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INTERIM RESULTS 2003

INTERIM RESULTS 2003. 8 May 2003. Interim Announcement 2003 HALF-YEAR RESULTS. Half-year loss is entirely normal - higher figure in 2003 of £7.2m (2002 : £5.9m) due to Eurosites acquisition Losses in “old” Camping business similar to 2003

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INTERIM RESULTS 2003

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  1. INTERIM RESULTS 2003 8 May 2003

  2. Interim Announcement 2003HALF-YEAR RESULTS • Half-year loss is entirely normal - higher figure in 2003 of £7.2m (2002 : £5.9m) due to Eurosites acquisition • Losses in “old” Camping business similar to 2003 • Hotel Breaks sales and profits have continued to grow strongly - small margin improvement • Adventure sales slowed after excellent first quarter but stillup at the half-year • Higher interest charge - increased debt levels post-acquisition • Dividend up to 6.0p (2002: 5.9p)

  3. Interim Announcement 2003CURRENT TRADING AND PROSPECTS • A difficult year for the overseas travel trade • Resilient businesses and loyal customers • Camping 9% behind year on year but now beginning to make headway • Hotel Breaks continuing to trade strongly - favourable environment • After a strong start Adventure adversely affected by Iraq war and SARS scare • Recent booking trends encouraging

  4. Interim Results 2003PROFIT AND LOSS ACCOUNT All stated before goodwill amortisation and exceptional operating costs

  5. Interim Results 2003P & L ACCOUNT - DIVISIONAL ANALYSIS All stated before goodwill amortisation and exceptional operating costs

  6. Interim Results 2003CAMPING • Interim loss at same level as 2002 on like for like basis - pro-rata apportionment of normal fixed overhead and marketing costs • All sales fall into the second half • Eurosites losses £1.3m • Exceptional reorganisation costs of £1.3m

  7. Interim Results 2003HOTEL BREAKS • Revenue up 23% on 2002 (first 6 four weekly accounting periods) to £36.6m • Operating profit increased to £3.6m (+25%) • Exceptional year on year growth in first month (9/11 impact in October 2001) but consistently strong sales figures since • Another strong cash generative performance

  8. Interim Results 2003ADVENTURE • First quarter sales up 22% continuing post 9/11 recovery pattern - good load factors achieved • Second quarter sales down 6% as Iraq war fears increased - load factors under pressure • Overall revenues 9% ahead of 2003 for first half • Operating profit for first half £1.2m (2002 : £1.1m)

  9. Interim Results 2003ACQUISITIONS • Acquisition of Eurosites from MyTravel completed 30 September 2002 • Increased half-year losses and cash outflow • Reorganisation and exceptional costs • Eurosites operating normally in summer 2003 • Acquisition of Bridge Britain/LTS from MyTravel completed 7 March 2003 • Consideration of £2.0m • No material trading in the period • Brand strategy and goodwill

  10. Interim Results 2003BALANCE SHEET

  11. Interim Results 2003FINANCE • £140m syndicated bank facilities arranged at the time of the Eurosites acquisition • Headroom available for further investment • Seasonal cashflow adversely impacted by Eurosites acquisition but business remains strongly cash generative • Interest cover will decline in 2003 but will rapidly rebuild as debt is paid down

  12. Interim Results 2003CASH FLOW (six months to 31 March 2003)

  13. UK Travel Sector EXTERNAL EVENTS • Terrorist threats • Iraq war • SARS • Economy

  14. UK Travel Sector SECTOR DEVELOPMENTS • Consumers hold back from summer holiday commitments - particularly families • Many destinations suffering badly (Eastern Mediterranean, Middle East, Asia) • Late surge for Easter again illustrated late booking trend and market resilience • Signs that low cost airline growth may be flattening out but consumer expectations and behaviour have changed forever • Big four operators say summer 2003 capacity significantly reduced

  15. CampingCURRENT TRADING AND PROSPECTS • Year on year sales at -9% • Over 80% of target sales now achieved • Capacity fixed at -3% • Mobile-homes : + 6% • Tents : - 17% • Non UK sales (Holland, Germany, Switzerland etc) improving since end of war • UK sales up well since Easter (w/c April 28: + 31% ) • Higher than normal levels of school holiday capacity still available • May and June expected to be strong booking months

  16. Hotel BreaksCURRENT TRADING AND PROSPECTS • Strong trading in favourable environment • consumers favouring domestic holidays • London hotel capacity • Fine spring weather in UK • Year on year sales at +21% • Overseas ‘accommodation only’ breaks nearly 200% up on 2002 (c.6% of overall sales) • Internet bookings +55% year on year (c.25% of overall sales) • Bridge acquisition will boost second half sales by 3-4% • Going Places, Legoland, London Travel Service

  17. AdventureCURRENT TRADING AND PROSPECTS • Cumulative sales at +2% • Good levels of new bookings (over 2000 in April) in part negated by need to withdraw and consolidate tours • Foreign Office “don’t travel” advice and consumer caution affecting numbers of Middle East and Asia destinations due to Iraq war and SARS • Sales and marketing efforts concentrating on Europe (19% of 2002 sales), South and Central America (23%) and Africa (15%) • Regal diving holidays performing well in difficult conditions - charter commitments reduced and demand now building

  18. MyTravelACQUISITION AND TRADING PARTNERSHIP • Two businesses acquired from MyTravel - Eurosites (September 2002) and Bridge UK (March 2003) • Distribution agreements with MyTravel retail (Going Places etc) - Hotel Breaks, Keycamp and Eurosites • Payments on schedule - Hotel Breaks on fortnightly cycle • “Disentanglement” of Eurosites from MyTravel group satisfactorily completed

  19. Holidaybreak plcSTRATEGY • Operate quality market leading businesses in travel or travel related sectors with good growth potential and low fixed cost ratios • Organic growth supplemented by carefully selected acquisitions - likely to be integrated into existing divisions - new, separate businesses also a possibility - avoid volatile, low margin, short-haul package holiday sector • Expansion of Group based on shared key characteristics

  20. Interim Results 2003OVERVIEW AND SUMMARY • Mixed fortunes for our three businesses • Summer overseas market has shown clear signs of recovery since Easter • Good deal of uncertainty remains but recent trends have been encouraging • Growth constrained by unusual market conditions • Longer term strategy unchanged

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