RNS Number:3687N
World Travel Holdings PLC
19 November 2001
This is an amendment to the Interim Results announcement released on
28 September 2001 under RNS No 8498K.
Interim Results
The Group announced its interim results to the London Stock Exchange on 28
September 2001. It has now been discovered that, as a result of administrative
errors, there were a number of inaccuracies in the statement. These include
(a) the comparative numbers for the profit and loss account described as being
for the six months to 30 June 2000, in fact, for the three months to 30 June
2000, (b) the balance sheet at 30 June 2001 did not fully reflect the goodwill
which arose on the acquisition of Deckchair, thus understating intangible
assets and total assets and (c) an erroneous cash flow statement was included.
The interim statement incorporating these changes and related consequential
changes is set out below. The effect of these changes is to increase net
assets by #2.8 million to #6.6 million, due to an increase in goodwill of #3.0
million to #8.4 million offset by an increase in Creditors of #200,000. The
Directors will be reviewing the carrying value of goodwill at the year end as
explained above. The changes described above had no impact of the operating
loss or total decreases in cash for the period.
The Company has now implemented procedures which are designed prevent a
similar occurrence in the future.
The following is the text (as corrected as described above) of an announcement
published on 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, a four fold increase against
corresponding period last year
* Resulting commission up 291 per cent. against the first half of 2001
to #910,000
* Gross margins across the group increased to 8.9 per cent. from 8.5
per cent. 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".
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 four fold
to #10,239,000 (2000: #2,752,000) and turnover (being largely commission
income) increased by 291 per cent. over the same period last year to #910,000
(2000: #233,000). Gross margin improved to 8.9 per cent. from 8.5 per cent. 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: #2.9m) 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 revenue 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 Six months Year
to to to
30 June 30 June 31 December
2001 2000 2000
(restated) (restated)
#'000 #'000 #'000
Gross Travel Sales
Continuing:
Ongoing 4,153 2,444 5,879
Acquisition 6,086 - -
Discontinued operation - 308 308
------- ------ ------
10,239 2,752 6,187
Turnover
Continuing:
Ongoing 342 215 452
Acquisition 568 - -
Discontinued operation - 18 18
------ ------ ------
910 233 470
Cost of sales (31) (50) (100)
Gross profit 879 183 370
Selling and distribution costs (513) (753) (1,945)
Administrative expenses:
Other administration expenses (2,952) (2,157) (5,035)
Impairment of fixed asset investment (116) - -
Impairment of tangible fixed assets (469) (148) (150)
Goodwill amortisation (524) - (181)
------- ------- -------
Operating loss
Continuing:
Ongoing (3,285) (2,875) (6,590)
Acquisition (410) - (351)
Discontinued - - -
-------- ------- -------
(3,695) (2,875) (6,941)
Loss on disposal of fixed assets - - (13)
-------- -------- --------
Loss before interest and taxation (3,695) (2,875) (6,954)
Interest (payable) / receivable (49) 17 103
--------- ---------- ----------
Loss on ordinary activities before and after (3,744) (2,858) (6,851)
taxation being retained loss
--------- ---------- ----------
Basic and diluted loss per share before (5.50)p (6.0)p (13.26)p
goodwill amortisation
Effect of goodwill amortisation (0.89)p - (0.36)p
Basic and diluted loss per share after (6.39)p (6.0)p (13.62)p
goodwill amortisation
Consolidated Balance Sheet
At At At
30 June 30 June 31 December
2001 2000 2000
(restated) (restated) #'000
#'000 #'000
Fixed assets
Intangible assets 8,444 90 3,447
Tangible assets 2,537 2,131 2,112
------------ ------------ ------------
10,981 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 (9,837) (1,777) (2,156)
one year
------------ ------------ ------------
Net current (liabilities)/assets (3,487) (968) 1,293
------------ ------------ ------------
Total assets less current liabilities 7,494 1,253 6,852
Creditors: amounts falling due after (887) (855) (829)
more than one year
------------ ------------ ------------
Net assets 6,607 398 6,023
======= ======= =======
Capital and reserves
Called up share capital 663 345 569
Share premium account 7,382 4,713 7,560
Shares to be issued 6,390 48 1,987
Capital reserve 4,763 178 4,763
Profit and loss account (12,591) (4,886) (8,856)
------------ ------------ ------------
Shareholders' funds 6,607 398 6,023
======= ======= =======
Consolidated Cashflow Statement
At At At
30 June 30 June 31 December
2001 2000 2000
(restated) (restated) #'000
#'000 #'000
Net cash outflow from operating (1,329) (3,105) (7,705)
activities
Returns on investment and servicing of
finance
Interest received 8 17 131
Interest paid (57) - (28)
------------ ------------ ------------
Net cash (outflow)/inflow from returns
on investment and servicing of finance (49) 17 103
Capital Expenditure
Purchase of tangible fixed assets (70) (2,366) (2,604)
Sale of tangible fixed assets - - 86
------------ ------------ ------------
Net cash outflow from capital (70) (2,366) (2,518)
expenditure
Acquisitions and disposals
Purchase of subsidiary undertakings (902) - -
Net cash balances acquired with 237 - 98
subsidiary undertaking
------------ ------------ ------------
Net cash (outflow)/inflow from (665) - 98
acquisitions and disposals
------------ ------------ ------------
Net cash outflow before financing (2,113) (5,454) (10,022)
------------ ------------ ------------
Financing
Issue of shares (net of costs) - 4,713 11,654
New long term loan - 900 900
New finance leases - 4 7
Capital element of long term loan (7) - (29)
payments
Capital element of finance lease (17) (5) (10)
payments
------------ ------------ ------------
Net cash (outflow)/inflow from financing (24) 5,612 12,522
------------ ------------ ------------
(Decrease)/increase in cash in period (2,137) 158 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 Holdings plc's issued share capital throughout the period.
Six months Six months Year to
ended ended 31
30 June 30 June December
2001 2000 2000
(restated) (restated)
#'000 #'000 #'000
Loss on ordinary activities before (3,744) (2,858) (6,851)
taxation
Goodwill amortisation 524 - 181
------ ------- --------
Loss on ordinary activities before (3,220) (2,858) (6,670)
taxation and goodwill
--------- --------- ----------
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, although it included an
explanatory paragraph on going concern, 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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