TIDMTT.
RNS Number : 3956E
TUI Travel PLC
10 May 2013
10 May 2013
TUI Travel PLC
("TUI Travel")
Interim Results for the six months ended 31 March 2013
14% IMPROVEMENT IN FIRST HALF RESULT - STRONG TRADING
CONTINUES
Key Financials
Underlying results(1) Statutory results
GBPm H1 13 H1 12 Change% H1 13 H1 12
Revenue 5,397 5,447 -1% 5,397 5,447
Operating loss excl
Empty Legs (274) (317) +14% N/A N/A
Operating loss (289) (317) +9% (347) (407)
Loss before tax (346) (367) +6% (404) (457)
--------------------- ------- ------- -------- --------- ---------
(1) Underlying operating loss excludes separately disclosed
items, acquisition related expenses, impairment of goodwill and
interest and taxation of results of the Group's joint ventures and
associates
Highlights
-- Interim results
* Operating loss reduced by GBP43m to GBP274m
(excluding the impact of empty leg accounting(2)
which has no full year impact). Underlying H1
operating loss of GBP289m (H1 2012: loss of GBP317m).
* UK & Nordics source markets delivered H1 revenue
growth of 5% and 10% respectively. UK underlying
operating loss reduced by GBP22m to GBP103m(2) and
Nordics operating profit by GBP14m to GBP36m(2) .
* France operating loss reduced by GBP11m to GBP50m(2)
. Our turnaround plans continue to deliver,
offsetting difficult trading conditions in the tour
operator.
* Business improvement programme progressing to plan
with GBP17m of cost savings delivered.
* Interim dividend increase of 10% to 3.75p (H1 2012:
3.40p).
* Free cash outflow improvement of GBP233m to GBP774m.
The net debt position excluding asset-backed
financing of GBP369m (H1 2012: GBP205m) at 31 March
2013 was GBP680m (31 March 2012: GBP979m).
-- Modern Mainstream driving performance
* Unique holiday bookings in the UK, Nordics and
Germany increased by 15%, 11% and 9% year-on-year
respectively for Summer 2013.
* Direct distribution sales in the UK and Nordics for
Summer 2013 of 91% (2012: 90%) and 87% (2012: 86%)
respectively.
* Online sales account for 42% (2012: 41%) in the UK
and 68% (2012: 66%) in the Nordics.
-- Online Accommodation growth
* Accommodation Wholesaler continues to build on its
global leadership position with TTV up by 14% for
Summer 2013.
-- Strong trading momentum continues
* Summer 2013 - 58% sold with improved margins and
average selling prices in key source markets.
Significant growth in profitable market share in the
UK.
* Strong Summer 2013 sales in the UK and Nordics, up
13% and 14% respectively.
* Full year underlying operating profit growth
anticipated to be at least 10% on a constant currency
basis(3) .
Peter Long, Chief Executive of TUI Travel PLC, commented:
"Our strategy of focusing on unique holidays and putting our
customers at the heart of our business continues to deliver strong
growth. With our market leading brands and scale we have the
ability to give our customers great holiday experiences, at
terrific value, in a segment of the market that is increasing in
popularity. Our drive to Modern Mainstream is contributing
significantly to our outperformance in a number of markets where we
are achieving strong booking volumes and improved margins. Given
current trading and the visibility we have within our businesses we
anticipate full year underlying operating profit growth of at least
10% on a constant currency basis."
Investor and Analyst briefing and webcast
A presentation for analysts and investors will be held today at
9.30am (GMT) at the London Stock Exchange, 10 Paternoster Square,
London, EC4M 7LS. There will be a live audio webcast of the
presentation. Please visit www.tuitravelplc.com for more
details.
Interim Management Statement & Q3 Results
TUI Travel will issue its interim management statement and third
quarter results on Wednesday 7th August 2013.
Enquiries:
Analysts & Investors
Andy Long, Director of Strategy Tel: +44 (0)1293 645
& Investor Relations 795
Tej Randhawa, Investor Relations Tel: +44 (0)1293 645
Manager 829
Sarah Coomes, Investor Relations Tel: +44 (0)1293 645
Manager 827
Press
Lesley Allan, Corporate Communications Tel: +44 (0)1293 645
Director 790
Mike Ward, External Communications Tel: +44 (0)1293 645
Manager 776
Michael Sandler / Kate Hoare (Hudson Tel: +44 (0)20 7796
Sandler) 4133
(2) Figure excludes impact of empty leg accounting. Empty legs
relate to the cost incurred by aircraft returning from the
beginning and end of each season without customers (an empty leg of
a round trip). As a result of the change in estimate in empty leg
accounting referred to in the year-end accounts, the phasing of the
empty leg costs will change in each quarter but there will be no
full-year cost impact.
(3) Constant currency basis assumes that constant foreign
exchange translation rates are applied to the underlying operating
result in the current and prior year
CURRENT TRADING & OUTLOOK
Winter 2012/13
The Winter programme across our Mainstream markets has closed
out ahead of our expectations, reflecting a strong lates market.
The season ended with higher average selling prices, margins and
load factors across each of our key source markets.
Our unique holiday offering continues to be popular with
customers, accounting for 69% of Mainstream bookings this Winter,
up by three percentage points versus the prior year. The proportion
of holidays sold online continues to increase, accounting for 36%
of all holidays booked in Winter, up one percentage point over the
prior year.
Current Trading(1) Winter 2012/13
YoY variation% Total Total Total Risk
ASP(2) Sales(2) Customers(2) Capacity(3)
MAINSTREAM
UK +6 +5 Flat Flat
Nordics +5 +10 +5 +4
Germany +9 +3 -5 -4
France tour operators +7 -25 -29 -33
Other (4) +1 +1 Flat
Total Mainstream +6 +2 -4
SPECIALIST & ACTIVITY N/A -3 N/A
Accommodation Wholesaler (5) +7 +26 +17
------------------------------ -------- ---------- -------------- -------------
(1) These statistics are up to 5 May 2013 and are shown on a
constant currency basis
(2) These statistics relate to all customers whether risk or
non-risk
(3) These statistics include all risk capacity programmes
(4) Other includes Austria, Belgium, Netherlands, Poland and
Switzerland
(5) These statistics refer to online accommodation wholesaler
only; Sales refer to total transaction value (TTV) and customers
refers to roomnights
Summer 2013
Since our last announcement, trading across our key source
markets remains in line with our expectations. However, we remain
particularly pleased with strong trading in the UK and Nordic
markets, which continue to show double-digit revenue growth.
Average selling prices and margins across our key source markets
are up on the prior year. To date 58% of the overall Mainstream
Summer programme has been sold. In Accommodation Wholesaler and
Specialist & Activity, trading remains in line with our
expectations.
Current Trading(1) Summer 2013
YoY variation% Total Total Total Risk Only
ASP(2) Sales(2) Customers(2)
Capacity(3) Left to sell(3)
MAINSTREAM
UK +5 +13 +7 +3 -2
Nordics +5 +14 +9 +10 +10
Germany +7 +4 -3 Flat +1
France tour operators +3 -13 -15 -19 -22
Other(4) +3 +1 -2
Total Mainstream +6 +6 Flat
SPECIALIST & ACTIVITY N/A -3 N/A
Accommodation Wholesaler(5) +3 +14 +11
----------------------------- -------- ---------- -------------- ------------ ----------------
(1) These statistics are up to 5 May 2013 and are shown on a
constant currency basis
(2) These statistics relate to all customers whether risk or
non-risk
(3) These statistics include all risk capacity programmes
(4) Other includes Austria, Belgium, Netherlands, Poland and
Switzerland
(5) These statistics refer to online accommodation businesses
only; Sales refer to total transaction value (TTV) and customers
refers to roomnights
In the UK, bookings are up by 7%, ahead of a 3% increase in
capacity. Trading in the UK continues to outperform the market
according to GFK Ascent. Average selling prices are up by 5%,
partly reflecting cost base inflation of approximately 2% and the
continued increase in unique holidays. Sales of unique holidays are
up by 15% compared to the same period last year, accounting for 83%
of holidays sold to date, up by three percentage points. Customer
demand for our unique Sensatori, Couples and Holiday Village
products remains strong with bookings outperforming the prior year.
Online sales account for 42% of Summer holidays booked, up one
percentage point on the prior year. To date, 62% of the programme
has been sold.
In the Nordics, bookings are up 9% and broadly in line with
capacity growth, whilst average selling prices remain 5% ahead of
the prior year. Sales of unique holidays are up by 11% compared to
the same period last year, accounting for 95% of holidays sold to
date, up by two percentage points. In particular, strong demand for
our Blue Village and Blue Star products has resulted in customer
bookings up by 17% and 13% respectively. Online sales continue to
grow, accounting for 68% of Summer holidays booked, up by two
percentage points on the prior year. To date, 63% of the programme
has been sold.
In Germany, bookings are down by 3% with average selling prices
up 7%. Sales of package holidays are up year-on-year, however our
Overland programme continues to be down. Sales of unique holidays
remain strong and are up 9% over the same period last year
accounting for 54% of all packages sold, an increase of four
percentage points over the prior year. This has been driven by the
Summer 2013 launch of our new TUI Reisewelten labels (Beach,
Classic, Lifestyle, Nature, Premium and Scene), which have been
well received by our customers. Online sales have increased by 17%
over the period. To date 55% of the programme has been sold in
Germany.
In France, bookings are down by 15%, reflecting capacity cuts of
19%, primarily for seat-only and long-haul destinations. Whilst the
trading environment remains challenging, we continue to reshape our
programme towards more profitable destinations. To date 50% of the
programme has been sold.
In Accommodation Wholesaler, TTV is up by 14%, driven by the
Latin American and Asian markets. TTV sales for North American and
European Cities performed well against the prior year, despite a
weaker performance from Spain and Portugal driven by weak demand
from the domestic market.
In Specialist & Activity, whilst sales in North American
Specialist and Adventure are robust, trading conditions remain
challenging in a number of other segments and as a result overall
sales are down by 3% on the prior year.
Fuel/Foreign exchange
We have hedged the majority of our fuel and currency
requirements for the seasons currently on sale, which gives us
certainty of costs when planning capacity and pricing. The
following table shows the percentage of our forecast requirement
that is currently hedged for Euros, US Dollars and jet fuel.
Summer 2013 Winter 2013/14
Euro 98% 83%
US Dollars 91% 77%
Jet Fuel 90% 78%
As at 2 May 2013
------------------ ------------ ---------------
Foreign exchange translation improved the underlying operating
result by GBP1m in the first half, primarily due to the strength of
the Euro. If exchange rates remain at current levels we anticipate
that the impact on the full year will be positive.
Outlook
As the leader in our industry with a clear strategic focus based
on our tour operator and online accommodation business models, the
Group is structured internally to ensure that it is able to
optimise its growth potential and continued delivery of long-term
success and value. Mainstream, our largest Sector, has under the
leadership of Johan Lundgren been simplified into one cohesive
team. The Mainstream Board is responsible for the delivery of the
Sector's growth with clearly defined goals and accountability
across all source markets and functions. It is working to maximise
the identified opportunities arising from the scale of the
business, brand strength, long-term supplier relationships,
operational efficiencies and common KPIs. Operating the Sector in
this way is delivering and has a clear link to our continued
outperformance.
Our acceleration to Modern Mainstream is based on the pillars of
unique holidays, direct distribution and operational efficiencies
which are key components of the overall Group strategy. We are
confident that this strategy is driving performance and based on
current trading we expect to report underlying profit growth of at
least 10% on a constant currency basis for the 2013 financial
year.
BUSINESS AND FINANCIAL REVIEW
Group Performance
Six months ended 31 March 2013
Underlying results(1) Statutory results
GBPm H1 13 H1 12 Change% H1 13 H1 12
Revenue 5,397 5,447 -1% 5,397 5,447
Operating loss excl
Empty Legs (274) (317) +14% N/A N/A
Operating loss (289) (317) +9% (347) (407)
Loss before tax (346) (367) +6% (404) (457)
--------------------- ------- ------- -------- --------- ---------
(1) Underlying operating loss excludes separately disclosed
items, acquisition related expenses, impairment of goodwill and
interest and taxation of results of the Group's joint ventures and
associates
Group revenue declined by 1% to GBP5,397m (H1 12: GBP5,447m).
This result was driven by a foreign currency translation impact of
-1%. Organic revenue growth over the period was flat overall versus
the prior year.
The Group's underlying operating loss reduced to GBP289m (H1 12:
loss of GBP317m). However, this included a GBP15m impact from empty
leg accounting(2) as outlined at the FY12 preliminary results. On
an underlying basis, excluding the impact from empty leg
accounting, underlying operating loss reduced by GBP43m to
GBP274m.
Our business improvement programme is progressing to plan with
GBP17m of cost savings delivered in the period.
The main drivers of the year-on-year improvement in underlying
operating loss were:
GBPm
H1 12 underlying operating loss (317)
Trading 14
Easter 11
Business improvement 17
FX translation 1
------
H1 13 underlying operating loss (excluding empty legs) (274)
Empty leg accounting (15)
------
H1 13 underlying operating loss (289)
A reconciliation of underlying operating loss to statutory
operating loss is as follows:
H1 13 H1 12
GBPm GBPm
Underlying operating loss (289) (317)
Separately disclosed items (8) (52)
Acquisition related expenses (31) (35)
Impairment of goodwill (10) -
Taxation on profits and interest
of joint ventures and associates (9) (3)
------ ------
Statutory operating loss (347) (407)
------ ------
(2) Empty leg accounting. Empty legs relate to the cost incurred
by aircraft returning from the beginning and end of each season
without customers (an empty leg of a round trip). As a result of
the change in estimate in empty leg accounting referred to in the
year-end accounts, the phasing of the empty leg costs will change
in each quarter but there will be no full-year cost impact.
Segmental Performance
Segmental performance is based on underlying financial
information (which excludes certain items, including separately
disclosed items and acquisition related expenses).
Mainstream Sector
The Mainstream sector underlying operating loss reduced by
GBP45m to GBP235m, excluding the impact of empty leg accounting
which has no full year impact. Underlying Mainstream operating loss
in H1 was GBP250m (H1 2012: loss of GBP280m).
Mainstream H1 13 H1 12 Change
%
Customers ('000)
UK 1,472 1,460 +1%
Nordics 649 620 +5%
Germany 2,163 2,219 -3%
France 600 765 -22%
Other 1,664 1,651 +1%
------ ------ -------
Total 6,548 6,715 -2%
====== ====== =======
Revenue (GBPm)
UK 1,101 1,049 +5%
Nordics 589 535 +10%
Germany 1,525 1,561 -2%
France 411 517 -21%
Other 784 783 Flat
------ ------ -------
Total 4,410 4,445 -1%
====== ====== =======
Underlying operating (loss)
/ profit (GBPm)
UK (113) (125) +10%
Nordics 38 22 +73%
Germany (63) (61) -3%
France (51) (61) +16%
Other (61) (55) -11%
------ ------ -------
Total (250) (280) +11%
====== ====== =======
The main drivers of the year on year change in underlying
operating loss are summarised in the following table:
GBPm UK Nordics Germany France Other Mainstream
H1 12 (125) 22 (61) (61) (55) (280)
Trading 16 12 (6) - (4) 18
Easter 5 2 3 - - 10
Business improvement 1 - 3 10 2 16
FX translation - - - 1 - 1
------ -------- -------- ------- ------ -----------
H1 13 (excluding
empty legs) (103) 36 (61) (50) (57) (235)
Empty leg accounting (10) 2 (2) (1) (4) (15)
------ -------- -------- ------- ------ -----------
H1 13 (113) 38 (63) (51) (61) (250)
====== ======== ======== ======= ====== ===========
UK
The UK business delivered a GBP22m improvement in underlying
operating loss to GBP103m, excluding the impact of empty leg
accounting. Underlying H1 operating loss was GBP113m (H1 2012: loss
of GBP125m).
This improved position was driven by strong load factors and
late Winter trading as well as a focus on higher margin unique
holidays increasingly distributed online. The trading result also
included a GBP5m benefit from an earlier Easter in the second
quarter. Demand for our unique holidays remained strong over the
period, accounting for 81% of departures in H1, up two percentage
points on the prior year. We expanded a number of unique holiday
products over the Winter season, driven by customer demand,
including Couples and Splash concepts. The result also benefited
from a three percentage point increase in direct distribution to
87% compared with the prior year. Online bookings accounted for 45%
of all bookings during the first half, up two percentage points
year-on-year.
The UK business delivered GBP1m of efficiency savings towards
the business improvement programme in the period.
Nordics
Nordics achieved an underlying operating profit of GBP38m (H1
2012: profit of GBP22m). This improved position was driven by
strong trading in the tour operator and a non-repeat of the
flooding in Bangkok which adversely affected the result last year.
We remodelled our Winter programme, remixing it towards a higher
number of medium-haul destinations including the Canaries. This
improvement in profit led to a strong underlying operating margin
for the Nordic business of 6.5%.
Unique holidays accounted for 90% of departures in the first
half, in line with the prior year but masking a shift from
exclusive to higher-margin differentiated products. In particular,
there was strong demand for our Blue Couples (customer bookings up
by 78%) and Blue Star concepts (customer bookings up by 40%).
Direct distribution increased by two percentage points to 87%.
Online distribution continues to grow, standing at 64% of bookings
in H1, up three percentage points over the prior year.
Germany
Germany reported an underlying operating loss of GBP63m (H1
2012: loss of GBP61m). Excluding the impact of empty leg
accounting, underlying operating loss was flat at GBP61m. Long-haul
performed particularly well, with strong demand to Thailand, USA
and Cuba.
Unique holidays accounted for 49% of departures in H1 FY13, up
three percentage points over the prior year. Demand has been driven
by the Robinson and Sensimar brands, with the latter benefiting
from the opening of the Sensimar Khao Lak. We continue to implement
our strategy to improve direct distribution with a focus on online
via our re-launched TUI.com website.
The German business delivered GBP3m of efficiency savings
towards the business improvement programme in the period.
France
France reported an underlying operating loss of GBP51m (H1 2012:
loss of GBP61m). This improved performance was primarily driven by
successful cost-saving initiatives through the business improvement
programme. This relates to the airline and consolidation of the
French tour operators to create a single business, which was
implemented last year.
The tour operator continues to be impacted by low demand for
North African destinations such as Tunisia, Egypt and Morocco and
general consumer weakness. We have reduced our loss-making
long-haul programme, removing unprofitable routes and destinations
from the portfolio.
The Airline saw changes to the fleet composition during the
quarter, with two new A330-300s aircraft arriving during the
period. A smaller, more flexible fleet will help to reduce risk
within the programme. Our remaining 747s and A330-200s were also
refitted during the period to allow for increased leg room and
achieve higher levels of customer satisfaction.
The French business delivered GBP10m of efficiency savings
towards the business improvement programme in the period.
France H1 13 H1 12 Change
%
Underlying operating loss
(GBPm)
Tour Operator (42) (42) Flat
Airline (9) (19) +53%
------ ------ -------
(51) (61) +16%
Emerging Markets
In the Emerging Markets Sector, our Russian business delivered
an improvement in underlying trading leading to an operating loss
of GBP7m (H1 2012: loss of GBP13m).
Emerging Markets (share of JV)
H1 13 H1 12 Change %
Underlying operating loss (GBPm) (7) (13) +46%
Accommodation & Destinations (A&D) Sector
Accommodation & Destinations (A&D) delivered an
underlying operating loss of GBP1m (H1 2012: profit of GBP8m). This
reflects the timing of investment in infrastructure, the investment
in OTA including our recent Brazilian acquisition, Malapronta and
the phasing of costs within Inbound Services.
TTV for the Sector increased by 12% to GBP1,160m (H1 2012:
GBP1,034m). This was primarily driven by growth in Hotelbeds and
Bedsonline in Accommodation Wholesaler and by our cruise handling
business, Intercruises.
Accommodation & Destinations H1 13 H1 12 Change
%
Customers ('000)
Online Accommodation roomnights 9,590 8,522 +13%
Incoming passenger volumes 4,066 3,905 +4%
Revenue (GBPm) 282 278 +1%
Underlying operating profit
/ (loss) (GBPm)
Online Accommodation 1 7 -86%
Inbound Services (2) 1 N/A
------ ------ -------
Total (1) 8 N/A
====== ====== =======
Online Accommodation
The Online Accommodation business delivered underlying operating
profit of GBP1m (H1 2012: GBP7m), reflecting the timing of
infrastructure investments, expansion in Asia for our OTA business
and investment in our recent Brazilian OTA acquisition,
Malapronta.
TTV for Online Accommodation grew by 14% to GBP763m and
roomnights increased by 13% primarily due to strong organic growth
from our Accommodation Wholesaler brands (Hotelbeds and
Bedsonline). The key area of focus remains on international
expansion, particularly in the Americas and Asia.
Inbound Services
The Inbound Services business delivered underlying operating
loss of GBP2m (H1 2012: profit of GBP1m), reflecting the phasing of
costs between the first half and second half of the financial year.
Incoming passenger volumes increased by 4% over the prior year. In
cruise handling, the number of port calls handled increased by
25%.
Specialist & Activity Sector
The Specialist & Activity Sector reported an underlying
operating loss of GBP12m (H1 2012: loss of GBP16m). The year-on
year improvement of GBP4m was driven primarily by the Specialist
Holiday Group which benefited from an improved ski season, the
restructuring of the sector (where we have cut central costs) and a
GBP1m benefit from the earlier timing of Easter.
North American Specialist reported an adverse result due to one
less departure in Starquest (private jet tours) during the second
quarter and timings of trips within Quark (polar expeditions). The
Sport division suffered from a lack of significant sporting events
compared with the prior year, which benefited from UEFA and Olympic
programmes.
Specialist & Activity delivered GBP1m of efficiency savings
towards the business improvement programme in the period.
Specialist & Activity Change
H1 13 H1 12 %
Customers ('000) 668 696 -4%
Revenue (GBPm) 705 724 -3%
Underlying operating loss
(GBPm) (12) (16) +25%
--------------------------- ------ ------ -------
Acquisitions & Investments
Total consideration paid in respect of acquisitions was GBP9m
during the period net of cash acquired. Further information is
included in Note 11.
Taxation
Underlying loss before tax for the period was GBP346m. The
underlying effective tax rate on these losses is 27%. Based on the
current structure of the business and existing local taxation rates
and legislation, it is expected that the underlying tax rate will
be maintained at this level in the medium term. The effective tax
rate for the six months ended 31 March 2013 is 35%. This differs to
the underlying tax rate due to the tax effect of acquisition
related expenses, separately disclosed items and the change in the
deferred tax rate in the UK.
The cash tax rate is expected to be lower than the underlying
income tax rate as we utilise our deferred tax assets generated
from restructuring expenditure and trading losses. In the coming
year, we envisage an underlying cash tax rate of approximately 20%
of underlying profit before tax.
Dividends
The Board recommends an interim dividend per ordinary share of
3.75p (H1 12: 3.40p), payable to holders of relevant shares on the
register at 6 September 2013. This will be paid on 4 October
2013.
We intend to continue to operate a dividend re-investment plan
as an alternative to the cash dividend.
Separately disclosed items
Separately disclosed items net to an GBP8m expense in the period
(H1 12: GBP52m). This included a restructuring charge of GBP17m,
primarily relating to restructuring within our Specialist and
Activity and French businesses. We also recorded a pension related
credit of GBP14m. Further information is included in Note 5.
Cash and liquidity
The net debt position (cash and cash equivalents less loans,
overdrafts and finance leases) at 31 March 2013 was GBP1,049m (31
March 2012: GBP1,184m). This consisted of GBP502m of cash and
GBP123m of current interest-bearing loans and liabilities and
GBP1,428m of non-current interest-bearing loans and
liabilities.
We remain confident in our funding and liquidity position. We
have three main sources of long-term debt funding - these include
the external bank revolving syndicated credit facilities totalling
GBP1,020m which mature in June 2015, a GBP350m convertible bond
(due October 2014 and which we intend to refinance during the 2013
financial year) and a GBP400m convertible bond (due April 2017).
The external bank revolving facility is used to manage the
seasonality of the Group's cash flows and liquidity.
Consolidated income statement
for the 6-month period ended 31 March 2013
6-month 6-month
period ended period ended Year ended
31 March 2013 31 March 2012 30 September 2012
------------------------------------------------------- ----- --------------- ---------------- -------------------
Note GBPm GBPm GBPm
------------------------------------------------------- ----- --------------- ---------------- -------------------
Revenue 4 5,397 5,447 14,460
Cost of sales (5,173) (5,276) (12,965)
------------------------------------------------------- ----- --------------- ---------------- -------------------
Gross profit 224 171 1,495
Administrative expenses (581) (579) (1,199)
Share of profits of joint ventures and associates 10 1 5
------------------------------------------------------- ----- --------------- ---------------- -------------------
Operating (loss) / profit 4 (347) (407) 301
------------------------------------------------------- ----- --------------- ---------------- -------------------
Analysed as:
Underlying operating (loss) / profit 4 (289) (317) 490
Separately disclosed items 5 (8) (52) (92)
Acquisition related expenses 6 (31) (35) (62)
Impairment of goodwill 7 (10) - (20)
Impairment of available for sale financial asset - - (10)
Taxation on profits and interest of joint ventures and
associates (9) (3) (5)
------------------------------------------------------- ----- --------------- ---------------- -------------------
(347) (407) 301
------------------------------------------------------- ----- --------------- ---------------- -------------------
Financial income 39 45 96
Financial expenses (96) (95) (196)
------------------------------------------------------- ----- --------------- ---------------- -------------------
Net financial expenses (57) (50) (100)
------------------------------------------------------- ----- --------------- ---------------- -------------------
(Loss) / profit before tax (404) (457) 201
Taxation 8 143 167 (64)
------------------------------------------------------- ----- --------------- ---------------- -------------------
(Loss) / profit for the period / year (261) (290) 137
------------------------------------------------------- ----- --------------- ---------------- -------------------
Attributable to:
Equity holders of the parent (261) (288) 138
Non-controlling interests - (2) (1)
------------------------------------------------------- ----- --------------- ---------------- -------------------
(Loss) / profit for the period / year (261) (290) 137
------------------------------------------------------- ----- --------------- ---------------- -------------------
6-month 6-month
period ended period ended Year ended
31 March 2013 31 March 2012 30 September 2012
------------------------------------------------------- ----- --------------- ---------------- -------------------
Pence Pence Pence
------------------------------------------------------- ----- --------------- ---------------- -------------------
Basic and diluted (loss) / earnings per share for
(loss) / profit attributable to the equity
holders of the Company during the period / year
Basic (loss) / earnings per share 10 (23.6) (26.0) 12.5
Diluted (loss) / earnings per share 10 (23.6) (26.0) 12.3
------------------------------------------------------- ----- --------------- ---------------- -------------------
Consolidated statement of comprehensive income
for the 6-month period ended 31 March 2013
6-month 6-month
period ended period ended Year ended
31 March 2013 31 March 2012 30 September 2012
--------------------------------------------------------------- --------------- --------------- -------------------
GBPm GBPm GBPm
--------------------------------------------------------------- --------------- --------------- -------------------
(Loss) / profit for the period / year (261) (290) 137
Other comprehensive (expense) / income
Items that will not be reclassified:
Actuarial losses arising in respect of defined benefit pension
schemes (34) (26) (172)
Tax on actuarial losses 8 7 32
--------------------------------------------------------------- --------------- --------------- -------------------
Items that will not be reclassified (26) (19) (140)
Items that may be reclassified:
Foreign exchange translation 132 (106) (160)
Foreign exchange gains recycled through the consolidated
income statement (2) - -
Cash flow hedges:
- movement in fair value 118 47 (42)
- amounts recycled through the consolidated income statement (6) (2) (30)
- tax on cash flow hedges (22) (13) 15
Available for sale financial assets:
- movement in fair value 4 (1) (4)
- amounts recycled to the consolidated income statement - - 10
--------------------------------------------------------------- --------------- --------------- -------------------
Items that may be reclassified 224 (75) (211)
--------------------------------------------------------------- --------------- --------------- -------------------
Other comprehensive income / (loss) for the period / year net
of tax 198 (94) (351)
--------------------------------------------------------------- --------------- --------------- -------------------
Total comprehensive loss for the period / year (63) (384) (214)
--------------------------------------------------------------- --------------- --------------- -------------------
Total comprehensive loss for the period / year
Attributable to:
Equity holders of the parent (63) (380) (211)
Non-controlling interests - (4) (3)
--------------------------------------------------------------- --------------- --------------- -------------------
Total (63) (384) (214)
--------------------------------------------------------------- --------------- --------------- -------------------
Consolidated balance sheet
at 31 March 2013
31 March 2013 31 March 2012 30 September 2012
Note GBPm GBPm GBPm
----------------------------------------------------------- ----- -------------- -------------- ------------------
Non-current assets
Intangible assets 4,619 4,569 4,482
Property, plant and equipment 1,269 1,075 1,096
Investments in joint ventures and associates 273 254 258
Other investments 71 71 66
Trade and other receivables 275 256 225
Retirement benefit asset - 1 -
Derivative financial instruments 30 21 21
Deferred tax assets 332 305 125
----------------------------------------------------------- ----- -------------- -------------- ------------------
6,869 6,552 6,273
----------------------------------------------------------- ----- -------------- -------------- ------------------
Current assets
Inventories 65 78 61
Other investments 17 18 19
Trade and other receivables 1,633 1,721 1,312
Income tax recoverable 41 65 15
Derivative financial instruments 177 161 98
Cash and cash equivalents 14 502 424 830
Assets classified as held for sale 17 6 13
----------------------------------------------------------- ----- -------------- -------------- ------------------
2,452 2,473 2,348
Total assets 9,321 9,025 8,621
----------------------------------------------------------- ----- -------------- -------------- ------------------
Current liabilities
Interest-bearing loans and borrowings (123) (98) (70)
Retirement benefits (3) (2) (2)
Derivative financial instruments (100) (89) (125)
Trade and other payables 13 (4,777) (4,452) (4,549)
Provisions for liabilities (308) (342) (300)
Income tax payable (22) (123) (39)
(5,333) (5,106) (5,085)
----------------------------------------------------------- ----- -------------- -------------- ------------------
Non-current liabilities
Interest-bearing loans and borrowings (1,428) (1,510) (868)
Retirement benefits (679) (512) (646)
Derivative financial instruments (13) (8) (20)
Trade and other payables (66) (56) (48)
Provisions for liabilities (322) (338) (316)
Deferred tax liabilities (67) (63) (29)
----------------------------------------------------------- ----- -------------- -------------- ------------------
(2,575) (2,487) (1,927)
Total liabilities (7,908) (7,593) (7,012)
----------------------------------------------------------- ----- -------------- -------------- ------------------
Net assets 1,413 1,432 1,609
----------------------------------------------------------- ----- -------------- -------------- ------------------
Equity
Called up share capital 112 112 112
Convertible bond reserve 88 85 88
Other reserves 2,863 2,770 2,627
Accumulated losses (1,694) (1,580) (1,262)
----------------------------------------------------------- ----- -------------- -------------- ------------------
Total equity attributable to equity holders of the parent 1,369 1,387 1,565
Non-controlling interests 44 45 44
Total equity 1,413 1,432 1,609
----------------------------------------------------------- ----- -------------- -------------- ------------------
Consolidated statement of cash flows
for the 6-month period ended 31 March 2013
6-month Year ended
period ended 6-month period ended 30 September
31 March 2013 31 March 2012 2012
-------------------------------------------------------------- --------------- --------------------- --------------
GBPm GBPm GBPm
-------------------------------------------------------------- --------------- --------------------- --------------
(Loss) / profit for the period / year (261) (290) 137
Adjustment for:
Depreciation and amortisation 118 107 219
Impairment of intangible assets and property, plant and
equipment 7 - 22
Impairment of goodwill 10 - 20
Equity-settled share-based payment expense 8 8 16
Profit on sale of property, plant and equipment - (7) (9)
Share of (profit) / loss of joint ventures and associates (10) 1 (5)
Loss on foreign exchange 17 3 14
Impairment of available for sale financial asset - - 10
Dividends received from joint ventures and associates 28 - 4
Pension curtailment gain recognised in the consolidated
income statement (14) - (1)
Financial income (39) (45) (96)
Financial expenses 96 95 196
Taxation (143) (167) 64
Operating (loss) / profit before changes in working capital
and provisions (183) (295) 591
(Increase) / decrease in inventories (3) (3) 17
Increase in trade and other receivables (317) (330) (55)
(Decrease) / increase in trade and other payables (15) (218) 126
Decrease in provisions and employee benefits (20) (4) (35)
-------------------------------------------------------------- --------------- --------------------- --------------
Cash flows from operations (538) (850) 644
Interest paid (44) (38) (75)
Interest received 6 5 15
Income taxes paid (71) (23) (82)
-------------------------------------------------------------- --------------- --------------------- --------------
Cash flows from operating activities (647) (906) 502
-------------------------------------------------------------- --------------- --------------------- --------------
Investing activities
Proceeds from sale of property, plant and equipment 58 42 116
Proceeds from disposal of investments - 1 -
Acquisition of subsidiaries, net of cash acquired (9) (10) (23)
Proceeds from other investments - - 1
Investment in joint ventures and associates and other
investments (40) (18) (25)
Acquisition of property, plant and equipment (119) (103) (287)
Acquisition of intangible assets (38) (40) (91)
-------------------------------------------------------------- --------------- --------------------- --------------
Cash flows from investing activities (148) (128) (309)
-------------------------------------------------------------- --------------- --------------------- --------------
Financing activities
Proceeds from new loans 482 642 14
Repayment of borrowings (25) (5) (43)
Payment of finance lease liabilities (12) (8) (19)
Dividends paid to ordinary and non-controlling interests (38) (37) (128)
Cash flows from financing activities 407 592 (176)
-------------------------------------------------------------- --------------- --------------------- --------------
Net (decrease) / increase in cash and cash equivalents (388) (442) 17
Cash and cash equivalents at start of period / year 830 902 902
Effect of foreign exchange on cash held 60 (36) (89)
-------------------------------------------------------------- --------------- --------------------- --------------
Cash and cash equivalents at end of period / year 502 424 830
-------------------------------------------------------------- --------------- --------------------- --------------
Consolidated statement of changes in equity for the 6-month
period ended 31 March 2013
Equity
Called holders
up Convertible of Non
share bond Merger Other Accumulated the controlling
capital reserve reserve reserves losses parent interests Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------------- --------- ------------ --------- ---------- ------------ --------- ------------- ------
At 1 October
2012 112 88 2,523 104 (1,262) 1,565 44 1,609
Total comprehensive
loss for the
period
Loss for the
period - - - - (261) (261) - (261)
---------------------- --------- ------------ --------- ---------- ------------ --------- ------------- ------
Other comprehensive
income / (loss)
Items that will
not be reclassified:
Actuarial loss
arising in respect
of defined benefit
pension schemes,
net of tax - - - - (26) (26) - (26)
Items that may
be reclassified:
Foreign exchange
translation - - - 146 (16) 130 - 130
Cash flow hedges,
net of tax - - - 90 - 90 - 90
Changes in the
fair value of
available for
sale financial
assets - - - - 4 4 - 4
Total other
comprehensive
gain / (loss) - - - 236 (38) 198 - 198
---------------------- --------- ------------ --------- ---------- ------------ --------- ------------- ------
Total comprehensive
gain / (loss)
for the period - - - 236 (299) (63) - (63)
---------------------- --------- ------------ --------- ---------- ------------ --------- ------------- ------
Transactions
with owners
Share-based payment:
charge for the
period - - - - 5 5 - 5
Share-based payment
- disposal on
award of shares - - - - (8) (8) - (8)
Acquisition of
non-controlling
interests - - - - - - 1 1
Dividends - - - - (130) (130) (1) (131)
Total transactions
with owners - - - - (133) (133) - (133)
---------------------- --------- ------------ --------- ---------- ------------ --------- ------------- ------
At 31 March 2013 112 88 2,523 340 (1,694) 1,369 44 1,413
---------------------- --------- ------------ --------- ---------- ------------ --------- ------------- ------
Consolidated statement of changes in equity for the 6-month
period ended 31 March 2012
Equity
Called up Convertible holders Non
share bond Merger Other Accumulated of the controlling
capital reserve reserve reserves losses parent interests Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
----------------- ----------- ------------ ----------- ----------- ------------ ---------- ------------ ------
At 1 October
2011 112 85 2,523 323 (1,155) 1,888 50 1,938
Total
comprehensive
loss for the
period
Loss for the
period - - - - (288) (288) (2) (290)
----------------- ----------- ------------ ----------- ----------- ------------ ---------- ------------ ------
Other
comprehensive
income / (loss)
Items that will
not be
reclassified:
Actuarial loss
arising in
respect of
defined benefit
pension
schemes, net of
tax - - - - (19) (19) - (19)
Items that may
be reclassified:
Foreign exchange
translation - - - (108) 4 (104) (2) (106)
Cash flow
hedges, net of
tax - - - 32 - 32 - 32
Changes in the
fair value of
available for
sale financial
assets - - - - (1) (1) - (1)
----------------- ----------- ------------ ----------- ----------- ------------ ---------- ------------ ------
Total other
comprehensive
loss - - - (76) (16) (92) (2) (94)
----------------- ----------- ------------ ----------- ----------- ------------ ---------- ------------ ------
Total
comprehensive
loss for the
period - - - (76) (304) (380) (4) (384)
----------------- ----------- ------------ ----------- ----------- ------------ ---------- ------------ ------
Transactions
with owners
Share-based
payments:
charge for the
period - - - - 5 5 - 5
Acquisition of
non-controlling
interests - - - - (1) (1) - (1)
Dividends - - - - (125) (125) (1) (126)
----------------- ----------- ------------ ----------- ----------- ------------ ---------- ------------ ------
Total
transactions
with owners - - - - (121) (121) (1) (122)
----------------- ----------- ------------ ----------- ----------- ------------ ---------- ------------ ------
At 31 March
2012 112 85 2,523 247 (1,580) 1,387 45 1,432
----------------- ----------- ------------ ----------- ----------- ------------ ---------- ------------ ------
1. Basis of preparation
Statement of compliance
This condensed consolidated interim financial information for
the 6-month period ended 31 March 2013 has been prepared in
accordance with the Disclosure and Transparency Rules of the
Financial Conduct Authority and with International Accounting
Standard (IAS) 34 'Interim financial reporting'. The condensed
consolidated interim financial information should be read in
conjunction with the Company's published consolidated financial
statements for the year ended 30 September 2012, which were
prepared in accordance with IFRS as adopted by the European
Union.
The condensed consolidated interim financial information does
not comprise statutory accounts within the meaning of section 434
of the Companies Act 2006. Statutory accounts for the year ended 30
September 2012 were approved by the Board of Directors on 3
December 2012 and delivered to the Registrar of Companies. The
report of the auditors on those accounts was (i) unqualified; (ii)
did not include a reference to any matters to which they drew
attention by way of emphasis without qualifying their report; and
(iii) did not contain a statement under section 498 of the
Companies Act 2006.
This condensed consolidated interim financial information was
approved by the Board of Directors on 9 May 2013.
Accounting policies
As required by the Disclosure and Transparency Rules of the
Financial Conduct Authority, this condensed consolidated interim
financial information has been prepared applying the accounting
policies and presentation that were applied in the preparation of
the Company's published consolidated financial statements for the
year ended 30 September 2012, except as noted below in respect of
taxes in the interim period and new and amended standards adopted
by the Group:
Taxes in the interim period are accrued using the tax rate that
would be applicable to expected total annual earnings.
a) New and amended standards adopted by the Group
The following accounting standards and interpretations issued by
the International Accounting Standards Board (IASB) or IFRS
Interpretations Committee (IFRIC) have been adopted by the Group
from 1 October 2012 with no significant impact on the consolidated
results or financial position:
-- Amendment to IAS 1 - Presentation of financial
statements on OCI
-- Amendment to IAS 12 - Income taxes on deferred
tax
These adoptions have not had a significant impact on the current
or prior period's / year's results or balance sheet positions, and
therefore no restatement of the prior period's / year's equity or
(loss) / profit has been presented for new standards.
b) New and amended standards which are not considered relevant to the Group
The following amendment is not yet effective and is not
considered to be relevant to the Group:
-- Amendments to IFRS 1 - First time adoption on hyperinflation
and fixed dates
c) New interpretations and amendments to standards and
interpretations that have been issued but are not yet effective
The following further new accounting standards, amendments to
existing standards and interpretations are not yet effective and
have not been adopted early:
-- Various IFRSs - 2011 Annual improvements
-- IFRS 9 - Financial instruments
-- IFRS 10 - Consolidated financial statements
-- IFRS 11 - Joint arrangements
-- IFRS 12 - Disclosures of interests in other entities
-- Amendment to IFRS 10,11 and 12 on transition guidance
-- IFRS 13 - Fair value measurement
-- IAS 19 (revised 2011) - Employee benefits
-- IAS 27 (revised 2011) - Separate financial statements
-- IAS 28 (revised 2011) - Investments in associates
and joint ventures
-- Amendment to IFRS 1 - First time adoption on government
grants
-- Amendments to IAS 32 and IFRS 7 on Financial Instruments
- asset and liability offsetting
The revision to IAS 19 'Employee benefits' will be effective for
the financial year commencing 1 October 2013 and makes significant
changes to the recognition, measurement and disclosure of defined
benefit pension schemes. Had the standard been applied in the
current interim period, the Group's underlying and statutory loss
before tax would have increased by approximately GBP6m with a
corresponding reduction in net actuarial losses being recognised in
the Consolidated statement of comprehensive income. This charge
equates to an increase in the statutory and underlying loss per
share of 0.5p. The impact on the Group's profit before tax for the
current year ending 30 September 2013 is expected to be GBP12m,
equating to a decrease in the statutory and underlying earnings per
share of 1.1p.
The Group continues to monitor the potential impact of these and
other new standards and interpretations which may be endorsed by
the European Union and require adoption by the Group in future
accounting periods.
Estimates and judgements
The preparation of interim financial information requires
management to make estimates, judgements and assumptions that
affect the application of accounting policies and the reported
amounts of assets, liabilities, income and expenses. Actual results
may differ from these estimates.
Underlying measures of profit / (loss)
The Group believes that underlying operating profit / (loss),
underlying profit / (loss) before tax and underlying earnings /
(loss) per share provide additional guidance to statutory measures
to help understand the underlying performance of the business
during the financial period / year. The term underlying is not
defined by International Financial Reporting Standards. It is a
measure that is used by management to assess the underlying
performance of the business internally and is not intended to be a
substitute measure for International Financial Reporting Standards.
The Group defines these underlying measures as follows:
Underlying operating profit / (loss) is operating profit or loss
from continuing operations stated before separately disclosed items
(Note 5), acquisition related expenses, impairment of goodwill and
available for sale financial assets and interest and taxation on
the Group's share of the results of joint ventures and
associates.
Underlying profit / (loss) before tax is profit or loss from
continuing operations before taxation (including the Group's share
from joint ventures and associates), acquisition related expenses,
impairment of goodwill and available for sale financial assets,
interest and taxation of joint ventures and associates and
separately disclosed items included within the operating
result.
Underlying earnings / (loss) used in the calculation of
underlying earnings / (loss) per share is profit / (loss) after tax
from continuing operations excluding acquisition related expenses,
impairment of goodwill and available for sale financial assets and
separately disclosed items included within the operating result.
For the purpose of this calculation, an underlying tax charge is
used which excludes the tax effects of separately disclosed items,
acquisition related expenses, goodwill and available for sale
financial asset impairment charges and separately disclosed tax
items.
It should be noted that the definitions of underlying items
being used in this condensed consolidated interim financial
information are those used by the Group and may not be comparable
with the term "underlying" as defined by other companies within
both the same sector or elsewhere.
Separately disclosed items
Separately disclosed items are those significant items which in
management's judgement are highlighted by virtue of their size or
incidence to enable a full understanding of the Group's financial
performance. Such items are included within the income statement
caption to which they relate.
Acquisition related expenses
Acquisition related expenses comprise amortisation of business
combination intangibles, other acquisition related expenses and
remuneration for post-combination services.
Funding, liquidity and going concern
The Directors have considered the funding and liquidity position
of the Group.
The Board remains satisfied with the Group's funding and
liquidity position. At 31 March 2013, the main sources of debt
funding included:
1 a total of GBP1,020m syndicated bank revolving credit
facilities which mature in June 2015;
2 GBP299m of drawn finance lease obligations with repayments up to March 2022;
3 GBP185m of bonding and letter of credit facilities which mature in June 2015;
4 a GBP350m convertible bond (due October 2014) issued in October 2009; and
5 a GBP400m convertible bond (due April 2017) issued in April 2010.
The ratio of Earnings Before Interest, Taxation, Depreciation,
Amortisation and operating lease Rentals (EBITDAR) to fixed charges
(being the aggregate amount of interest and any other finance
charges in respect of borrowings and including all payments under
operating leases) and the ratio of net debt to Earnings Before
Interest, Taxation, Depreciation and Amortisation (EBITDA), which
the Board believes to be the most useful measures of cash
generation and gearing, as well as being the main basis for the
Group's credit facility covenants, are well within the covenant
limits at the date of the balance sheet. Forecasts reviewed by the
Board, including forecasts adjusted for significantly worse
economic conditions, show continued compliance with these
covenants. For both covenants, earnings are calculated on an
underlying basis as described above.
On the basis of its forecasts, both base case and adjusted as
described above and available facilities, the Board has concluded
that the going concern basis of preparation continues to be
appropriate.
2. Seasonality
The Group's travel leisure business is subject to significant
seasonal fluctuations between the Winter and Summer seasons,
resulting in losses being expected in the first half and profits
being expected in the second half of the year. The Group mitigates
this seasonal impact through operating a broad range of holiday
products in both the Winter and Summer seasons and in different
global holiday markets which have different annual cycles. There
are appropriate sources of debt funding, as described in Note 1, to
match the seasonality of the Group's cash flows.
3. Principal risks and uncertainties
The Group considers strategic, operational and financial risks
and identifies actions to mitigate those risks. The principal risks
and uncertainties faced by the Group for the remainder of the
financial year and which are unchanged from the prior year, are
listed below:
-- Global financial factors, such as exchange rates, fuel prices
and tax laws and the global economic environment
-- Political volatility, natural catastrophes and outbreaks
-- Regulatory environment, particularly in relation to aviation
taxes and environmental and consumer protection
-- The economic environment, changing consumer preferences and desires
-- Reliance on IT systems
-- Investment into niche businesses and emerging markets
-- Ability to retain key management
Further details of the Group's risk profile analysis can be
found on pages 23 to 27 of the Group's Annual Report and Accounts
for the year ended 30 September 2012, available from the Group
website: www.tuitravelplc.com.
4. Segmental information
Information regarding the identification of the chief operating
decision-maker and the basis of measurement for the current and
prior periods and for the year ended 30 September 2012 is disclosed
on pages 94 and 95 of the Group's 2012 Annual Report and
Accounts.
Group structure
As disclosed in the Group's 2012 Annual Report & Accounts,
with effect from 1 October 2012, the businesses within our
Mainstream Sector are reported via each key source market instead
of regionally. Emerging Markets remains outside of the Mainstream
Sector for internal management reporting purposes and is reported
separately.
The Mainstream Sector consists of the following source markets:
UK & Ireland, Germany, France, Corsair, the Nordic Countries,
Canada, Belgium & Morocco, the Netherlands, Austria,
Switzerland, Poland, Southern Europe and the Hotels division. Each
source market represents an individual operating segment, prior to
applying aggregation criteria, for the purposes of segmental
information.
The Specialist & Activity Sector operates and reports under
seven divisions: Specialist Holidays Group, Marine, PEAK (formerly
named Adventure), North American Specialist, North American
Education, Experience Education and Sport.
The Accommodation & Destinations Sector (A&D) provides a
range of services in destinations to tour operators, travel agents,
corporate clients and direct to the consumer worldwide. A&D
consists of Online Accommodation (including Accommodation
Wholesaler and Accommodation OTA) and Inbound Services.
Reportable and reported segments
The results of the UK & Ireland, Germany, Nordics and the
French tour operator are reported separately due to the size and
importance of these source markets and which meet the threshold for
being individual reportable segments. The results for the French
scheduled airline, Corsair, are shown separately to that of the
French tour operator as it has a different business model to the
rest of the Group's integrated tour operators. All of the other
Mainstream Sectors, except for the Hotels division, meet the
aggregation criteria set out in IFRS 8 and are reported as one
segment, the Rest of Mainstream. All of the aggregated businesses
are considered to be similar in nature and economically similar
over the long term. The Hotels division is reported separately as
this does not meet the aggregation criteria of IFRS 8.
Emerging Markets, the Specialist & Activity and A&D
Sectors are all reported as separate Sector totals as this is
consistent with internal management reports.
Segmental information for both the current and prior periods has
been presented using this structure, with the prior periods'
information being restated.
6-month period ended 31 March 2013
Underlying
Total operating
Total Inter-segmental external (loss)
revenue revenue revenue / profit
Sector GBPm GBPm GBPm GBPm
------------------------ ---------- ------------------ ----------- -----------
UK & Ireland 1,202 (101) 1,101 (113)
Germany 1,545 (20) 1,525 (63)
Nordics 589 - 589 38
French tour operator 242 - 242 (42)
French airline 196 (27) 169 (9)
Hotels 53 (44) 9 (33)
Rest of Mainstream 788 (13) 775 (28)
------------------------ ---------- ------------------ ----------- -----------
Total Mainstream 4,615 (205) 4,410 (250)
------------------------ ---------- ------------------ ----------- -----------
Specialist & Activity 706 (1) 705 (12)
A&D 341 (59) 282 (1)
Emerging Markets - - - (7)
All other segments
and unallocated items - - - (19)
Total Group 5,662 (265) 5,397 (289)
------------------------ ---------- ------------------ ----------- -----------
6-month period ended 31 March 2012
Underlying
Total operating
Total Inter-segmental external (loss)
revenue revenue revenue / profit
(restated) (restated) (restated) (restated)
Sector GBPm GBPm GBPm GBPm
------------------------ ------------- ------------------ ------------- ------------
UK & Ireland 1,147 (98) 1,049 (125)
Germany 1,570 (9) 1,561 (61)
Nordics 535 - 535 22
French tour operator 343 - 343 (42)
French airline 200 (26) 174 (19)
Hotels 53 (43) 10 (26)
Rest of Mainstream 810 (37) 773 (29)
------------------------ ------------- ------------------ ------------- ------------
Total Mainstream 4,658 (213) 4,445 (280)
------------------------ ------------- ------------------ ------------- ------------
Specialist & Activity 724 - 724 (16)
A&D 342 (64) 278 8
Emerging Markets - - - (13)
All other segments
and unallocated items - - - (16)
Total Group 5,724 (277) 5,447 (317)
------------------------ ------------- ------------------ ------------- ------------
Year ended 30 September 2012
Underlying
Total operating
Total Inter-segmental external profit
revenue revenue revenue / (loss)
(restated) (restated) (restated) (restated)
Sector GBPm GBPm GBPm GBPm
------------------------ ------------- ----------------- ------------- ------------
UK & Ireland 3,756 (122) 3,634 197
Germany 3,932 (15) 3,917 87
Nordics 1,085 (1) 1,084 71
French tour operator 903 - 903 (32)
French airline 403 (43) 360 (15)
Hotels 191 (166) 25 6
Rest of Mainstream 2,469 (74) 2,395 106
------------------------ ------------- ----------------- ------------- ------------
Total Mainstream 12,739 (421) 12,318 420
------------------------ ------------- ----------------- ------------- ------------
Specialist & Activity 1,479 (1) 1,478 48
A&D 859 (195) 664 66
Emerging Markets - - - (15)
All other segments
and unallocated items - - - (29)
Total Group 15,077 (617) 14,460 490
------------------------ ------------- ----------------- ------------- ------------
Reconciliation of underlying operating (loss) / profit in
segmental analysis to (loss) / profit before tax
6-month 6-month
period period
ended ended Year ended
31 March 31 March 30 September
2013 2012 2012
GBPm GBPm GBPm
----------------------------------- ---------- ---------- --------------
Underlying operating (loss)
/ profit (289) (317) 490
Separately disclosed items (8) (52) (92)
Acquisition related expenses (31) (35) (62)
Impairment of goodwill (10) - (20)
Impairment of available for
sale financial asset - - (10)
Taxation on profits and interest
of joint ventures and associates (9) (3) (5)
----------------------------------- ---------- ---------- --------------
Operating (loss) / profit (347) (407) 301
Net financial expenses (57) (50) (100)
----------------------------------- ---------- ---------- --------------
(Loss) / profit before tax (404) (457) 201
----------------------------------- ---------- ---------- --------------
5. Separately disclosed items
6-month 6-month
period ended period ended Year ended
31 March 2013 31 March 2012 30 September 2012
GBPm GBPm GBPm
--------------------------------------------------------- --------------- --------------- -------------------
Separately disclosed items in operating (loss) / profit
Restructuring and other separately disclosed items 9 59 102
Aircraft and other assets - (7) -
Pension related credit (14) - -
Litigation provisions 13 - 17
Changes in accounting estimates - - (27)
--------------------------------------------------------- --------------- --------------- -------------------
Total 8 52 92
--------------------------------------------------------- --------------- --------------- -------------------
Restructuring and other separately disclosed items
The overall charge of GBP9m includes GBP17m of restructuring
costs in the 6-month period ended 31 March 2013. Restructuring
costs include GBP9m in the Specialist & Activity sector due to
the removal of the sector management team and the closure of a
business in the languages division and GBP5m in France from the
ongoing restructure of both the tour operator and the airline.
These restructuring costs are offset by an GBP8m credit on the
change in value of unhedged foreign currency derivative instruments
relating to future seasons.
During the 6-month period ended 31 March 2012 there were
Mainstream restructuring costs of GBP51m which principally related
to the restructuring programme of the tour operator in France, the
restructure of the Moroccan airline Jet4You and the restructure of
the German business. In addition, costs of GBP7m were incurred in
Group head office companies, being primarily costs incurred
supporting the various restructuring programmes around the Group.
Finally, residual restructuring costs of GBP1m were incurred across
the Specialist & Activity and Accommodation & Destinations
Sectors.
Aircraft and other assets
During the 6-month period ended 31 March 2012, profit on the
sale and leaseback of aircraft amounted to GBP7m.
Pension related credit
In the Netherlands, the management and works council of TUI
Nederland NV agreed to close the existing defined benefit pension
scheme and replace it with a defined contribution scheme. This
change is classified as a curtailment under IAS 19 and the
resultant reduction in accrued pension liabilities of GBP14m has
been recognised in the income statement in the period in which it
occurred.
The management of TUI Nederland NV and the pension scheme
trustees have also agreed to transfer the existing pension fund
assets and liabilities to AEGON, a multinational life insurance,
pensions and asset management company headquartered in the
Netherlands. The agreement was contingent on approval by the Dutch
pension regulator, which was received after the period end in April
2013. This transfer of the pension assets and liabilities is
expected to generate a further credit in the income statement of
approximately GBP14m which will be recognised in the quarter ending
30 June 2013.
Litigation provisions
The Group continues to assess the likely outcome of the legal
actions in which it is involved and in accordance with IAS 37, has
increased the level of provision where it is more likely than not
that an outflow of resources will be required to settle outstanding
matters.
6. Analysis of acquisition related expenses
6-month 6-month
period ended period ended Year ended
31 March 2013 31 March 2012 30 September 2012
GBPm GBPm GBPm
----------------------------------------------------------- --------------- --------------- -------------------
Acquisition related expenses in operating (loss) / profit
Amortisation of business combination intangibles 28 30 59
Other acquisition related expenses 1 3 3
Remuneration for post-combination services 2 2 -
----------------------------------------------------------- --------------- --------------- -------------------
Total 31 35 62
----------------------------------------------------------- --------------- --------------- -------------------
7. Goodwill impairment charge
A goodwill impairment charge of GBP10m has been recognised in
the period in respect of two small businesses that have been
identified as non-core to the Group and the intention is to dispose
of them.
The goodwill impairment charge in the year ended 30 September
2012 of GBP20m related primarily to the Italian and Spanish tour
operators following a deterioration in their trading results during
2012 together with impairments of two non-core businesses, both of
which have been sold in the current period.
8. Taxation
The Group's effective rate of taxation, being the rate of
taxation forecast for the full year, applied to the 6-month period
ended 31 March 2013, is 35%. The Group's underlying effective rate
of taxation for the same period is 27%.
6-month 6-month
period ended period ended Year ended
31 March 2013 31 March 2012 30 September 2012
GBPm GBPm GBPm
--------------------------------------------------------------- --------------- --------------- -------------------
(Loss) / profit before tax reported in the consolidated income
statement (404) (457) 201
Less share of profit in joint ventures and associates (10) (1) (5)
(414) (458) 196
--------------------------------------------------------------- --------------- --------------- -------------------
Total income tax credit / (charge) in the consolidated
income statement 143 167 (64)
Effective tax rate 35% 36% 33%
--------------------------------------------------------------- --------------- --------------- -------------------
The effective tax rate for the six month period ended 31 March
2013 of 35% shown above differs from the underlying effective tax
rate of 27% due to the tax effect of acquisition related expenses,
separately disclosed items and the exclusion of the change in
deferred tax rate in the UK.
9. Dividends
The following dividends relating to ordinary shares have been
deducted from equity in the period:
6-month
6-month period ended
period ended 31 March Year ended
31 March 2013 2012 30 September 2012
GBPm GBPm GBPm
---------------------------------- --------------- -------------- -------------------
Interim dividend paid for 2012 38 - -
Final dividend proposed for 2012 92 - -
Interim dividend paid for 2011 - 36 36
Final dividend paid for 2011 - 89 89
Total dividends 130 125 125
---------------------------------- --------------- -------------- -------------------
The interim dividend in respect of the year ended 30 September
2012 of 3.4p per ordinary share, totalling GBP38m was paid on 3
October 2012 and deducted from equity in the current period.
At the Company's Annual General Meeting on 7 February 2013, the
shareholders approved the final recommended dividend for 2012 of
8.3p per ordinary share. The value of this dividend, GBP92m, has
therefore been recognised as a deduction from equity in the period
and as a liability at 31 March 2013. The dividend was paid on 10
April 2013.
Subsequent to the balance sheet date, the Directors have
proposed an interim dividend for the 6-month period ended 31 March
2013 of 3.75p per ordinary share, totalling GBP42m, payable on 4
October 2013.
A dividend reinvestment plan is in operation. Those shareholders
who have not elected to participate in this plan and who would like
to participate with respect to the 2013 interim dividend, may do so
by contacting Equiniti on 0871 384 2030. The last day for election
for the proposed interim dividend is 13 September 2013 and any
requests should be made in good time ahead of that date.
10. Loss / earnings per share
The basic (loss) / earnings per share is calculated by dividing
the result attributable to ordinary shareholders by the applicable
weighted average number of shares in issue during the period,
excluding those held in the Employee Benefit Trust.
The diluted (loss) / earnings per share is calculated by:
-- taking losses / earnings attributable to ordinary
shareholders adjusted where the effect would be
dilutive by the interest expense of the Group's
convertible bond net of tax; and
-- dividing by the adjusted weighted average number
of ordinary shares and where the effect would be
dilutive, outstanding share awards and the conversion
to ordinary shares of the Group's convertible bond.
In accordance with IAS 33: Earnings per share, the calculation
of basic and underlying diluted loss per share has not included
items that are anti-dilutive. Therefore there is no difference
between the calculation of basic and diluted loss per share in the
6-month periods ended 31 March 2013 and 31 March 2012.
The additional underlying earnings per share measures have been
given to provide the reader of the interim financial information
with a better understanding of the results.
Basic and diluted loss per share for the 6-month period ended 31
March 2013 were as follows:
Weighted
average Weighted
number of Loss per share average number Loss per share
Loss for the shares for for the of shares for for the
6-month the 6-month 6-month Loss for the the 6-month period
period ended period ended period ended 6-month 6-month period ended
31 March 31 March 31 March period ended ended 31 March
2013 2013 2013 31 March 2012 31 March 2012 2012
GBPm Millions Pence GBPm Millions Pence
Basic and
diluted loss
per share (261) 1,108 (23.6) (288) 1,107 (26.0)
--------------- ---------------
Separately
disclosed
items 8 - 52 -
Acquisition
related
expenses and
impairments 41 - 35 -
Tax base
difference (41) - (65) -
Basic and
diluted
underlying
loss per share (253) 1,108 (22.8) (266) 1,107 (24.0)
---------------- --------------- --------------- --------------- --------------- --------------- ---------------
Basic and diluted earnings per share for the year ended 30
September 2012 were as follows:
Weighted
Earnings average number Earnings
Year ended of shares per share
30 September 30 September 30 September
2012 2012 2012
GBPm Millions Pence
---------------------------- --------------- ----------------- ---------------
Basic earnings per share 138 1,108 12.5
---------------
Effect of dilutive options - 10
---------------
Diluted earnings per share 138 1,118 12.3
---------------------------- --------------- ----------------- ---------------
Basic and diluted underlying earnings per share for the year
ended 30 September 2012 were as follows:
Weighted
Earnings average Earnings
Year ended number per
30 September of shares share
2012 30 September 30 September
GBPm 2012 2012
Millions Pence
------------------------------ --------------- -------------- ---------------
Basic earnings per share 138 1,108 12.5
---------------
Acquisition related expenses
and impairments 92 -
Separately disclosed items 92 -
Tax base difference (36) -
------------------------------ --------------- -------------- ---------------
Basic underlying earnings
per share 286 1,108 25.8
Effect of dilutive options - 10
Effect of convertible bond
(net of tax) 47 205
------------------------------ --------------- -------------- ---------------
Diluted underlying earnings
per share 333 1,323 25.2
------------------------------ --------------- -------------- ---------------
11. Acquisitions and investments
Acquisitions in the 6-month period ended 31 March 2013
During the 6-month period ended 31 March 2013, the Group
acquired five businesses, including the remaining 50.1% of TUI
Infotec GmbH ('Infotec') that the Group did not already own and the
entire share capital of Isango! Limited and JBS Group, Inc. The
Group also acquired seven travel agents in Germany. The total
consideration for these acquisitions was GBP27m, comprising initial
and deferred consideration and the non-cash consideration for the
Group's share of the Infotec joint venture. The provisional fair
value of assets acquired was GBP8m and the provisional goodwill
arising for these acquisitions was GBP19m. This goodwill
predominantly relates to the acquisition of Infotec and represents
the ability to control fully that business with a view to drive
cost reduction and economies of scale in the Group's IT
Infrastructure.
The provisional fair values of the net assets acquired are set
out below:
GBPm
----------------------------- -----
Intangible fixed assets 5
Tangible fixed assets 8
Cash and cash equivalents 3
Trade and other receivables 27
Trade and other payables (35)
----------------------------- -----
Total 8
----------------------------- -----
The acquisitions did not have a material effect on revenue and
the Group result for the period.
The total cash outflow in the period from acquisition of
subsidiaries and travel agencies (net of cash acquired) was GBP9
million, which comprised GBP7 million (net) relating to current
period acquisitions and GBP2 million relating to prior period
acquisitions.
12. Acquisitions of property, plant and equipment and intangible
assets
Additions to property, plant and equipment and intangible assets
totalled GBP293m (2012: GBP258m) in the 6- month period to 31 March
2013. This comprises GBP5m (2012: GBP5m) for land and buildings;
GBP18m (2012: GBP13m) for yachts, motor boats and cruise ships;
GBP138m (2012: GBP91m) for aircraft and related equipment; GBP49m
(2012: GBP70m) for advance payments for future delivery of
aircraft; GBP41m (2012: GBP40m) for computer hardware and software;
and GBP42m (2012: GBP39m) of other equipment and intangibles.
The additions of GBP138m (2012: GBP91m) to aircraft and related
equipment relate to four aircraft (2012: three aircraft) purchased
on finance leases, one aircraft purchased outright (2012: none),
fleet improvements and capitalised maintenance on owned
aircraft.
In the six-month period to 31 March 2013, net book value of
property, plant and equipment and intangible assets disposed
totalled GBP58m (2012: GBP35m), primarily relating to advance
payments on the delivery and subsequent sale and leaseback of three
aircraft (2012: three aircraft and one spare engine) with a value
of GBP39m (2012: GBP34m).
13. Current trade and other payables
6-month 6-month
period ended period ended Year ended
31 March 31 March 30 September
2013 2012 2012
GBPm GBPm GBPm
---------------------------------- -------------- -------------- --------------
Customer deposits 2,585 2,385 1,669
Other 2,192 2,067 2,880
Current trade and other payables 4,777 4,452 4,549
---------------------------------- -------------- -------------- --------------
14. Movements in cash and net debt
Amounts
Cash due to Other
and cash Convertible related Bank Finance financial
equivalents bonds parties loans Loan notes leases liabilities Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------ ------------ ------------ ----------- ----------- ------------ ----------- ------------- --------
At 1
October
2012 830 (675) (10) (23) (1) (186) (43) (108)
Cash
movement (388) - - (457) - 12 - (833)
Non-cash
movement - (11) - (24) - (111) (1) (147)
Foreign
exchange 60 - - (5) - (14) (2) 39
At 31 March
2013 502 (686) (10) (509) (1) (299) (46) (1,049)
------------ ------------ ------------ ----------- ----------- ------------ ----------- ------------- --------
Amounts
Cash due to Other
and cash Convertible related Bank Finance financial
equivalents bonds parties loans Loan notes leases liabilities Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------ ------------ ------------ ----------- ----------- ------------ ----------- ------------- --------
At 1
October
2011 902 (654) (36) (30) (1) (132) (45) 4
Cash
movement (442) - - (637) - 8 - (1,071)
Non-cash
movement - (12) - 10 - (84) - (86)
Foreign
exchange (36) - 2 - - 3 - (31)
At 31 March
2012 424 (666) (34) (657) (1) (205) (45) (1,184)
------------ ------------ ------------ ----------- ----------- ------------ ----------- ------------- --------
15. Capital commitments
The following amounts have been contracted but not provided for
at the balance sheet date:
31 March 31 March 30 September
2013 2012 2012
GBPm GBPm GBPm
--------------------- --------- --------- -------------
Capital commitments 16 - 6
--------------------- --------- --------- -------------
In addition to the above items, at 31 March 2013 the Group had
contracted to purchase 25 (2012: 33) aircraft with initial
deliveries commencing in the third quarter of the financial year
2013 and then continuing through to 2015. At list price, the total
order value is US$3,264m (2012: US$4,289m) before escalations and
discounts.
The Group intends to refinance these aircraft in advance of
their delivery dates and therefore does not expect to use its own
cash resources for their purchase.
The Group's share of its joint ventures and associates capital
commitments was GBP7m at 31 March 2013 (2012: GBPnil).
16. Contingent liabilities
The Group is at any time defending a number of actions against
it arising in the normal course of business. Provision is made for
these actions where this is deemed appropriate. Information
regarding contingent liabilities and provisions in respect of tax
are disclosed on pages 110 and 111 of the Group's 2012 Annual
Report & Accounts. No other actions which are outstanding at 31
March 2013 are expected to have a material effect on these
accounts. The Directors consider that adequate provision has been
made for all known liabilities.
17. Related party transactions
(a) Ultimate controlling party
The Group's ultimate controlling party is TUI AG, a company
registered in Berlin and Hanover (Federal Republic of Germany).
(b) Related party transactions
The Group held receivables of GBP118 million (31 March 2012:
GBP83 million) and payables of GBP113 million (2012: GBP127
million) with its own joint ventures and with TUI AG and its
subsidiaries and joint ventures, which arose through the normal
course of business, including under the Hotel Framework Agreement
and Trademark Licence Agreement, details of which are set out in
Note 30 of the Group's 2012 Annual Report and Accounts. During the
current and prior financial periods, the Group transacted with its
joint ventures and associates in the normal course of business.
These transactions did not have a significant impact on the result
for the periods.
During the 6-month period to 31 March 2013, the Group received a
dividend of GBP28m (2012: GBPnil) from Sunwing Travel Group Inc, a
25% associate of the Group and invested GBP27m into Blue Diamond
Hotels and Resorts Inc, a 49% associate of the Group.
18. Post balance sheet events
No material events have occurred subsequent to the end of the
interim period that have not already been disclosed in this interim
report.
Responsibility statement of the Directors in respect of the
condensed consolidated interim financial information
The Directors confirm that to the best of their knowledge:
-- the condensed consolidated interim financial information
has been prepared in accordance with IAS 34 'Interim
Financial Reporting' as adopted by the EU;
-- the interim management report includes a fair review
of the information required by:
(a) DTR 4.2.7R of the Disclosure and Transparency
Rules, being an indication of important events
that have occurred during the first six months
of the financial year and their impact on the
condensed consolidated information financial information;
and a description of the principal risks and uncertainties
for the remaining six months of the year; and
(b) DTR 4.2.8R of the Disclosure and Transparency
Rules, being related party transactions that have
taken place in the first six months of the current
financial year and that have materially affected
the financial position or performance of the Group
during that period; and any changes in the related
party transactions described in the last annual
report that could do so.
The maintenance and integrity of the TUI Travel PLC website is
the responsibility of the Directors; the work carried out by the
auditors does not involve consideration of these matters and,
accordingly, the auditors accept no responsibility for any changes
that may have occurred to the financial statements since they were
initially presented on the website.
Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation
in other jurisdictions.
The Directors of TUI Travel PLC are listed on page 51 of the TUI
Travel PLC Annual Report and Accounts for the year ended 30
September 2012, except for the following changes that have taken
place pursuant to the Relationship Agreement between the Company
and TUI AG since the date of signing the Annual Report on 3
December 2012:
- On 8 February 2013, Rainer Feuerhake relinquished his role as
a Shareholder Non-Executive Director and was replaced by Friedrich
Joussen;
- On 25 March 2013, Dr Michael Frenzel retired from the Board as
Non-Executive Chairman and Shareholder Non-Executive Director and
was replaced by Friedrich Joussen; and
- On the same date, Sebastian Ebel joined the Board as a Shareholder Non-Executive Director.
On behalf of the Board of Directors
Will Waggott
Chief Financial Officer
9 May 2013
Introduction
We have been engaged by the Company to review the condensed
consolidated interim financial information for the six months ended
31 March 2013, which comprises the consolidated income statement,
the consolidated statement of comprehensive income, the
consolidated balance sheet, the consolidated statement of cash
flows, the consolidated statement of changes in equity and related
notes. We have read the other information contained in the
half-yearly financial report and considered whether it contains any
apparent misstatements or material inconsistencies with the
information in the condensed consolidated interim financial
information.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the Directors. The Directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
As disclosed in Note 1, the annual financial statements of the
Group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed consolidated interim financial
information included in this half-yearly financial report has been
prepared in accordance with International Accounting Standard 34,
'Interim Financial Reporting', as adopted by the European
Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed consolidated interim financial information in the
half-yearly financial report based on our review. This report,
including the conclusion, has been prepared for and only for the
Company for the purpose of the Disclosure and Transparency Rules of
the Financial Conduct Authority and for no other purpose. We do
not, in producing this report, accept or assume responsibility for
any other purpose or to any other person to whom this report is
shown or into whose hands it may come save where expressly agreed
by our prior consent in writing.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity' issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed consolidated interim
financial information in the half-yearly financial report for the
six months ended 31 March 2013 is not prepared, in all material
respects, in accordance with International Accounting Standard 34
as adopted by the European Union and the Disclosure and
Transparency Rules of the United Kingdom's Financial Conduct
Authority.
PricewaterhouseCoopers LLP
Chartered Accountants
London
9 May 2013
This information is provided by RNS
The company news service from the London Stock Exchange
END
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