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The UK’s Leading Operator of Specialist Holiday Businesses

The UK’s Leading Operator of Specialist Holiday Businesses. TODAY’S PRESENTATION. MAJOR DEVELOPMENTS SINCE 02/12/04 (PRELIM RESULTS). MARKET Tsunami disaster January trading period HOLIDAYBREAK Acquisitions of Bookit (BRC) and Djoser AGM Statement – Trading update On-line sales growth.

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The UK’s Leading Operator of Specialist Holiday Businesses

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  1. The UK’s Leading Operator of Specialist Holiday Businesses

  2. TODAY’S PRESENTATION

  3. MAJOR DEVELOPMENTS SINCE 02/12/04 (PRELIM RESULTS) • MARKET • Tsunami disaster • January trading period • HOLIDAYBREAK • Acquisitions of Bookit (BRC) and Djoser • AGM Statement – Trading update • On-line sales growth

  4. TRAVEL INDUSTRY TRENDS Consumer holiday trends -shorter more frequent - later bookings - more independent/tailor made/flexible - holidays with purpose (activity/special interest) TRAVEL Internet Low cost airlines Vertically integrated model declining Specialists prospering

  5. GROUP STRATEGY • Specialist holiday businesses • Market leadership • Industry leading margins • Cash generationand dividend payout • Flexible cost structures • Organic growth • Supported by complementary acquisitions

  6. THREE OPERATING DIVISIONS ADVENTURE HOTEL BREAKS CAMPING *Pro-forma 2004 sales (TTV)including recent acquisitions £63.0m* (19%) £63.0m*(19%) £150.6m*(45%) £150.6m* (45%) £123.2m(36%) £123.2m (37%)

  7. HOTEL BREAKS DIVISION ACQUISITION OF BOOKITMARK WRAY

  8. Hotel Breaks2005 TRADING AND OUTLOOK • Sales: +7% (as at 10/02/05)(excludes impact of acquisition) • Strong performances by: - London Theatre Breaks- European breaks (Cities and Beach) • 2005/6 UK brochures launched - Hotel choice increased- Product developments • New affiliate relationships

  9. Hotel BreaksDIVISIONAL STRATEGY • Increase distribution reach (NB. Bookit) • Product development • Increase range and value proposition of hotel relationships • Maintain/reduce overhead cost ratios

  10. Hotel Breaks2004 SALES (Pro-forma: TTV) London - 28% Other UK - 46% Bookit - 20% Overseas - 6%

  11. ACQUISITION OF BOOKIT • The leading on-line intermediary for short stay leisure breaks in the Netherlands • Completion - 21 December 2004 • Acquired for €33.5m (£23.1m) • Paid in cash from existing bank facilities

  12. Bookit MARKET BACKGROUND • Favourable economic context for leisure break growth • 50% of Dutch domestic holidays short stay (1-3 nights) • Hotels : 7m leisure nights / €550m expenditure (2003) • Bungalows/Summerhouses : 28m leisure nights / €1bn expenditure (2003) • 76% (12.3m) of Dutch population on-line. • - Broadband take up > 30%

  13. BookitKEY INVESTMENT ATTRACTIONS • Market leading internet sites for leisure breaks – advanced and scaleable web infrastructure • High brand recognition and customer loyalty (50% repeats) • E-mail database - 900,000 households • Strong- Supplier relationships - Management team (staying with business) - Growth record (top and bottom line) • Potential for - Product ‘stretch’ - Add Superbreak product - New market penetration

  14. BookitPRODUCT • - - Min 2 nights • - - 1 night • - - Chalets/ • summerhouses/ • mobile-homes • 700 hotels / 150 bungalows in Netherlands (70%), Belgium and Germany

  15. BookitBUSINESS MODEL • Accommodation providers load rooms and prices online • Good availability at excellent prices (average booking lead time - 18 days) • Bookit commission income derived from: - Commission (8-12%)/fixed fee - Customer booking fee • Additional income from ‘sign on’ fees and overrides • Hotel collects full payment and Bookit invoices monthly (ability to invoice earlier)

  16. BookitMARKETING/DISTRIBUTION • 85% bookings on-line • Brand awareness: 1st ranked internet leisure site (Jan 05) • Search engine optimisation and online advertising • E-database (900,000 households) • Competitive prices • Operational excellence

  17. BookitFINANCIAL RECORD

  18. Bookit2005 OUTLOOK • All three brands/sites performing strongly • Bungalows growing fastest – av. commissions expected to increase • Capacity availability good • Integration going well • Overhead costs under control • 40 weeks of year to 30/09/05 to be included

  19. BookitSTRATEGY AND OPPORTUNITIES • Stand Alone Business • More contracted product: Hotels; Bungalows • Product stretch: Luxury and family hotels; Campsites • German market • With UK Parent: • London & provincial product • Access to theatre/concert tickets • European product range • Expand European accommodation portfolio • Resource for development: • Capex • Organic start-ups • Acquisitions

  20. ADVENTURE DIVISION ACQUISITION OF DJOSERSIMON TOBIN

  21. Adventure2005 TRADING AND OUTLOOK • Divisional sales (@ 10 Feb 2005 excluding acquisition) • Division +22% • Explore +25% • Regal + 3% • No evidence of post-Tsunami downturn • Explore sales intake strong across all markets • Regal seeing late demand to Red Sea and Caribbean • On-line booking 20% +

  22. AdventureDIVISIONAL STRATEGY • Market leadership in European “Soft Adventure” sector • New product development drives growth • On-line business grows to 50% in 3 years • Broaden awareness of sector to wider audience

  23. Adventure Holidays Division2004 SALES (Pro-forma) Djoser 41% Explore UK 46% RegalDive 9% Explore Overseas Agents 4%

  24. ACQUISITION OF DJOSER • Market leading Dutch ‘soft adventure’ holiday operator • Announced – 23 December 2004 • (Completion – 19 Jan 2005) • Acquired for €22.75m (£15.7m) • Paid in cash from existing bank facilities

  25. Djoser MARKET BACKGROUND • Dutch economic environment improving • Great tradition of Dutch exploratory travel • Activity sector grows as per UK • 76% of Dutch population on-line • Long-haul market growth • Soft Adventure sector – circa 75k customers

  26. Djoser KEY INVESTMENT ATTRACTIONS • Djoser – market leader in Holland • Familiar business model • High brand awareness (4th most recognised in NL) • Synergistic benefits with Explore • Pioneering on-line activity in sector • Potential for development in other European countries • Experienced management team (staying with business)

  27. DjoserPRODUCT Tour Destinations (2005)

  28. DjoserBUSINESS MODEL • Small group package (air & land content) • Overseas suppliers / Agents • Trained & Experienced Tour Leaders • Gross margins @ 25% • Yield management controls margins • Marketing led – outsourcing of IT / Technology

  29. DjoserMARKETING/DISTRIBUTION • 65% of bookings on-line • High Brand awareness (1st specialist) • Direct to consumer – no Agency / Intermediary • Database 350k • Unique public “Brand” persona – shows, exhibitions

  30. DjoserFINANCIAL RECORD

  31. Djoser2005 OUTLOOK • Sales intake since acquisition on track • No post-Tsunami downturn • New “Junior” programme encouraging start • Integration with Explore on track • Financial controls in place

  32. DjoserSTRATEGY AND OPPORTUNITIES • New product development drives growth • Explore & Djoser develop synergistic plan • Marketing – share resources • Product Development – leverage Explore expertise • Web – leverage Djoser expertise • Overseas Suppliers – leverage buying power • Expand to Germany

  33. The UK’s Leading Operator of Specialist Holiday Businesses TRADING UPDATE & CAMPING

  34. TRADING UPDATE – 10 FEBRUARY 2005 • AS AT 10 FEBRUARY 2005 • Hotel Breaks: +7% • Camping: – 9% (overall capacity reduced by 12%) • Adventure: +22% • Recent acquisitions (Bookit and Djoser) trading in line with management expectations • Year on year comparatives exclude recently acquired businesses

  35. Camping2005 TRADING AND OUTLOOK • Sales: -9% (as at 10/02/05) - UK travel agents and Germany below expectations- UK directs and Easycamp performing well - Low season challenges • Capacity: Mobile-homes: –11% (9,700) • Tents: –14% (4,200) • Operational / overhead cost reduction : £3m+ • Eventual outturn sensitive to sales intake over remainder of season as main camp-site costs (depreciation and site fees) now fixed

  36. CampingDIVISIONAL STRATEGY • Capacity requirements (overall and regional) reviewed in light of 2005 trading • Continuing focus on stabilising occupancy rates, optimising yields and maintaining/improving margins • Ongoing cost review • E-commerce channel and affiliate relationship development to target new customer groups • Strategic review ongoing prior to detailed 2006 planning

  37. Holidaybreak plcCORPORATE CALENDAR • Shares ex-dividend: 16 March 2005 • Interim Results – 19 May 2005 • Trading update – mid-September • Preliminary Results – 1 December 2005 (provisional)

  38. The UK’s Leading Operator of Specialist Holiday Businesses QUESTIONS

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