Post on 05-Jan-2016
description
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THE UK’s LEADING OPERATOR OF SPECIALIST HOLIDAY
BUSINESSES
NO
VEM
BER
20
02
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One of only three quoted UK tour operators
Three operating divisions - Camping, Hotel Breaks and Adventure Holidays
2001 turnover £192.5m - pre-tax profits £23.8m (£21.6m after goodwill amortisation and exceptional operating costs)
Consistent growth record - five years of growth in profits, eps and dividend
Aiming to grow organically and through further acquisitions
Acquired Eurosites from MyTravel plc on 30th September 2002
Further profits and dividend growth in 2002
Holidaybreak plcOVERVIEW
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Holidaybreak plcOUR RECORD (1)
Turnover Profit Before Tax*£m £m
106.4 113.5
142.4164.5
192.5
80.0
100.0
120.0
140.0
160.0
180.0
200.0
1997* 1998 1999 2000 2001
11.214.0
17.3
20.723.8
5.0
10.0
15.0
20.0
25.0
1997** 1998 1999 2000 2001
*12 months pro-forma* Before goodwill amortisation
and exceptional operating costs
COMPOUND GROWTH17%
COMPOUND GROWTH15%
**12 months pro-forma
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Holidaybreak plcOUR RECORD (2)
Earnings per Share* DividendPence Pence
21.626.8 29.3
34.038.1
10.0
15.0
20.0
25.0
30.0
35.0
40.0
1997** 1998 1999 2000 2001
11.5 12.514.0
16.018.0
5.0
10.0
15.0
20.0
1997 1998 1999 2000 2001
**12 months pro-forma* Before goodwill amortisation and exceptional operating costs
COMPOUND GROWTH12% COMPOUND GROWTH
12.5%
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UK travel industry overview
Our businesses
Common characteristics of Group companies
Financial information
Current trading and prospects
Holidaybreak plcTOPICS COVERED
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Consumers - more knowledgeable, more demanding, less brand loyal
Independent and tailor-made holidays increasingly favoured
Increase in multiple holiday taking and short breaks (domestic and overseas)
‘Grey’ market increasing in importance Other growth areas are long-haul and activity/
special interest Late booking trends partly driven by bargain hunting
and partly by lifestyle changes and more frequent travel
UK Holiday SectorCONSUMER TRENDS
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Four major players in UK: Thomson (TUI/Preussag), My Travel (Airtours), Thomas Cook (C&N) and First Choice - 70% share of inclusive holidays sold and own 45% of high street agents. Further consolidation likely.
Vertical integration strategy exposed by recent industry trends
Many specialist operators and independent agents continue to thrive
Low cost airlines (Easyjet, Ryanair, Go etc) have challenged existing industry model and changed consumer behaviour
Distribution channels fragmenting - internet, teletext, TV channels, Off the page
UK Holiday SectorINDUSTRY DEVELOPMENTS
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Quality market leading businesses in sectors with good
growth potential
Avoid volatile, low margin, short-haul package holiday
market
Organic growth combined with ‘bolt-on’ acquisitions
to existing divisions and acquisition of travel
businesses in new sectors
Characteristics of Group businesses provide an
excellent platform for growth and acquisition template
Holidaybreak plcPOSITIONING AND STRATEGY
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Original and largest part of the Group - 54% of 2001 sales
Three market leading brands
- Eurocamp and Keycamp
- Acquisition of Eurosites (Sept 2002)
Pre-sited mobile-homes and tents on quality, third party owned camp-sites in France, Italy and seven other countries - flexible contracts
c.50% of customers non-UK (mainly German and Dutch)
Holidaybreak plc CAMPING DIVISION
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Courier and children’s activity service
Tailor made packages - any day to any day
Self-drive holidays - ferry inclusive from UK
Mainly direct sell but some retail agent sales. Internet increasingly important
Mid to upper income, family customer base
Holidaybreak plc CAMPING DIVISION
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Acquired 1995 - 30% of 2001
sales
Superbreak and Hotel Breaks
the main brands
Breaks in 1400 UK hotels
(200 in London)
No commitment allocations
Price guarantee to customers
Rail inclusive and theatre
breaks available
Holidaybreak plc HOTEL BREAKS
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60% of sales through UK travel agents - sector share 65%
Direct and internet sales growing fast (nearly 40%)
Two on-line internet booking sites - Superbreak.com (UKand Eurobreaks) and Hotelnet.co.uk (worldwide)
Accommodation only European cities programme recently launched (450 hotels/40 cities)
Holidaybreak plc HOTEL BREAKS
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Explore Worldwide and Regal Diving acquired in 2000 - 16% of 2001 sales
Explore is the UK market leader in worldwide adventure travel and largest European operator
Small groups with own tour leader - 100 countries
Scheduled flights Sells direct and through
overseas GSAs
Holidaybreak plc ADVENTURE
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Regal is the leading UK operator of scuba diving holidays
All levels catered for - Red Sea (Egypt - 80% of sales). Maldives, Caribbean, Far East growing fast
Charter flights to Red Sea, scheduled flights to other destinations
Sells direct and through specialist dive shops/centres
Holidaybreak plc ADVENTURE
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Market Leading businesses - Eurocamp, Keycamp,
Superbreak, Explore Worldwide and Regal
Growth opportunities - in all divisions
Healthy margins - much higher than sector norm
Low fixed cost commitments - flexible business models
Strongly cash generative - especially Hotel Breaks and
Adventure
Holidaybreak plcCOMMON CHARACTERISTICS
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CAMPING Eurocamp, Keycamp and Eurositescombined share c. 75% in the fullfacility, pre-sited sector in all the mainmarkets and are recognised as theleading brands in pre-sited campingand mobile-home holidays
HOTEL BREAKS Superbreak and its subsidiary brandscurrently account for over 65% of hotelbreaks booked through UK travelagents
ADVENTURE Explore Worldwide has an estimatedUK market share of 40% and is also thelargest European operator ofAdventure holidays.Regal Holidays has an estimated 25%of the UK scuba diving market
Common CharacteristicsMARKET LEADERSHIP
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CAMPING Profitable mobile-homes growing andreplacing lower margin tentsWider UK self-catering marketVolume potential in overseas markets,especially Germany
HOTEL BREAKS Short breaks a growth sectorDirect sales/internet/HotelnetNew European breaks programmeInbound
ADVENTURE Sector growing stronglyProduct development opportunitiesConsolidation in fragmented sectorOverseas markets
Common CharacteristicsGROWTH PROSPECTS
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2001 2000
CAMPING 17.2% 16.6%
HOTEL BREAKS 9.5% 9.5%
ADVENTURE 10.9% 14.1%
GROUP 12.7% 13.4%
Common CharacteristicsHEALTHY OPERATING MARGINS
Adventure margin in 2000 shows part year only, following acquisitions
Holidaybreak margins are well above industry norms and compare favourably with charter air package operators
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CAMPING No commitments to travel costsNo site ownershipFlexible camp-site contracts allow flexing of capacityto match demand and ensure healthy load factors
HOTEL BREAKS No commitments to hotel rooms (sale or returnallocations)Consistent gross margin (30%)No commitments to travel costsTravel agency commissions (av. 14.5%) linked to sales
ADVENTURE Scheduled air seats – no commitments (except Regal)Overseas operational costs almost all variableTours only run if target load factors achievedTours added if demand warrants
Common CharacteristicsLOW FIXED COSTS
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CAMPING Substantial but flexible capexrewarded by rapid payback
HOTEL BREAKSAND
ADVENTURE
IT and office capex onlyNegative working capitalYear round positive cash flowStrong cash generation
Common CharacteristicsCASH GENERATION
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2001 ROCE 21.7% (2000 : 20.4%)
Pre-acquisition annual capex (mainly Camping)
requirement (+ £15m net) - depreciation + £12m
2001 interest cover 8.6 times - will increase in 2002
Net currency exposure limited
Strong operational cash flow but seasonal
Headroom within banking facilities for further
acquisitions
Holidaybreak plcFINANCIALS
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Holidaybreak plc2001 PROFIT & LOSS ACCOUNT
Camping Hotel-Breaks Adventure Group£'000 £'000 £'000 £'000
Turnover 2001 103,691 57,768 31,030 192,4892000 102,357 46,054 16,107 164,518
Gross Profit 2001 35,773 10,966 9,265 56,0042000 34,703 8,742 4,863 48,308
PBIT 2001 17,833 5,466 3,375 26,6742000 17,001 4,390 2,276 23,667
All stated before exceptional operating costs and goodwill amortisationPR
ELIM
INA
RY
RES
ULTS
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£5.9m loss* entirely normal (2001 : £6.7m*) *Before tax and goodwill amortisation
Hotel breaks - substantial growth at the top line- margin improvement
Adventure - pleasing sales performance following post September 11th
disruption
- reduced margins due to load factor pressures
Camping - similar loss to 2001 Interest charge down Substantial net debt reduction
Holidaybreak plcHALF-YEAR RESULTS
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Camping sales 6% up
Hotel Breaks over 30% up, margins improved
Adventure sales 3% up, but margins have suffered
Confident that ‘upper end of market expectations’
will be met
Preliminary Results announcement December 5th
2002
Generally positive outlook for 2003 although some
caution due to political and economic uncertainties
Holidaybreak Performance & Prospects2002 TRADING UPDATE - 04/09/02
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Holidaybreak businesses and sector in which they operate have generally proved resilient in the past
Camping sales currently level with 2002 - early in booking cycle
Hotel Breaks sales 35% ahead - UK consumer demand still healthy
Adventure sales up 9% - Middle East situation causing some concern
Strong first half anticipated
Holidaybreak Performance & ProspectsOUTLOOK FOR 2003 - 30/09/02
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Eurosites brand plus Dutch, German and Danish sales agencies
2,770 mobile-homes (av age: 3.6 years) and 1,399 tents plus equipment (H/break: 7,372 mobiles and 6,698 tents)
Eurosites in 2002:- Sales £27.1m and estimated operating profits of £3.7m
- 35,000 bookings (c.150,000 pax)
- Used 86 camp-sites in France, Italy, Spain, Germany, Holland and
Luxembourg of which 54 were also used by Eurocamp and/or Keycamp
Distribution agreement with MyTravel UK retail (Going Places/Travelworld)
Database of 150,000 customers and c.1m enquirers
Acquisition of EurositesTRANSACTION DETAILS
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Relatively new mobile-home fleet
Holidaybreak now the only serious player in tent
holidays
Ability to manage sector capacity levels to ensure
healthy occupancy at sensible prices
Access to pitches
Cost efficiencies - elimination of duplicated costs/economies of scale
Acquisition of EurositesBENEFITS (1)
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Purchasing benefits - transport operators, camp-
sites, manufacturers etc
Enhanced UK retail distribution
Eurosites the only substantial direct competitor in
Germany and Denmark
Office in Copenhagen will be retained and used for
all Holidaybreak brands
Acquisition of EurositesBENEFITS (2)
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Operate Eurosites as stand alone business for summer 2003
Immediately combine overseas operation
Transfer UK business operation from Accrington to Northwich at end of 2002
Similar transfers in Germany and Holland(but keep office in Denmark)
Various options for 2004- continue with current positioning
- reposition Eurosites brand- consolidate into Eurocamp and Keycamp- combination of the above
Acquisition of EurositesSTRATEGY AND INTEGRATION
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Quality market leading businesses in attractive sectors with
good prospects for growth and also good defensive qualities
Consistent record of earnings and dividend growth -
strongly cash generative
Further profits growth in 2002 expected
Holidaybreak well placed to benefit from current holiday
sector trends - very strong cash generation a key
characteristic of the business
Recent acquisition of Eurosites is significantly earnings
enhancing
We view the future with confidence
Holidaybreak plcSUMMARY