TIDMALLG
RNS Number : 9366Z
All Leisure Group PLC
13 February 2014
Trading Statement
Thursday 13 February 2014
As part of its financial year end update, the board of All
Leisure group plc ("the Group")(AIM: ALLG), the niche cruise and
tour operator specialising in the over-55s market, announces a
trading update ahead of releasing its full year audited results on
24 February 2014. Underlying trading for the year has been as
expected, however the overall result will be impacted by one off
items.
In the release of the Group's results for the six months ended
April 2013 on 30 July 2013, it was announced that the full year
results to October 2013 would include costs associated with the
on-going closure of the Group's head office in Burgess Hill in the
region of GBP1.5m. This was subsequently completed on time and
within budget. Since this announcement there have been a number of
additional operational and non-operational adverse factors which,
when combined with this original charge, will lead to a reported
unaudited IFRS loss before taxation of between GBP13 million
and
GBP14 million (Year to 31 October 2012: audited profit before
taxation of GBP0.8m million) of which the vast majority relates to
non cash items.
Non operational factors
The closure of the Group's Burgess Hill headquarters and
relocation to Market Harborough was on-going at the time of the
interim results announcement in July 2013. Following this exercise,
two further restructuring decisions were taken, namely the closure
of the Group's Southampton office and the related write-off of
software and other related non-cash items. These additional costs
total approximately GBP0.6m and are in addition to the GBP1.5
million charge already announced in July. These additional items
will be shown in the full year results to end October 2013 included
within separately disclosed items.
Following the annual valuation of the Group's fleet, the board
agreed that market conditions made it necessary to recognise an
impairment of approximately GBP6.7 million to the value of mv
Discovery. This non cash item will also be included within
separately disclosed items in the results for the twelve months to
October 2013. The market value of mature cruise ships has reduced
significantly in the last twelve months and it has been decided
that the loss-making mv Discovery will be disposed of at the end of
this summer. Following the planned disposal, the company's
underlying profits should benefit from the elimination of mv
Discovery trading losses which are currently in the region of GBP4m
per annum.
The impact of these non-operational factors (including charges
announced with the interim results) is expected to result in a
Group charge under separately disclosed items of approximately
GBP9.9 million.
Operational factors
While underlying trading is as expected, a number of unforeseen
adverse issues have also created operational headwinds in the
financial year just ended.
The interim results statement in July highlighted the cost of
cancelling cruises on the mv Voyager due to mechanical breakdown as
well as challenges to the Discover Egypt brand as a result of
political unrest. Foreign Office advice at the time required all
Nile cruises to be cancelled but it was anticipated at the time
that the situation would ease by the end of August, allowing
several months of more normal trading before the year end. In fact
the problems did not abate until November 2013 resulting in
virtually no additional revenue from this brand before the Group's
year end. Instead, the Group incurred the additional unexpected
costs of refunding passengers already booked to depart over this
period. The Board subsequently took the decision to reduce Discover
Egypt's overheads and the business is once again trading
profitably. The final weeks of the financial year also saw the
cancellation of three Travelsphere escorted tours to the USA (with
full refunds) due to the closure of certain Government-operated
facilities such as National Parks, hotels and monuments.
The impact of these operational factors is expected to impact
underlying results adversely by approximately GBP0.5 million.
Excluding these adverse operational factors, the Group traded in
line with expectations and expect to report an underlying trading
profit (before separately disclosed items and losses on certain
derivative contracts) at a broadly similar level to last year. The
equivalent result for the prior year was GBP0.9m.
Currency factors
Under current accounting policies, the Group does not adopt
hedge accounting. As a result all realised and unrealised profits
and losses from currency and fuel hedging are reported directly
through the Consolidated Income Statement. The second half of the
financial year has been particularly challenging from a currency
perspective and as a result the Group expects to report a non cash
charge of approximately GBP4.3 million (2011/12: GBP1.7 million
credit) in the twelve months to October 2013.
Current Trading
Since the year end, trading has been robust and the Board is
satisfied that the Group is trading profitably.
Cruising
Voyages of Discovery - mv Voyager is sailing in the Far East,
currently at sea between Japan and Taiwan and returns to Portsmouth
in the spring. Whilst passenger revenues are behind last year,
overall sales are considerably better and booked income exceeds
last year's full revenue. To date 83.7% of budgeted revenues for
the current financial year have been sold. Year on year, both
capacity and booking revenues have increased by approximately 10.5%
with booking revenues already exceeding last year's total
revenue.
Swan Hellenic - mv Minerva, currently circumnavigating South
America, in the Falkland Islands returns to Portsmouth in the
spring. Minerva is trading well although passenger revenues to date
are slightly lower per person year on year; although booking
revenues are 11.1% ahead of the same time last year and to date we
have sold 87.9% of budgeted revenue for the current financial
year.
Hebridean Island Cruises - Hebridean Princess continues to trade
from strength to strength. As usual the cruising season finished in
November 2013 and Hebridean Princess entered its planned annual dry
dock . Passenger cruises will recommence early next month.
Hebridean Princess will operate a slightly shorter season, year on
year, with capacity reduced by 4.2%; with daily revenues improved
year on year. To date, the total value of forward bookings taken is
up 27% compared to the same point last year, and 81.4% of this
year's budgeted revenue has already been sold. In August this year,
Hebridean Princess will be cruising to Norway in addition to her
traditional Scottish itineraries.
River Cruising - Both Swan Hellenic and Hebridean Island Cruises
will operate a small river programme of one week duration charters
during Summer 2014 on European rivers. Sales to date are
satisfactory.
Tour Operating
Travelsphere the escorted tours specialist is trading
satisfactorily with destinations such as North America,
Balkans/Eastern Mediterranean & China proving popular.
Travelsphere has decided not to operate a committed river cruise
programme for 2014 on the Rhine and Danube, which we have done in
previous years, due to over capacity in the market place.
Travelsphere sales year on year are 1.8% ahead after excluding the
river cruising commitment with passenger revenues slightly
ahead.
Just You, the leading singles travel brand is also trading in
line with expectations. The Christmas programme was extremely
popular and Vietnam is selling well. Compared to the same time last
year sales are on a par and passenger revenues are slightly
ahead.
Discover Egypt - As already outlined, due to the political and
civil unrest in Egypt, the Discover Egypt operation was suspended
for four months and, whilst operations recommenced in November
2013, advance and current sales are very limited but there has been
a slow improvement. We have substantially reduced the overhead year
on year and as a result of this, we expect Discover Egypt to make a
small contribution in the current year. Discover Egypt currently
has no commitment on aircraft seats, hotel rooms or cabin
berths.
R J Allard
Executive Chairman
All Leisure group PLC
Roger Allard (Executive Chairman) Tel: +44 7836 382767
Ian Smith (Group Chief Executive Officer) Tel: +44 1858 588396
Chris Gadsby (Group Finance Director) Tel: +44 1858 588216
Panmure Gordon (UK) Limited
Adam Pollock / Andrew Godber Tel: + 44 207 459 3600
Citigate Dewe Rogerson
Ginny Pulbrook Tel: +44 207 282 2945
Lindsay Noton Tel: +44 207 282 1032
This information is provided by RNS
The company news service from the London Stock Exchange
END
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