RNS Number:7071T
Excel Airways Group PLC
30 December 2003


For Immediate Release                                         30 December 2003



                        EXCEL AIRWAYS GROUP PLC ("EAG")

        UNAUDITED PRELIMINARY RESULTS FOR THE YEAR ENDED 31 OCTOBER 2003

EAG, which includes Excel Airways the low cost charter airline marketed on
excelairways.com, announces preliminary results for the year ended 31 October
2003.





Key Points

  * Turnover increased 36% to #247 million (2002: #182 million);



  * Profit before tax increased 296% to #13.4 million (2002: #3.4million);



  * Earnings per share increased to 9.68p (2002: 2.69p), up 260%;



  * Excel Airways successfully launched low cost Caribbean charter service in
    November 2003 to Tobago, Barbados, St Lucia and Grenada;



  * Excel Airways capacity of 1.09 million round-trip seats was sold by Excel
    Aviation to a variety of tour operators, an increase of 225,000 seats over
    previous year;



  * Excel Aviation arranged 1.8 million seats (2002: 1.42 million seats) on
    behalf of Excel Airways and various other airline operators, mainly to
    destinations in Spain, Greece, Cyprus, Portugal, Egypt, Turkey and Italy;



  * Freedom Flights sold approximately 275,000 seats, an increase of 129% over
    the previous financial year. Increased seat-only capacity is being offered
    from seven UK airports including Gatwick and Manchester;



Commenting on current trading and prospects, Eamonn Mullaney, Chairman said:



"The successful launch of Excel's new Caribbean service provides a high quality,
charter travel experience to four popular Caribbean islands. Our Winter 2003/
2004 season programme has been substantially arranged and we are in the process
of finalising the arrangements for the Summer 2004 season. In view of the
progress that has been made with customers and passengers to date, the programme
established for our aircraft over the quiet Winter 2003/04 season and the
growing demand for low cost seats, we look forward to the future with
considerable optimism."

For further information, please contact:
Richard Darby                                   07970 799176


Suzanne Brocks                                  07776 234600

Buchanan Communications                         020 7466 5000



                             Chairman's  Statement



Introduction



The Iraq war and the threat beforehand had a serious impact on the business of
our tour operator customers, which reduced bookings made for summer holidays
during the peak booking period of January to March, with the resultant
uncertainty as to the continued requirement for all the charter seats
contracted. We worked closely with our customers during this period and,
wherever possible, adjusted capacity to meet their demand.



Results



In spite of the difficult trading environment, we achieved a financial result
above management expectations. In the year ended 31 October 2003, turnover
increased to #247 million (2002: #182 million) reflecting the growth in
passenger volumes. Profit before tax increased to #13.4 million (2002: #3.4
million). Earnings per share increased to 9.68p (2002: 2.69p)



Excel Airways, Excel Aviation (the seat broker) and Freedom Flights (the seat
wholesaler) are the Excel Airways Group operating subsidiaries.



Excel Airways



The core fleet of seven Boeing 737-800 aircraft was increased to meet the peak
summer demand by the seasonal lease of an additional B737-800, three wet-leased
B767-200s and three wet-leased B757s. The core fleet had been reduced in the
winter by leasing three of our aircraft to other airlines. This ability to
increase capacity to meet peak demand and reduce during the off peak season, is
a key element of our strategy and enables us to be flexible in meeting customer
requirements.



We continued our focus on cost efficiencies and with costs of 2.62p per
Available Seat Kilometre we can claim to be a "Low Cost Carrier", whilst
continuing to provide the traditional customer service features such as free
meals, in flight entertainment and seat selection at check-in.



The majority of the 1.09 million round trip seats produced by Excel Airways,
representing an increase of 210,000 over the previous year, were contracted by
Excel Aviation to our tour operator customers.



The launch and media promotion of the excelairways.com website made Excel
Airways capacity available for the first time direct to the public on popular
seat only destinations. In addition to attracting independent travellers, which
is a growing market segment, direct to the airline, the excelairways.com website
provided a medium for valuable passenger feedback.



Excel Aviation



The airline seat broking business, Excel Aviation, arranged 1.8 million seats
during the financial year, a 27% increase on the previous year of 1.42 million
seats, on behalf of Excel Airways and other airlines. The customer base,
although predominantly longstanding UK tour operators, includes a growing number
of customers looking for ad hoc charter capacity. We have grown our presence in
the European market with two aircraft based in Greece serving the French holiday
market. Excel Aviation has further developed its long haul broking business,
providing aircraft for a programme of flights to Florida.



The difficult trading conditions experienced by our customers in this financial
year put the skill of Excel Aviation to the test in finding flexible solutions
for matching capacity with required demand.



Freedom Flights



The in-house seat only tour operator, which also administers (on contract to
Excel Airways) all internet sales on excelairways.com, increased turnover by
124% to #42 million. A seat only product was offered from ten UK airports
including Gatwick and Manchester.



Customer Service



Once again our staff and external suppliers have rallied under the company
slogan "On time is the only time" and further improved our, already exemplary,
reputation for punctuality and with 84.2% of all flights operating on time, we
surpassed the previous years 80.75% achievement and this years target.



We believe that a reputation for delivering a punctual performance plays a major
role in both tour operators' and independent travellers' decisions on airline
choice. After safety and security, this aspect of our service is the main
priority. Operating a young, reliable fleet with a well planned, punctual
schedule also enables us to achieve efficient aircraft utilisation.



Corporate Governance



Although, as an AIM company, we are not required to comply with the Combined
Code, the Board took the decision, after last year's flotation, to establish a
remuneration committee and an audit committee with formally delegated duties.
Both of these committees have been fully operational during the year with
meetings being convened as and when necessary. It is the company's intention
that these committees and the corporate governance ethic, which they embody,
will continue to contribute to the effective management of the Group's
activities.



Dividends



The Board has decided not to declare a dividend for the year ended 31 October
2003, but, when the outcome of winter trading and customers forward booking
patterns for Summer 2004 have been established, will consider an interim
dividend for financial year 2003/2004.



Current Trading Prospects



In line with our strategy of matching capacity to seasonal demand, we have been
successful in leasing out five of our core B737-800 fleet to other airlines
during the Winter 2003/4 season, with a full operating programme contracted for
the remaining two aircraft. Capacity to supply Christmas and school holiday
mini-peaks during the winter has been contracted from third party airlines. We
successfully launched our new three class long haul service to the Caribbean at
the beginning of November and have already entered into contract negotiations
for a second aircraft to operate for a well established long haul specialist
tour operator.



At the end of March 2004 we will be taking delivery of the eighth Excel Airways
B737-800 aircraft and with two summer-only dry leased aircraft, we will operate
a fleet of ten B737s, four B767s and four B757s in Summer 2004.



We have significantly increased our planned investment in the promotion of
direct sales via the website. We have introduced a new marketing and promotional
team with successful experience of selling airline seats via the internet.
Additionally, we have engaged experts in yield management to control pricing. We
are confident that these measures will further increase the number of seats sold
direct via the website and in view of this and the indications of seat
requirements already received from tour operators for Summer 2004, we look
forward to the future with optimism.



Our core business continues to be the chosen supplier of good quality airline
seat capacity to independent tour operators. Our mission is to become the UK's
leading charter airline and we are grateful for the support we receive from our
customers, the dedication of our staff and the commitment of our third party
suppliers in the ongoing quest for the achievement of this goal.





Eamonn Mullaney

Chairman

30 December 2003



EXCEL AIRWAYS GROUP PLC



Unaudited consolidated profit and loss account for the year ended 31 October
2003



                                                         Note            2003             2002
                                                                        #'000            #'000

Turnover                                                              247,312          182,338

Cost of sales                                                       (218,956)        (161,643)

Gross profit                                                           28,356           20,695

Distribution costs                                                    (6,530)          (1,132)
Administrative expenses                                               (8,887)         (16,398)



Operating profit before goodwill
amortisation and exceptional items                                     12,986           11,704

Contributions to employee benefit trust                    2                -          (7,404)
Costs of reorganisation and introduction to AIM            2                -          (1,107)
Goodwill amortisation                                                    (47)             (28)




Operating profit                                                       12,939            3,165

Share of operating loss in associated undertaking                           -            (138)


Group operating profit                                                 12,939            3,027

Interest receivable and similar income                                    492              447
Interest payable and similar charges                                     (59)             (95)

Profit on ordinary activities before taxation                          13,372            3,379

Taxation on profit on ordinary activities                  3          (4,083)            (796)

Profit on ordinary activities after taxation                            9,289            2,583

Dividends                                                  4                -          (6,000)

Retained profit/(loss) for the financial year                           9,289          (3,417)

Earnings per share   - basic                               5            9.68p            2.69p
                     - diluted                             5            9.67p            2.69p

Earnings per share before
exceptional items    - basic                               5            9.72p            9.28p
                     - diluted                             5            9.72p            9.28p




All recognised gains and losses are included in the profit and loss account.



All amounts relate to continuing activities.



EXCEL AIRWAYS GROUP PLC



Unaudited consolidated balance sheet at 31 October 2003



                                             Note           2003          2003         2002          2002
                                                           #'000         #'000        #'000         #'000

Fixed assets
Intangible assets                                            390                        437
Tangible assets                                            3,950                      3,604

                                                                         4,340                      4,041
Current assets
Stocks                                                       150                        150
Debtors    - due within one year               6          23,543                     13,971
           - due after more than one year      6           4,059                      3,918

                                                          27,602                     17,889
Cash at bank and in hand                                  16,740                     20,420


                                                          44,492                     38,459
Creditors: amounts falling due
within one year                                7        (31,732)                   (35,318)

Net current assets                                                      12,760                      3,141

Total assets less current liabilities                                   17,100                      7,182

Creditors: amounts falling due
after more than one year                                 (1,188)                    (1,238)

Provisions for liabilities and charges                     (818)                      (139)

                                                                       (2,006)                    (1,377)

Net assets                                                              15,094                      5,805


Capital and reserves
Called up share capital                                                  4,800                      4,800
Merger reserve                                                           1,275                      1,275
Profit and loss account                                                  9,019                      (270)

Shareholders' funds - equity                                            15,094                      5,805



Approved by the Board on 30 December 2003.



EXCEL AIRWAYS GROUP PLC



Unaudited consolidated cash flow statement for the year ended 31 October 2003



                                                                              Note         2003       2002
                                                                                          #'000      #'000

Net cash (outflow)/inflow from operating activities                             9       (2,276)     13,578

Returns on investments and servicing of finance                                10           433        352

Taxation                                                                       10         (694)    (1,195)

Capital expenditure and financial investment                                   10         (927)    (2,465)

Acquisitions and disposals                                                     10             -      1,613

Equity dividends paid                                                                         -    (6,000)

Net cash (outflow)/inflow before use of liquid resources
and financing                                                                           (3,464)      5,883

Management of liquid resources                                                 10         6,194    (2,004)

Financing                                                                      10         (100)      1,292

Increase in cash in the year                                                              2,630      5,171




Reconciliation of net cash flow to movement in net funds                                   2003       2002
                                                                                          #'000      #'000

Increase in cash in the year                                                              2,630      5,171

Cash movements relating to debt and lease financing                                         100    (1,292)

Cash (inflow)/outflow from (decrease) / increase in liquid resources                    (6,194)      2,004


(Decrease)/increase in net funds resulting from cash flows                              (3,464)      5,883
Inception of finance leases                                                                 (8)          -


Movement in net funds in year                                                           (3,472)      5,883
Net funds at beginning of year                                                           18,955     13,072


Net funds at end of year                                                       11        15,483     18,955



EXCEL AIRWAYS GROUP PLC



Notes forming part of the preliminary announcement for the year ended 31 October
2003



1          Accounting policies



The accounting policies used in the preparation of these unaudited results are
consistent with those policies adopted by the Group in its published 2002
non-statutory financial statements and the following policy in relation to a
provision for future aircraft maintenance costs.



Provision is made for the estimated future non-prepaid element of the costs of
major overhauls of leased airframes, engines and auxiliary power units by making
appropriate further charges to the profit and loss account.  The expensing of
these further amounts, which arise as a consequence of having to comply with the
aircraft rectification obligations placed on the Group by the operating lease
agreements, are charged by reference to the number of hours or cycles operated
each year.



The provision made in the current financial year is #679,000, which is included 
with provisions for liabilities and charges on the balance sheet (2002: No 
charge required).



2          Exceptional administrative expenses
                                                                                       2003           2002
                                                                                      #'000          #'000

Contributions to employee benefit trust                                                   -          7,404
Costs of reorganisation and introduction to AIM                                           -          1,107




Contributions to employee benefit trust



The contributions to the employee benefit trust represented the provision for
payments made in respect of the year ended 31 October 2002 by Excel Airways
Limited, Excel Aviation Limited and Freedom Flights Limited to the Excel Airways
Group plc employee benefit trust. On 11 November 2002, the employee benefit
trust used the contributions to acquire 7,312,446 ordinary shares in the Company
from Libra Holidays Group Limited at #1.0125 per share.



Subsequent to the above and also on 11 November 2002, the 7,312,446 ordinary
shares in the Company were allocated, by the trustees, to sub-trusts for the
benefit of specified key employees and directors of the Group.



Costs of reorganisation and introduction to AIM



The reorganisation costs and introduction to AIM costs related to the fees and
expenses incurred in establishing the new group structure, and in obtaining
admission to trading on AIM from 20 November 2002, respectively.





EXCEL AIRWAYS GROUP PLC



Notes forming part of the preliminary announcement for the year ended 31 October
2003 (Continued)



3          Taxation on profit from ordinary activities


                                                        2003        2003        2002        2002
                                                       #'000       #'000       #'000       #'000

Current tax

UK corporation tax on profits of the year                  -                     670
Adjustments in respect of prior years                      1                       -
Amounts payable for group relief received              3,991                     773

                                                                   3,992                   1,443
Deferred tax

Origination and reversal of timing differences                        91                   (647)

Taxation on profit on ordinary activities                          4,083                     796



The tax assessed for the year is lower (2002: higher) than the standard rate of
corporation tax in the UK.  The differences are explained below:


                                                                                      2003           2002
                                                                                         #              #

Profit on ordinary activities before tax                                            13,372          3,379

Profit on ordinary activities at the standard rate
of corporation tax in the UK of 30% (2002 : 30%)                                     4,012          1,014

Effects of:
Expenses not deductible for tax purposes                                                69            333
Capital allowances for year in excess of depreciation                                  (6)           (40)
Utilisation of tax losses brought forward                                             (93)           (44)
Adjustment to tax charge in respect of previous years                                    1              -
Other timing differences                                                                 9             12
Tax losses available for offset against future trading profits                           -            168

Current tax charge for year                                                          3,992          1,443



EXCEL AIRWAYS GROUP PLC



Notes forming part of the preliminary announcement for the year ended 31 October
2003 (Continued)



4          Dividends


                                                                     2003                 2002
                                                                    #'000                #'000

Special final dividends paid in 2002                                    -                6,000




In 2002 special final dividends amounting to #3,550,000 and #2,450,000 were paid
to shareholders by Excel Aviation Limited and Excel Airways Limited
respectively.  The total amount of #6,000,000 was ultimately received by Libra
Holidays Group Limited.



No dividend has been recommended for the 2003 financial year.



5          Earnings per share



The calculation of earnings per share for the year ended 31 October 2003 is
based on the profit after taxation of #9,289,000 (2002: #2,583,000).  The
calculation of basic earnings per share and diluted earnings per share is based
on a weighted average number of shares in issue during the year.  The number of
shares used in these calculations and the reconciliation of denominators used
for basic and diluted earnings per share calculations is set out in the table
below:


                                                            Basic            Effect of            Diluted
                                                                          share number             number
                                                                               options

Year ended 31 October 2003                             96,000,000               43,214         96,043,214

Year ended 31 October 2002                             96,000,000                    -         96,000,000



            Additional disclosure has been provided in respect of earnings per
share before amortisation of goodwill and exceptional items as the directors
believe this gives a better indication of ongoing maintainable earnings.


                                                                                          2003         2002
                                                                                         pence        pence

Basic earnings per share                                                                  9.68         2.69
Effect of add back of:
Amortisation of goodwill                                                                  0.04         0.03
Exceptional items (see note 2)                                                               -         8.87
Taxation adjustment on allowable exceptional items at 30%                                    -       (2.31)

Adjusted earnings per share before amortisation
of goodwill and exceptional items                                                         9.72         9.28



EXCEL AIRWAYS GROUP PLC



Notes forming part of the preliminary announcement for the year ended 31 October
2003 (Continued)



6          Debtors


                                                                                   2003           2002
                                                                                  #'000          #'000
Amounts due within one year:

Trade debtors                                                                     2,446          2,236
Amounts due from parent undertaking (secured - see below)                        14,723          7,198
Other debtors                                                                     3,130            503
Deferred tax asset                                                                   75            168
Corporation tax recoverable                                                         145            223
Prepayments and accrued income                                                    3,024          3,643

                                                                                 23,543         13,971


Amounts due after more than one year:

Other debtors                                                                     4,059          3,918



The Company announced on 3 November 2003, that on 31 October 2003, its
subsidiary, Excel Aviation Limited had entered into a consolidated loan
agreement with the Company's majority shareholder, Libra Holidays Group Limited,
which currently holds 79.5% of the company's issued share capital. The
consolidated loan, which incorporates a previous loan, is repayable on 30 April
2004 and interest accrues at 1.5% over Barclays Bank base rate.



As security for the extended credit terms, Libra Holidays Group Limited has
deposited share certificates for 39.4 million shares in the Company with Excel
Aviation Limited.



7          Creditors: amounts falling due within one year


                                                                                   2003           2002
                                                                                  #'000          #'000

Bank loans (secured)                                                                 58             90
Bank overdrafts                                                                       -            116
Trade creditors                                                                   7,626          7,425
Tax and social security                                                             502            335
Obligations under finance leases                                                     11             21
Other creditors                                                                   2,012          1,669
Amounts due to fellow group undertakings                                             78          1,652
Accruals and deferred income                                                     21,445         24,010

                                                                                 31,732         35,318



The bank loan is secured on a fixed charge by way of a legal mortgage over the
Group's freehold property.



EXCEL AIRWAYS GROUP PLC



Notes forming part of the preliminary announcement for the year ended 31 October
2003 (Continued)



8          Creditors: amounts falling due after more than one year




                                                                                      2003         2002
                                                                                     #'000        #'000

Bank loan (secured - see note 7)                                                     1,178        1,216
Loan from related undertaking                                                            -           22
Obligations under finance leases                                                        10            -

                                                                                     1,188        1,238



The bank loan is repayable by monthly instalments for a period of 15 years to
March 2017 with interest payable at 1.5% above the lender's base rate.



9          Reconciliation of operating profit to net cash (outflow)/inflow from
operating activities




                                                                                       2003         2002
                                                                                      #'000        #'000

Operating profit                                                                     12,939        3,165
Amortisation of goodwill                                                                 47           28
Depreciation                                                                            587          410
Decrease in stocks                                                                        -            -
Increase in debtors                                                                (13,875)      (5,838)
(Decrease)/increase in creditors                                                    (1,976)       15,792
Loss on disposal of fixed assets                                                          2           21

Net cash (outflow)/inflow from operating activities                                 (2,276)       13,578



10   Analysis of cash flow headings


                                                                                  2003          2002
                                                                                 #'000         #'000

Returns on investments and servicing of finance
              Interest received                                                    492           447
              Interest paid                                                       (47)          (83)
              Interest on finance leases                                          (12)          (12)

                                                                                   433           352


Taxation
              Corporate tax net receipts/(payments)                                 79       (1,195)
              Payments to fellow group undertakings for group relief             (773)             -

                                                                                 (694)       (1,195)


Capital expenditure and financial investment
              Purchase of tangible fixed assets                                  (927)       (2,506)
              Proceeds from sale of tangible fixed assets                            -            41

                                                                                 (927)       (2,465)

Acquisitions and disposals
              Purchase of subsidiary undertakings                                    -         (793)
              Cash acquired with subsidiary undertakings                             -         2,406

                                                                                     -         1,613

Management of liquid resources
              Decrease/(increase) in short terms deposits                        6,194       (2,004)

Financing
              Drawdown of new bank loan                                              -         1,340
              Bank loan repayments                                                (92)          (34)
              Capital element of finance lease payments                            (8)          (14)

                                                                                 (100)         1,292





EXCEL AIRWAYS GROUP PLC



Notes forming part of the preliminary announcement for the year ended 31 October
2003 (Continued)



11        Analysis of net funds


                                                At                                                  At
                                        1 November          Cash          Other non-        31 October
                                              2002           flow       cash changes              2003
                                             #'000          #'000              #'000             #'000

Short term bank deposits                    18,472        (6,194)                  -            12,278
Cash at bank and in hand                     1,948          2,514                  -             4,462
Overdrafts                                   (116)            116                  -                 -
Net cash                                     1,832          2,630                  -             4,462
Liquid resources                            18,472        (6,194)                  -            12,278

Debt due after one year                    (1,238)              -                 60           (1,178)
Debt due within one year                      (90)             92               (60)              (58)
Finance leases                                (21)              8                (8)              (21)
Financing                                  (1,349)            100                (8)           (1,257)

Total                                       18,955        (3,464)                (8)            15,483



12        Reporting on financial information



            The results and summary balance sheet incorporate the results of
Excel Airways Group plc and all its subsidiaries made up to 31 October 2003.



The financial information contained in this preliminary announcement does not
constitute statutory accounts within the meaning of section 240 of the Companies
Act 1985.



Copies of the Group's audited financial statements which to date have not been
filed at Companies House, or reported on by the Company's auditors, will be
available from the Company Secretary at Mitre Court, Fleming Way, Crawley, West
Sussex, RH10 9NJ, from mid January 2004.




                      This information is provided by RNS
            The company news service from the London Stock Exchange
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