RNS Number:8498K
World Travel Holdings PLC
28 September 2001
World Travel Holdings plc
Interim Results for the six months ended 30 June 2001
World Travel Holdings plc, the AIM listed travel technology and services
company today announces its trading results for the half year to 30 June 2001.
Financial Highlights
* Gross travel sales #10.2m, an eight-fold increase against corresponding
period last year
* Resulting commission up 658% against the first half of 2001 to #910,000
* Gross margins across the group increased to 8.9% from 7.6% in
corresponding period last year
Operating Highlights for Second Quarter
* Acquisition of Deckchair completed and integrated during the quarter and
Group's technology implemented
* TISS.com and flights.com acquired during the period
* Registered user numbers on consumer facing websites increased more than
20 times over last year to 360,477 (2000: 17,821)
Commenting on the results, Jonathan Biles, Chief Executive of World Travel
Holdings plc, said:
"Despite what we originally considered satisfactory interim results and good
progress towards our planned profitability in 2002, the events of September 11
in New York have dealt a very serious blow to our business. The significant
strength that we had worked so hard to build in the United States has turned
into a handicap in the current climate. Your directors are working to
determine the likely levels of revenue for coming months, to align the Group's
costs with these revised expectations where this is viable and to establish
the Group's changed funding requirements"
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
World Travel Holdings plc, the AIM listed travel technology and services
business today announces its trading results for the half year to 30 June
2001.
Chairman's Statement
The events of September 11 have completely changed the immediate, and possibly
the longer term, market in which the Group operates - this has impacted the
Group's business and its outlook. Until that date, the board was looking
forward to the future with confidence and remained satisfied that the Group
would achieve sustained profitability from the second quarter of 2002 as
originally planned.
As shareholders will be aware the majority of the Group's business comes from
North America. In the United States, Travac is a leading air ticket
consolidator based in downtown Manhattan and the recently acquired TISS had,
until September 11, very significant air ticket sales in North America. In
Canada, NetFaresOnline is the leading distributor of discounted air fares to
Canadian travel agents, with a significant proportion of the flights it sells
being routed through the United States. The revenues of these businesses
have been very severely affected by the atrocities. It is indeed only in the
last day or so that Travac's sales have become positive (i.e. the volume of
sales has exceeded the volume of cancellations). The sales of Flights.com
have collapsed by 60 per cent.
The Group has been hit extremely hard because of its position in the
transatlantic market in which Travac and the recently acquired Flights.com
were particularly strong.
The European part of the Group is less badly affected,although the Group's
European operations are less significant in terms of volume.
In light of the above, it is virtually impossible to predict the level of
sales which may be available to the Group in the future. Immediate steps
have been taken by the board to reduce the Group's cost base and the directors
are now carefully reviewing the the viability of each of the Group's
operations.
Results
In the first half of the year, gross travel sales increased nearly eight fold
to #10,239,000 (2000:#1,280,000) and turnover (being largely commission
income) increased by 658 per cent over the same period last year to #910,000
(2000:#120,000). Gross margin improved to 8.9% from 7.6% as the Company
focused on delivering higher margin business to its customers and has
increased in scale.
The results of the Group for the first half of 2001 show a loss before and
after taxation of #3.7m (2000:#1.7m) in line with management expectations.
The Group was profitable in August, but any chance of the previously hoped for
profitability in the third quarter has clearly evaporated.
At the end of the first half, the Group had cash of #0.5m and available cash
resources of #1.4m.
Corporate Activity
In the first half 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.
In January, Travac, a leading North American consolidator was acquired. In
February the Group announced the acquisition of NetFaresOnline.com Inc in
Canada. In May, the Group was further enhanced with the acquisition of
Deckchair and since then the deckchair.com site has been successfully migrated
to the Group's technology with functionality being progressively increased.
The acquisition of the travel business of TISS and Flights.com, announced in
August, is the most recent addition to the Group's portfolio. TISS, the
longest established online consumer travel business in the world, operates two
principal sales websites Flights.com and TISS.com, and sells direct to the
consumer net priced discounted air fares from over 34 different countries in
five languages. The main markets for TISS are the United States and Germany
but there are also significant sales in the rest of the world.
Consumer Distribution
The number of registered customers of our consumer facing businesses,
Deckchair and WorldTravelDirect, has grown significantly. The purchase of
Deckchair has greatly increased the number of registered customers to 360,477
(2000:17,821).
Prospects
The Directors are monitoring closely the levels of trading which the Group is
achieving and seeking to identify a trend which will enable sensible
predictions of future sales to be made. They are also seeking to align the
cost bases in the Group's operations to likely reveue levels and identifying
the Group's funding requirements under these circumstances.
The directors will keep shareholders fully informed in the coming weeks as to
the results of their conclusions in the light of developing circumstances and
of their plans for the future.
Consolidated Profit & Loss Account
Six Months to 30 June Six Months to 30 June Year to
2001 2000 31
December
2000
#'000 #'000 #'000
Gross Travel Sales
Continuing:
Ongoing 4,153 1,233 5,879
Acquisition 6,086 47 -
Discontinued operation - 308
10,239 1,280 6,187
Turnover
Continuing:
Ongoing 342 120 452
Acquisition 568 - -
Discontinued operation - 18
910 120 470
Cost of Sales (31) - (100)
Gross profit 879 120 370
Selling and distribution (513) (420) (1,945)
costs
Administrative expenses
General administrative (3,114) (1,390) (5,035)
expenses
Impairment of fixed assets (423) - (150)
Operating loss
Continuing
Ongoing (2761) (1,690) (6,590)
Acquisition (410) - (351)
Discontinued -
(3,171) (1,690) (6941)
Loss on disposal of fixed - 2 (13)
assets
Goodwill amortisation (524) - (181)
Loss before interest and taxation (3,695) (1,688) (6,954)
Interest (payable) / receivable (49) 2 103
Loss on ordinary activities before and after taxation
being retained loss (3,744) (1,686) (6,851)
Basic and diluted loss per share before goodwill
amortisation (5.50)p (3.5)p (13.26)p
Effect of goodwill amortisation (0.89)p - (0.36)p
Basic and diluted loss per share after goodwill
amortisation (6.39)p (3.5)p (13.62)p
Consolidated Balance Sheet
At 31
December
At 30 June At 30 June
2001 2000 2000
#'000 #'000 #'000
Fixed Assets
Intangible assets 5,461 90 3,447
Tangible assets 2,537 2,131 2,112
7,998 2,221 5,559
Current Assets
Debtors 5,841 682 989
Cash 509 127 2,460
6,350 809 3,449
Creditors: amounts falling due within one (9,504) (1,777) (2,156)
year
Net current Assets (3,154) (968) 1,293
Total assets less current liabilities 4,844 1,253 6,852
Creditors: amounts falling due after more
than one year (1,038) (855) (829)
Net assets 3,806 398 6,023
Capital and reserves
Called up share capital 663 345 569
Share premium account 7,510 4,713 7,560
Shares to be issued 3,461 48 1,987
Capital reserve 4,763 178 4,763
Exchange rate reserve 37 - -
Profit and loss account (12,628) (4,886) (8,856)
Shareholders' funds 3,806 398 6,023
Consolidated Cashflow Statement
At 31
December
At 30 June At 30 June
2001 2000 2000
Net cash outflow from operating (272) (819) (7,705)
activities
Returns on investment and servicing of
finance
Net interest paid (49) 2 103
Capital Expenditure
Purchase of tangible fixed assets (2,408) (1,383) (2,604)
Sale of tangible fixed assets - - 86
(2,408) (1,383) (2,518)
Acquisitions and disposals
Cash from purchase of subsidiary 476 - 98
undertaking
Financing
Repayment of borrowings - (39)
Receipts from borrowings 15 900 907
Net proceeds from issue of shares - - 11,654
15 900 12,522
(Decrease )/increase in cash (2,238) (1,300) 2,500
Notes to the financial statements
1. The interim financial statements have been prepared on the
basis of accounting policies set out in the Company's 2000 statutory financial
statements.
2. The calculation of basic earnings per share is based on the
loss on ordinary activities before taxation in the financial period and the
weighted number of ordinary shares of World Travel Holdings plc in issue as
described in the Company's 2000 statutory financial statements and changes in
World Travel Holding plc's issued share capital throughout the period.
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2001 2000 2000
#'000 #'000 #'000
Loss on ordinary activities
before taxation (3,744) (2,858) (6,851)
Goodwill amortisation 524 - 181
Loss on ordinary activities
before taxation and goodwill (3,220) (2,858) (6,670)
Weighted average number of
shares (000's) 58,556 47,326 50,296
3. The financial information set out above does not comprise
the company's statutory accounts. The comparative figures for the financial
year ended 31 December 2000 are extracted from the Company's 2000 statutory
Report and Accounts. The auditors' report on those accounts was unqualified
and did not contain any statement under section 237 (2) or (3) of the
Companies Act. These reports have been delivered to the Registrar of
Companies and are available from the Company's registered office, World Travel
House, Cardiff Gate Business Park, Cardiff, CF23 8RB.
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