RNS Number:6509U
World Travel Holdings PLC
24 November 2000
November 24 2000
World Travel Holdings plc
2000 Third Quarter Results
World Travel Holdings plc, the travel technology and services business
admitted to trading on AIM in mid September today announces its trading
results for the quarter to 30 September 2000.
Financial Highlights:
* Gross travel sales up to #1.98m, a 51% increase against second quarter
* Resulting commission up 11% against the second quarter to #1332,000
* Better than anticipated loss before taxation at #1.42m for the quarter
* Cash balances higher than expected
Operating Highlights:
* Flotation on AIM in September raising #7.7m after expenses
* Very positive initial response to Fare 1 from US travel agents
* Registered user numbers of worldtraveldirect.com more than doubled
during the period
* Trading still on original target for profitability in 2002
Commenting on the period, Jonathan Biles, Chief Executive of World Travel
Holdings plc, said:
"I am delighted to be able to report that all areas of our business have shown
strong progress during our first quarter as a public company. As we proceed,
our technology is proving to give us an evident leading position and, as
others recognise this, we see further opportunities opening up. These will
drive development beyond the Group's projected breakeven in early 2002 which
we view with increasing confidence."
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
November 242 2000
World Travel Holdings plc
2000 Third Quarter Results
World Travel Holdings plc, the travel technology and services business
admitted to trading on AIM in mid September today announces its trading
results for the quarter to 30 September 2000.
Results
The results for the quarter reflect solely the trading of the Group's consumer
facing travel distribution business, WorldTravelDirect.com. The first trading
of the Group's fare 1 product, which services the travel agency market, is in
the fourth quarter.
On a quarter by quarter basis, gross travel sales have increased by over 50
per cent to #1.9m and turnover (being largely commission income) has increased
by 11 per cent.. Gross margin is likely to improve during the coming quarters,
as the Company delivers more longer haul and higher margin business.
The results of the Group for the third quarter of 2000 show a better than
expected loss (after writing off the entire development costs associated with
fare 1) before and after taxation of #1.42m, bringing the loss for the nine
months to #4.28m.
At the end of the third quarter, the Group had cash resources of #6.35.9m,
higher than anticipated.
Turnover during the quarter was significantly ahead of plan, losses were below
plan and the cash spend was also below the management's expectations.
WorldTravelDirect
The number of registered customers of our consumer facing site,
worldtraveldirect.com, more than doubled during the quarter. The number of
website visits grew at our target rate, the "book to look" ratio improved by
just under 40 per cent and the cost per response fell sharply. The index (out
of 100) that is used to measure the performance of this business was expected
to reach that target well into the future but has almost been reached already.
This was achieved during a period when the majority of management time was
devoted to the flotation of the company on AIM and the development of the fare
1 product for launch in late September.
Promotional expenditure continued at the modest level of the previous quarter
but passenger numbers doubled producing an increase in gross travel sales of
51 per cent. to #1.98m. The level of margin earned during the period was
slightly below management expectations principally due to a higher volume of
less profitable short haul flights being booked through the site. Gross
margins are returning to more appropriate levels as the management focuses on
the marketing of higher margin products.
In the fourth quarter to date, the WorldTravelDirect business is seeing an
increased level of enquiries and website visits but sales have been slightly
checked by constraints on airline and hotel capacity which are normal at this
time of year when customers wish to travel during a very short period around
Christmas. This issue is likely to improve as the quarter draws to a close and
into the first quarter of 2001.
Overall, the Group is very pleased with the progress that WorldTravelDirect is
making. Progress in this part of the business demonstrates the effectiveness
of the Powerflyer platform and underlines our customers' satisfaction with the
service provided, which the board believes is the cause of increasingly
evident customer loyalty.
fare 1
fare 1, the Group's business that enables travel agents to use the Internet as
a competitive tool, has been enthusiastically welcomed by travel agents in the
US and the UK. The live service was delayed by the slow delivery of increased
service capacity by the Global Distribution Service to the Group's
communications centre. This capacity has now been made available and the live
service is being progressively rolled out to all registered agents. Initially,
this roll out is being focused on the US but we expect to commence roll out
into the UK before the end of this year.
The Group's initial assessment of registrations from the ASTA Congress and
from the related trade advertising campaign proved to contain a number of
multiple registrations from single locations. After eliminating these, fare 1
now has a total of 583 unique locations (most of which have multiple agent
users) registered for the live service and discussions are under way which
could lead to a significant increase in this number via a single relationship.
Early reports from agents booking on the live service are supportive of the
board's views that the fare 1 tool will be invaluable to travel agents and
that they will use the service for a significant volume of their business. It
is, however, still too early to draw definitive conclusions about the level of
income which a typical agent will generate for the Group. This will become
progressively clearer over the coming months.
The Ggroup continues to add product from consolidators, car hire companies and
hotels to the service.
The Group's competitive position remains strong. Whereas there are certain
other companies able to provide a similar service in this market, none have
the capacity to deal with the large blocks of data common to many of the
larger consolidators. fare 1's unique advantage is its ability to offer fares
from any consolidator on one screen, without needing to reprocess each
additional consolidator's data onto the host database.
This ability has lead to a number of approaches to the company to enter
collaborative ventures including some with well established players in the
industry which could benefit both parties. Discussions are taking place on a
number of fronts with a view to expanding the service with fares from other
European countries and Asia to agents throughout the world by the first
quarter of 2001 and on other fronts which might lead to other beneficial
associations.
Trident
Trident remains an important part of the Group's strategy. Once resources
currently deployed on the rapid development of fare 1 can be released, the
Group expects that its corporate travel offering will develop at an increased
rate.
Prospects
Early reports from the live service and the discussions in which the Group is
being involved convince the Board that the fare 1 offering will prove an
invaluable service to the travel agent and is still one which no other
organisation is able to replicate on a global scale. The Board confidently
expects that the levels of business that will develop from the registered
agent base over the coming months will underpin the key outturns from the
Group's business plan.
The Group's consumer business continues to develop ahead of plan and
demonstrates the effectiveness of the Powerflyer platform.
The Board is exploring a number of opportunities to expand its current
services geographically and it is anticipated that these would complement the
existing plan and operations of both fare 1 and WorldTravelDirect.
The Board remains confident of the profitable future for the Group.
- 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
Notes to Editors:
World Travel Holdings plc
The business of the Group is the distribution of travel products and services
over the internet on a global basis through a variety of channels using the
Group's proven Powerflyer(R) technology platform. The Group will address 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.
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 Nine Months
ended ended Year ended
Gross Travel Sales 30-Sep 30-Sep 31-Dec
2000 2000 1999
Notes #'000 #'000 #'000
Continuing 1,862 4,306 1,454
Acquisitions - - 1,151
1,862 4,306 2,605
Discontinued - 308 948
1,862 4,613 3,553
Turnover 1
Continuing 133 347 110
Acquisitions - - 72
133 347 182
Discontinued - 18 87
133 365 269
Selling and distribution costs 1 (533) (1,336) (138)
Administration costs 1 (1,055) (3,212) (2,169)
Continuing (1,455) (4,183) (1,968)
Acquisitions - - (55)
(1,455) (4,183) (2,023)
Discontinued - - (15)
Operating loss (1,455) (4,183) (2,038)
Loss on disposal of fixed assets (15) (163) -
Profit on sale of discontinued operations - - 72
Loss on ordinary activities 2 (1,470) (4,346) (1,966)
Finance charges (net) 47 64 (4)
Loss on ordinary activities
before taxation (1,423) (4,282) (1,970)
Taxation - - (3)
Loss on ordinary activities
after taxation being retained loss (1,423) (4,282) (1,973)
Basic loss per share (p) 4 (2.9)p (8.8)p (4.7)p
Consolidated Balance Sheets
30-Jun 30-Sep
2000 2000
#'000 #'000
Fixed Assets
Intangible - goodwill 90 3,629
Tangible assets 2,131 2,150
2,221 5,779
Current Assets
Debtors 682 2,086
Cash at bank and in hand 127 7,165
809 9,251
Creditors : amounts falling
due within one year (1,777) (4,313)
Net current liabilities (968) 4,938
Total assets less current 1,253 10,717
liabilities
Creditors: amounts falling
due after more than one
year (855) (844)
Net assets
398 9,873
Capital and reserves
Called up share capital 345 569
Share premium account 4,713 8,865
Shares to be issued 48 1,987
Capital reserve 178 4,762
Profit and loss account (4,886) (6,310)
Equity Shareholders' funds 398 9,873
Consolidated cash flow statements
Three months Nine months
ended ended
30-Sep 30-Sep
2000 2000
#'000 #'000
Cash inflow / ( outflow) from
operating activities (1,106) (4,283)
Returns on investments and
servicing of finance 47 64
Taxation
Capital expenditure and financial
investment (112) (2,405)
Acquisition and disposals
Cash outflow before financing (1,171) (6,624)
Financing 8,320 (13,928)
Increase/(decrease) in cash in the 7,149 7,304
period
Reconciliation of net cash flow to
movement in net debt
Increase /(decrease) in cash in period 7,149 7,304
Cash inflow from increase in
debt and lease financing - (900)
Change in net (debt)/ cash resulting
from cash flows 7,149 6404
New finance leases - (4)
Movement in net (debt) / cash in the period 7,149 6400
Net (debt) at the start of the period (828) (79)
Net (debt)/cash at the end of the period 6,321 6,321
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 9 months Year
ended ended ended
30-Sep 30-Sep 31-Dec
2000 2000 1999
#'000 #'000 #'000
Selling and distribution costs
Continuing (533) (1,336803) (98)
Discontinued (40)
(533) (1,336803) (138)
Administrative costs
Continuing (1,055) (3,2122,157) (1,980)
Acquisitions (127)
(1,055) (3,2122,157) (2,107)
Discontinued (62)
(1,055) (3,2122,157) (2,169)
2. Loss on ordinary activities before taxation is stated after charging:
Auditors' remuneration
- Audit 3 18 6
-other - 7 3
Depreciation and other amounts written off
- Tangible fixed assets
- Owned 92 414 6
- Leased 1 3 3
Amortisation and write of goodwill - 2 318
Research and development expenditure 100 788 196
Operating lease rentals - plant and
machinery 1 3 2
Recharge of costs and fees from Culver
Holdings plc 36 120 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:
3 months 9 months Year
ended ended ended
30-Sep 30-Sep 31-Dec
2000 2000 1999
Management and administration 21 19 3
Sales 34 27 10
55 46 13
Their aggregate remuneration comprised:
3 months 9 months Year
ended ended ended
30-Sep 30-Sep 31-Dec
2000 2000 1999
#'000 #'000 #'000
Wages and salaries 364 842 218
Social Security costs 36 83 18
Other pension costs 6 11 0
406 936 236
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 World Travel Holding plc's issued share capital throughout
the reported period.
3 Months 9 Months Year
ended ended ended
30-Sep 30-Sep 31-Dec
2000 2000 20001999
Loss on ordinary activities after tax (1,423) (4,282) (1,973)
( #'000)
Weighted average number of shares (000's) 49,228 48,625 42,373
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