RNS Number:4116P
World Travel Holdings PLC
2 January 2002
World Travel Holdings plc
Third quarter results 2001
World Travel Holdings plc, the AIM listed travel technology and services
company today announces its trading results for the three months to 30
September 2001.
Financial Highlights
* Gross travel sales #8.7m, a four-fold increase against corresponding
period last year
* Resulting commission up over 500 per cent. against third quarter 2000 to
#0.9m
* Gross margins across the Group increased to 9.8 per cent. from 7.1 per
cent. in corresponding period last year
Operating Highlights
* Deckchair business was fully integrated during the period
* flights.com business was acquired during the period
* Acquisition of Aerotech Systems Europe was completed in December 2001
* Fund raising from a Placing and Open Offer of #1.5m and #0.5m
respectively was satisfactorily concluded in December 2001
Quarterly operating progress
Progress achieved over the last year is shown by a comparison of operating
performance for the third quarters of 2001 and 2000:
Q3 2001 Q3 2000
#'000 #'000 Improvement
Gross Travel Sales 8,728 1,862 369%
Turnover 858 133 545%
Cost of sales, selling and (182) (533) 66%
distribution costs
Administration costs (1,544) (1,055) -46%
Operating loss* (868) (1,455) 40%
*The operating loss shown is before interest, impairment of fixed assets and
investments and goodwill amortisation.
Commenting on the results, John Biles, Executive Chairman of World Travel
Holdings plc, said:
"These results show the continuing progress we were making through the third
quarter. After the events of September 11 in New York we have adjusted our
business and cost base to deal with the current level of sales and are
encouraged by the renewed progress we are making towards profitability."
World Travel Holdings plc
Interim Results for the three months ended 30 September 2001
World Travel Holdings plc, the AIM listed travel technology and services
business, today announces its trading results for the three months ended 30
September 2001.
CHAIRMAN'S STATEMENT
The attached results reflect the steady progress that was being made towards
profitability by increasing sales, controlling costs and reducing losses and
the associated cash burn.
The swingeing cuts in costs which the Board was obliged to make in the
aftermath of the September 11 atrocities are now beginning to show their
intended effect in terms of renewed reduction of cash outflow and further
reductions in losses.
The success of our placing and open offer and the support that we have had
from our existing and some new shareholders confirms the Board's confidence in
the future of the group.
All parts of the business are still operating at lower levels than prior to
September 11 but there are signs of improvement, particularly in the Group's
US and Canadian operations.
Results
In the quarter to September 2001, gross travel sales increased more than
four-fold to #8,728,000 (2000: #1,862,000) and turnover (being largely
commission income) increased by more than 500 per cent over the same period
last year to #858,000 (2000: #133,000). Gross margin in the quarter improved
to 9.8 per cent from 7.1 per cent. as the Company continued its focus on
delivering higher margin business to its customers.
The results of the Group for the quarter show a loss of #868,000 (2000: #
1,455,000) before goodwill amortisation, impairment of fixed assets and
investments and finance charges. The loss before and after taxation was #
1.26m. (2000: #1.42m).
At the end of the quarter, the Group had cash of #0.6m. As reported in Note 7
to the financial statements, the Company raised #2 million of additional
equity after the end of the quarter and this should be adequate for the
Board's base case for future trading.
Corporate Activity
During the quarter the Group announced the acquisition of the travel business
of Flights.com. The Flights.com business, 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 in five languages
net priced discounted air fares from over 34 different countries. The main
markets for Flights.com are the United States and Germany but there are also
significant sales in the rest of the world through the network of fulfillment
partners which is being built. The bulk of the business and the technology
platform have now been relocated to the Group's facilities in Cardiff and New
York. The work of integrating and upgrading the Group's global net fares
database to a common platform in Toronto, New York and the UK is well
underway. This major conversion should be completed at the end of Q1 2002 and
will result in a substantial improvement in the functionality with significant
savings in operating and maintenance costs.
The acquisition of Aerotech Europe Limited, the Group's primary technology
supplier, was announced and completed after the end of the quarter. Despite
delays being experienced from customers in confirming their orders, there are
signs that customer interest is picking up.
Consumer Distribution
We now operate two distinct web based consumer travel businesses, Deckchair
and flights.com. Deckchair, with the active involvement and endorsement of Bob
Geldof, is focused on the UK leisure market whilst Flights.com is aimed at the
global discount fares market. The improvement in functionality which will come
from bringing these sites on to a common technology platform should enable
both businesses to grow without significant marketing spend.
Trade Distribution
Netfaresonline, our Canadian based net fare distributor continues to make
steady progress and now supplies a number of the major travel agency chains in
Canada with fares from Canada's leading consolidators in addition to its
traditional business with independent travel agents. The Board plans to
develop this successful business model in the US and the UK.
Travac, our US-based net fare distributor based in Manhattan, had a
particularly difficult time in the period immediately following September 11.
Business is slowly returning to normal and the Board is anticipating a full
recovery in 2002.
Prospects
The fourth quarter of 2001 has been severely disrupted by the changes in
global travel patterns since 11 September and December was, as is normal, a
seasonally weak month.
The Directors continue to monitor closely the levels of trading which the
various parts of the Group are achieving. The Board is hopeful that the usual
seasonal improvement will take place in the New Year but if the recovery is
not as strong as anticipated then further steps will be taken to ensure that
the cost base of the Group's operations is aligned to the actual level of
revenue.
The Board is encouraged by the progress which is being made towards
profitability by the Group's operations.
Consolidated Profit and Loss Account
Notes 3 months to 9 months to Year to
30 September 30 September 31
2001 2001 December
2000
#'000 #'000 #'000
Gross Travel Sales 2
Continuing:
Ongoing 2,168 6,321 5,879
Acquisition 6,560 12,646 -
Discontinued operation - - 308
Gross Travel Sales 8,728 18,967 6,187
Turnover
Continuing:
Ongoing 166 508 452
Acquisition 692 1,260 -
Discontinued operation - - 18
Turnover 858 1,768 470
Cost of Sales - (31) (100)
Gross profit 858 1,737 370
Selling and distribution (182) (695) (1,945)
costs
Administrative expenses
General administrative (1,544) (4,496) (5,035)
expenses
Impairment of fixed 4 - (469) (150)
assets
Impairment of investment 5 - (116) -
Goodwill amortisation (386) (910) (181)
Operating loss
Continuing
Ongoing (1,313) (4,598) (6,590)
Acquisition 59 (351) (351)
Discontinued - - -
Operating loss (1,254) (4,949) (6,941)
Loss on disposal of fixed - - (13)
assets
Loss before interest and (1,254) (4,949) (6,954)
taxation
Interest (payable)/ (9) (58) 103
receivable
Loss being retained loss (1,263) (5,007) (6,851)
Basic and diluted loss per 3 (1.32)p (6.65)p (13.26)p
share before goodwill
amortisation
Effect of goodwill 3 (0.58)p (1.48)p (0.36)p
amortisation
Basic and diluted loss per 3 (1.90)p (8.13)p (13.62)p
share after goodwill
amortisation
Consolidated Balance Sheet
30 September 30 September 31 December
2001 2000 2000
#'000 #'000 #'000
Fixed Assets
Intangible assets 7,937 3,629 3,447
Tangible assets 890 2,150 2,112
8,827 5,779 5,559
Current Assets
Debtors 2,348 2,086 989
Cash 612 7,165 2,460
2,960 9,251 3,449
Creditors: amounts falling due within
one year - - -
(6,439) (4,313) (2,156)
Net current assets (3,479) 4,938 1,293
Total assets less current liabilities 5,348 10,717 6,852
Creditors: amounts falling due after
more than one year - (844) (829)
Net assets 5,348 9,873 6,023
Capital and reserves
Called up share capital 663 569 569
Share premium account 7,382 8,865 7,560
Shares to be issued 6,390 1,987 1,987
Capital reserve 4,763 4,763 4,763
Profit and loss account (13,850) (6,311) (8,856)
Shareholders' funds 5,348 9,873 6,023
Consolidated Cashflow Statement
Notes 3 months 9 months Year
to to to
30 30 31
September September December
2001 2001 2000
#'000 #'000 #'000
Net cash outflow from operating activities (234) (1,539) (7,705)
Returns on investment and servicing of
finance
Interest received - 8 131
Interest paid (9) (66) (28)
(9) (58) 103
Capital Expenditure
Purchase of tangible fixed assets (106) (176) (2,604)
Sale of tangible fixed assets 1,400 1,400 86
1,294 1,224 (2,518)
Acquisitions and disposals
Net cash balances acquired with subsidiary
undertaking - 237 98
Purchase of subsidiaries - (902) -
- (665) 98
Net cash outflow before financing 1,051 (1,038) (10,022)
Financing
Net proceeds from issue of shares - - 11,654
New long term loan - - 900
Repayment of long term loan (891) (891) -
New finance leases - - 7
Capital element of long term loan payments - (7) (29)
Capital element of finance lease payments - (17) (10)
(891) (915) 12,522
Increase/(decrease) in cash 160 (1,953) 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 group is engaged in one class of business, the sale of
travel products and services. These activities are predominantly
undertaken in the UK and the USA
The sale of travel products and services which are transacted in the
UK is recognised at the time of the booking. The sale of travel
products and services which are transacted in the USA is recognised on
the date of travel.
3 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.
4. The exceptional impairment loss on fixed assets recognised in
the second quarter is in relation to the loss on the disposal of
freehold property the sale of which was completed during the course of
September 2001.
5. The exceptional impairment loss on investments recognised in
the second quarter is in relation to the costs of investment of Fare 1
Asia, which has ceased operations.
6. 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, Llanmaes, St Fagans, Cardiff, CF5 6DU.
7. Subsequent Events
The Company has completed the acquisition of Aerotech Europe Limited
for a total consideration of #635,000 satisfied by the issue of 25.4
million New Ordinary Shares.
The Company has completed an additional fund raising. A total of #2
million was raised by the issue of 83.7 million New Ordinary Shares
through a placing and open offer.
3 January 2002
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