basic loss per (3.19) (3.16) (15.9)
share
Consolidated Balance Sheets
31 Mar 2001 31 Mar 2000 31 Dec 2000
#'000 #'000 #'000
Fixed Assets
Intangible - goodwill 5,000 90 3,447
Tangible assets 2,243 2,232 2,112
7,242 2,322 5,559
Current Assets
Debtors 4,236 918 989
Cash at bank and in hand 780 1,563 2,460
5,016 2,481 3,449
Creditors : amounts falling (5,820) (2,712) (2,156)
due within one year
Net current liabilities (805) (231) 1,293
Total assets less current 6,438 2,091 6,852
liabilities
Creditors: amounts falling due (868) (7) (829)
after more than one year
Net assets 5,570 2,084 6,023
Capital and reserves
Called up share capital 569 345 569
Share premium account 7,560 4,713 7,560
Shares to be issued 3,338 48 1,987
Capital reserve 4,763 178 4,763
Exchange reserve 40 - -
Profit and loss account (10,700) (3,200) (8,856)
Equity Shareholders' funds 5,570 2,084 6,023
Consolidated Cash Flow Statements
Three months Three months Year
ended ended ended
31 Mar 2001 31 Mar 2000 31 Dec 2000
#'000 #'000 #'000
Cash outflow from operating (1,615) (2,286) (7,707)
activities
Returns on investments and (12) 15 67
servicing of finance
Taxation - - -
Capital expenditure and (552) (983) (2,518)
financial investment
Acquisition and disposals 380 - 98
Cash outflow before (1,799) (3,254) (10,060)
financing
Financing - 4,712 12,558
(Decrease)/ increase in cash (1,799) 1,458 2,498
in the period
Reconciliation of net cash
flow to movement in net debt
(Decrease) / increase in (1,799) 1,458 2,498
cash in period
Cash inflow from increase in - - (875)
debt and lease financing
Change in net (debt)/ cash (1,799) 1458 1,623
resulting from cash flows
New finance leases - (4) 2
Movement in net (debt) / (1,799) 1,454 1,625
cash in the period
Net cash/(debt) at the start 1,550 (79) (79)
of the period
Net (debt)/cash at the end (249) 1,375 1,546
of the period
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.
Cost of selling and distribution and administrative costs analysed between
continuing and discontinued operations are as follows:
The sale of travel products and services which are transacted in the UK are
recognised at the time of booking. The sale of travel products and services
which are transacted in the USA by our subsidiary Travac are recognised when
the customer travels.
3 months 3 months Year
ended ended ended
31 Mar 2001 31 Mar 2000 31 Dec 2000
Selling and distribution costs
Continuing 337 383 (2,045)
Acquisitions 30 - -
Discontinued - - -
367 383 (2,045)
Administrative costs
Continuing 1,470 767 (5,216)
Acquisitions 353 - -
1,823 767 (5,216)
Discontinued - - -
1,823 767 (5,216)
2. Loss on ordinary activities before taxation is stated after charging:
3 months 3 months Year
ended ended ended
31 Mar 2001 31 Mar 2000 31 Dec 2000
Auditors' remuneration
- Audit 11 3 45
- Other 4 0 7
Depreciation and other amounts
written off
- Tangible fixed assets 33 14 474
- Owned 3
Amortisation and write of 249 4 181
goodwill
Research and development 9 151 1,256
expenditure
Operating lease rentals - 3 3 4
plant and machinery
Recharge of costs and fees
from Culver Holdings plc 166 82 157
3. Staff Numbers and costs - UK Operations only
The average monthly number of persons employed by World Travel Holdings plc
Group (including directors) during the period, analysed by category, was:
3 months 3 months Year
ended ended ended
31 Mar 2001 31 Mar 2000 31 Dec 2000
Management and administration 22 15 19
Sales 44 23 35
66 38 54
Their aggregate remuneration comprised:
3 months 3 months Year
ended ended ended
31 Mar 2001 31 Mar 2000 31 Dec 2000
Wages and salaries 323 252 1,150
Social Security costs 29 25 109
Other pension costs 4 2 15
356 279 1,274
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 plcs' issued share capital
throughout the reported period.
3 months 3 months Year
ended ended ended
31 Mar 2001 31 Mar 2000 31 Dec 2000
Loss on ordinary activities (1,816) (1,172) (6,851)
after tax (#'000)
Weighted average number of 56,919 37,052 43,200
shares (000's)
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