RNS Number:0389B
World Travel Holdings PLC
26 March 2001
For immediate release, Monday 26 March 2001
World Travel Holdings plc
2000 Final Results
World Travel Holdings plc, the global travel technology and services business
today announces its trading results for the year to 31 December 2000.
Financial Highlights:
Gross travel sales of #6,187,045 (1999: #3,553,071)
Resulting commission for the year of #470,013 (1999: #269,377)
Better than anticipated loss before taxation for the year of #6.9m after
writing off all systems development costs of #2.2m
Consumer business performed well ahead of plan, handling 8,402 passengers
over the year with 61,951 registered users at year end
Cash balances higher than anticipated, at #2.4m
World Travel Holdings expects, following the proposed acquisition of
Deckchair, to become profitable in the third quarter of 2001 before the
seasonal downturn in the fourth quarter and reiterates its plans to break
even on a monthly basis before any goodwill amortisation by April 2002
Operating Highlights:
WorldTravelDirect margins now over 10 per cent.
Fare 1 now launched in the US
NetFaresOnline, Travac, Online Travel Agency (HK) acquired after the year
end. uTravel acquired during 2000
Proposed acquisition of Deckchair.com Holdings Limited announced today
Commenting on the results for the year, Jonathan Biles, Chief Executive of
World Travel Holdings plc, said:
"I am delighted by the progress the Group has made during the year. The
flotation on AIM has given us the opportunity to broaden our shareholder base
and provided us with the ability to complete a number of exciting
transactions which I believe will position the business very strongly for the
future. Current conditions mean that there are further opportunities for us
to improve profitability and volumes and we are alert to these."
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
Ben Atwell
World Travel Holdings plc
Year 2000 Preliminary Results
World Travel Holdings plc, the travel technology and services business
admitted to trading on AIM in mid September today announces its unaudited
trading results for the year to 31 December 2000.
Results
The results for the year reflect almost exclusively the trading of the
Group's consumer facing travel distribution business, WorldTravelDirect.com
and the corporate travel business also conducted under that name.
Contributions from Fare1, the Group's business to business offering, which
serves the travel agency market, will not appear until 2001.
On a quarterly basis, gross travel sales increased until the third quarter
but sales in the final quarter of the year fell, as expected, as a result of
the traditional seasonality of the business coupled with a reduction in
marketing spend. Commission for the year was #470,013 (1999: #269,377).
The results of the Group for the year show a better than expected loss figure
(after writing off the entire costs associated with the development of the
group's systems, websites and business to business services and after
charging amortisation of goodwill of #180,000) before and after taxation of
#6.85m.
At the end of the year, the Group had cash resources of #2.4m, which was
higher than anticipated. In common with other technology related companies
the Group has taken steps to significantly reduce cash outflows to attain a
cash flow neutral position without raising further equity capital or relying
on the proceeds of exercise of the Company's warrants. The acquisitions
concluded this year together with the proposed acquisition of Deckchair.com
Holdings Limited announced today assist in the achievement of this strategy
through increasing revenues with limited increases in costs.
Corporate Activity
Since the year-end the Group has 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 the Far East, and is now available to the vast majority of global travel
agents and consumers.
Agreement was reached in December with United News & Media plc to acquire the
website, and to access the customer database, of its consumer travel
business, uTravel. This transaction has generated a significant enhancement
in site usage.
In January, Travac, a leading North American consolidator was acquired. This
acquisition substantially increased the Group's off-line travel distribution
portfolio 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 which has not been marketed.
In February the Group announced the acquisition of Netfaresonline.com Inc
("NFO"). This acquisition gives the Group access to the Canadian market and
increases the range of consolidators whose fares are distributed by the Group
in North America and in the UK. It also provided an established business base
in Canada with 2,350 registered travel agency users at acquisition.
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 consolidator fares.
The Group's growth has been further enhanced with today's announcement of the
acquisition of Deckchair, as outlined in a separate circular to the London
Stock Exchange.
Consumer Distribution
The number of registered customers of our consumer facing site,
WorldTravelDirect.com, continues to grow steadily. As forecast in the third
quarter statement, gross margins improved by almost 10 per cent. in the final
quarter of the year as management focused the business on selling higher
margin products.
In the current year, the WorldTravelDirect business 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 the board
believes that the consumer business will grow at a faster rate. By combining
the strength of the Deckchair brand and marketing, led by Sir Bob Geldof's
endorsement, 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.
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. The live service for fare 1 was delayed by the slow delivery
of increased service capacity by the Global Distribution Service to the
Group's communications centre. As stated in the third quarter review the
focus of the roll out for fare 1 has been on the US.
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 average travel agent to utilise
all the features of the fare 1 technology. The integration and consistent
display of data from a variety of sources to the agent has proved
challenging. These challenges have all been met and the level of income is
beginning to rise. Over the coming months we will be able to determine more
clearly how much profitability this market will generate for us. We will then
decide whether to focus resource on Fare 1's cutting edge technology or put
more effort behind the less sophisticated NFO product. NFO, which offers a
more basic service than Fare 1, principally in Canada, has achieved very
satisfactory penetration of both the consolidator and travel community.
Volume is growing strongly in this business and the Group hopes to introduce
the product to continental Europe very shortly.
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. The
Group continues to develop its offline corporate business which is performing
ahead of expectations. The acquisition of Soho Travel as part of the
Deckchair group, will further that policy. The unique Trident software has
now been delivered by its suppliers and is undergoing acceptance testing. It
is anticipated that this will be rolled out to users shortly.
Prospects
The Board remains confident that the distribution of fares to the travel
agent through fare 1 and NFO will prove an invaluable service to the travel
agent and is still one which no other organisation is able to replicate. The
Board expects that the levels of business that will develop from the
registered agent base over the coming months will continue to increase.
The Board also believes that the Group's consumer business will develop
strongly and remain a significant proportion of the Group's revenues.
The Board continues to explore opportunities to expand its current services
and in the current climate there is a steady flow of opportunities, the
benefit of which the Group will exploit on a selective basis.
Jonathan Biles, chief executive, said: "The key to our success is in
achieving volumes. We have built a market-leading system which can handle the
corporate customer, the travel agent market and the retail market without
compromising one with the other. Now the task is to boost throughput in the
most effective way. We are effectively backing three winners, which gives us
great confidence as the market consolidates."
- 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
Ben Atwell
Notes to Editors:
World Travel Holdings plc
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.com Inc, 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 in
Canada. This service is shortly to be launched in France;
Online Travel Agency Limited, 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
Preliminary unaudited results
For the year ended 31 December 2000
Profit and loss account
Unaudited Audited
2000 1999
#'000 #'000
Gross Travel Sales
Continuing operations 5,879 1,454
Acquisitions - 1,151
5,879 2,605
Discontinued 308 948
6,187 3,553
Turnover
Continuing operations 452 110
Acquisitions - 72
452 182
Discontinued 18 87
470 269
Cost of Sales (100) -
Gross Profit 370 269
Selling and distribution costs (1,945) (138)
Goodwill amortisation (181) (318)
Impairment of fixed assets (150) -
Other Admin expenses (5,035) (1,851)
Admin expenses (5,366) (2,169)
Operating loss
continuing (6,590) (1,968)
acquisitions (351) (55)
discontinued - (15)
(6,941) (2,038)
Profit on sale of discontinued activities - 72
Loss on disposal of Fixed Assets (13) -
Profit before interest and taxation (6,954) (1,966)
Finance income/ (charge) 103 (4)
Loss before taxation (6,851) (1,970)
Taxation - (3)
Loss after taxation being retained loss (6,851) (1,973)
Basic and diluted loss per share before goodwill (13.26) (3.91)
amortisation
Basic and diluted loss per share after goodwill (13.62) (4.66)
amortisation
Preliminary unaudited results
For the year ended 31 December 2000
Balance Sheet
Unaudited Audited
2000 1999
#'000 #'000
Fixed Assets
Intangibles - Goodwill 3,447 92
Tangible assets 2,112 81
5,559 173
Current Assets
Debtors 989 912
Cash at bank and in hand 2,460 93
3,449 1,005
Creditors: amounts falling due within one year (2,156) (2,625)
Net current liabilities 1,293 (1,620)
Total assets less current liabilities 6,852 (1,447)
Creditors: amounts falling due
after more than one year (829) (5)
Net assets 6,023 (1,452)
Capital and reserves
Called up share capital 569 302
Share premium 7,560 48
Shares to be issued 1,987 48
Capital Reserve 4,763 178
Profit and loss account (8,856) (2,028)
Shareholders' funds 6,023 (1,452)
Preliminary unaudited results
For the year ended 31 December 2000
Consolidated Cash Flow Statement
Unaudited Audited
2000 1999
#'000 #'000
Net cash (outflow)/inflow from operations (7,705) 285
Returns on investments and
servicing of finance 103 (4)
Taxation - (3)
Net cash outflow from capital expenditure
and financial investments (2,518) (48)
Acquisitions and disposals 98 (300)
Financing (10,022) (70)
Net cash inflow/(outflow) from financing 12,522 (5)
Increase (decrease) in cash in period 2,500 (75)
Preliminary unaudited results
For the year ended 31 December 2000
Notes to the Financial Statements
2000 1999
#'000 #'000
Gross Travel Sales
continuing 5,879 1,454
acquisitions - 1,151
discontinued 308 948
6,187 3,553
2. The admin expenses for the year ended 31 December 2000 include accelerated
depreciation of #150,000 in respect of the freehold property following a review
by the directors of the current market value of the property at the year end.
3. Provision for taxation has been made assuming current rates of Corporation
Tax base upon the estimated rate of taxation for the year.
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 Holdings plc's issued share capital
throughout the reported period.
2000 1999
#'000 #'000
Loss on ordinary activities after tax (6,851) (1,973)
Goodwill amortisation 181 318
Loss on ordinary activities after tax before goodwill (6,670) (1,655)
Weighted average number of shares (000's) 50,296 42,373
Fixed Asset Movement
Plant,
Equipment
Freehold and motor Total
Property vehicles
Cost #'000 #'000 #'000
At 1 January 2000 3 92 95
Additions 1,970 668 2,638
Disposals (3) (172) (175)
At 31 December 2000 1,970 588 2,558
Depreciation
At 1 January 2000 1 13 14
Additions 218 259 477
Disposals (1) (44) (45)
At 31 December 2000 218 228 446
Net Book Value
At 1 January 2000 2 79 81
At 31 December 2000 1,752 360 2,112
Reconciliation of operating loss to operating cash flows
2000 1999
#'000 #'000
Operating loss (6,941) (2,038)
Depreciation and amortisation of goodwill 658 327
Increase debtors (59) (381)
(Decrease)/increase creditors (1,363) 2,377
(7,705) 285
Analysis of cash flows
2000 1999
#'000 #'000
Returns on investment and servicing of finance
Interest Paid (28) (4)
Interest received 131 -
103 (4)
Capital expenditure and financial investment
Purchase of tangible fixed assets (2,604) (48)
Sale of plant and machinery 86 -
(2,518) (48)
Acquisitions and disposals
Purchase of subsidiary undertaking - (251)
Net cash balances acquired with subsidiary 98 (49)
98 (300)
Financing
New finance leases 7 -
New long term loan 900 -
Capital element of finance lease rental payments (10) (5)
Capital element of longterm loan payments (29) -
Issue of ordinary share capital 11,654 -
12,522 (5)
Reconciliation of net debt
At At end of period
beginning Cashflow Loans
of period
#'000 #'000 #'000 #'000
Cash in hand, at bank 93 2,367 - 2,460
Overdrafts (165) 131 - (34)
Hire Purchase (7) 2 - (5)
Longterm loan - - (871) (871)
(79) 2,500 (871) 1,550
Reconciliation of equity shareholders' funds and movements in reserves
Share Shares Capital Profit Shareholders'
Share Premium to be Reserve and funds
Capital account issued loss Total
account
#'000 #'000 #'000 #'000 #'000 #'000
At 1 302 48 48 178 (2,028) (1,452)
January
2000
Shares 165 6,904 - 4,585 11,654
issued
Shares
issued in
respect
of 102 608 1,939 2,649
acquisitions
Exchange 23 23
rate
reserve
Retained - - - - (6,851) (6,851)
loss for
period
At 31 569 7,560 1,987 4,763 (8,856) 6,023
December
2000
The financial information set out above does not comprise the company's
statutory accounts. The comparative figures for the financial year ended 31
December 1999 are extracted from the Company's admission document. The
auditors report on those accounts was unqualified and did not contain any
statement under section 237(2) or (3) of the Companies Act 1985. The auditors
have not yet reported on accounts for the year ended 31 December 2000, nor
have any such accounts been delivered to the Registrar of Companies. The
preliminary results have been prepared on the basis of the accounting
policies set out in the company's 1999 statutory accounts. They also
incorporate the requirements of applicable Financial Reporting Standards
published in the year.
Copies of the companies admission document can be obtained from the
registered office of World Travel Holdings plc, World Travel House, Cardiff
Gate Business Park, Cardiff, CF23 7RB. This document was published 1
September 2000.
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