TIDMALLG
RNS Number : 9231E
All Leisure Group PLC
16 February 2015
16 February 2015
All Leisure Group plc
Preliminary results for the year ended 31 October 2014
Financial Highlights
-- Underlying operating profit* before separately disclosed
items and gains/losses on derivative contracts improves to GBP0.9
million (2013: GBP0.8 million).
-- Improvement in results despite GBP1.9 million lower earnings
due to the unfortunate political events in Crimea and Ukraine. This
issue caused three key cruises to be re-scheduled, causing customer
cancellations and heavy discounting to achieve occupancy levels on
these cruises.
-- Before separately disclosed items the net profit was GBP0.6
million, an improvement of GBP4.3 million in comparison to
2013.
-- Full year pre-tax loss of GBP7.2 million (2013: loss of
GBP13.6 million). This result is after a charge of GBP8.2 million
(2013: GBP9.9 million) for separately disclosed items, primarily
the loss on disposal of the mv Discovery vessel (GBP7.1 million
loss in the year).
-- Improved cash position; Total bank and cash of GBP15.1
million (2013: GBP14.3 million) at the balance sheet date.
Operational Highlights
-- On a like-for-like basis** passengers grew 1%, with Cruise
passengers up an excellent 10% and Tour passengers down 2% in the
year. Average Revenue per Passenger grew 2.7% to GBP2,410 in the
year. Including passenger numbers from activities now discontinued
and from the political uncertainty impacting our Discover Egypt
business, total passengers fell by 5%.
-- The sale of the loss-making mv Discovery vessel in October
was a significant step forward in de-risking the business and
positioning the Group for improved future profitability.
-- Continued consolidation of the cruise and tour operating
businesses within one head office location in Market Harborough,
realising GBP2.3m selling and administration savings in addition to
the GBP1m disclosed last year.
-- The senior management team was further strengthened.
-- Successful launch of over 70 new Travelsphere and Just You tours.
Strategy
-- Achieve profitable growth through the provision of an
increasing choice of niche holidays targeted at the UK over 55's
market.
Commenting on the results the Chairman Roger Allard said
"Over the past year, the Group has continued its work to
consolidate the former "All Leisure Group" and "Page & Moy"
businesses into one business. This work, together with the further
strengthening of the management team, has created an organisation
that is fit for the future with effective leadership and a lean,
cost-effective structure."
For further information:
All Leisure Group plc 01858 410 456
Roger Allard Chairman
Ian Smith Chief Executive Officer
Nigel Arthur Group Finance Director
Financial Public Relations: Citigate Dewe Rogerson
Lindsay Noton 020 7282 1032
Broker and Nominated Panmure Gordon
Adviser
Andrew Godber/ Charles
Leigh-Pemberton 020 7886 2500
*Underlying profit is stated before certain items separately
disclosed in the Group's Annual Report. These items total GBP8.2
million (2013: GBP9.9 million) before tax and are disclosed in note
6.
**Like-for-like passenger figures exclude the European River
Cruise charter programme and Discover Egypt given the effect of
political uncertainty on sales to this destination.
All Leisure Group plc
Chairman's Statement
Over the past year, the Group has continued its work to
consolidate the former "All Leisure Group" and "Page & Moy"
companies into one business. This work, together with the further
strengthening of the management team, has created an organisation
that is fit for the future with effective leadership and a lean,
cost-effective structure.
I am delighted to report that, before separately disclosed items
and gains/losses on derivative contracts, the Group generated an
underlying operating profit of GBP0.9m for the year, GBP0.1m ahead
of last year. Furthermore, underlying Profit after tax improved by
GBP4.4m versus last year to close at GBP0.6m. Our net result for
the year after separately disclosed items was a loss of GBP7.5m,
although this is largely due to the GBP7.1m loss on disposal of mv
Discovery in October. Total passengers fell by 5%, however
increased by 1% in the year on a like-for-like basis, and total
Revenue also grew 1% on a like-for-like basis. Like-for-like
figures exclude the European River Cruise charter programme and
Discover Egypt given the effect of political uncertainty on sales
to this destination.
This was a creditable performance given some of the headwinds
that we faced in 2013/14, the most significant of which was the
crisis in Crimea and the Ukraine. Here we had no option but to make
late changes to our three scheduled Black Sea and Eastern
Mediterranean itineraries, cruises that are normally amongst our
most profitable. The changes resulted in substantial cancellations
and subsequent discounting to fill capacity. The profit
contribution from these cruises was GBP1.7m lower than the
equivalent itineraries last year, and GBP1.9m lower than our
expectations in the year. The political situation in Egypt also
impacted our Tour Operating performance, causing sales of our
Discover Egypt brand to fall by GBP1.2m in the year.
Tour Operations passengers declined by 10% in the year, partly
offset by a 4% increase in average revenue per passenger. The
decline in passenger numbers was largely due to continuing
political uncertainty in Egypt combined with a decision to
discontinue the European River Cruise charter programme. Excluding
these items, like-for-like passengers declined 2%. Overall the Tour
Operating business benefitted from an innovative programme of new
product development; in 2014 the Group launched over 70 new tour
itineraries across the Travelsphere and Just You brands, taking the
overall programme size to over 200 separate holiday itineraries.
For Travelsphere, North America remains a core destination and has
had a good year, driven by the introduction of some new tours.
Italy and Croatia have also traded well, with Croatia being the
destination of our best-selling new holiday of 2014. Following its
re-launch in September 2013, Just You performed well this year with
like-for-like passengers up 1%, demonstrating the potential of this
brand. Like Travelsphere, Italy and North America performed well
for Just You in 2014 and our City break programme has been very
popular.
Overall the Tour Operating business continues to operate
profitably and enjoys a strong following from its loyal customer
base.
Despite the Crimea/Ukraine issues, the Cruising business had a
stronger year with revenues GBP1.7m higher and total passenger
numbers up 10% at 17.9k versus 16.3k last year. I am particularly
delighted with the progress made in the year to build the Voyages
of Discovery brand. Firstly, the disposal of mv Discovery was a
major step in our turnaround as the vessel was loss-making and in
need of significant investment. The vessel was sold for $5m in
October 2014, giving rise to a loss on disposal of GBP7.1m which we
have disclosed separately. During the year we continued to
establish mv Voyager as the flagship of the Voyages of Discovery
brand. We also continue to invest in mv Hebridean Princess to
maintain her 5 star status and profitable contribution to the
business.
Over the past year we have continued our efforts to turn around
the cruise business, and we believe the foundations for growth have
now been firmly established.
The outlook for 2015 remains challenging, as the UK economy
continues its slow recovery. The rationalisation work that has been
carried out over the last few years will continue to benefit the
results, as we have a leaner cost base and a more focussed
organisation. Lower fuel prices will also help the Group to contain
its costs, although our marine fuel requirements are circa 50%
hedged for the coming year at higher prices and the full benefit of
current fuel pricing will therefore not be realised until 2016.
Furthermore, the variability of marine fuel price is limited by the
fixed costs of processing and transport inherent in the product.
The currency outlook is a mixed picture for 2015; the weaker Euro
is expected to stimulate demand for European Tours in particular,
whilst the current strength of the US Dollar against Sterling is
expected to make our popular US Tour destinations less attractive
to UK consumers and will impact dollar-denominated fuel and
destination costs.
In summary, the Group has made significant progress in the past
year and the Directors and I are confident of a positive future for
the business. My sincere thanks go to all staff across the Group,
for their commitment, hard work and dedication in 2014.
R J Allard
Chairman
Key Performance Indicators
The following table provides current and historical key
performance indicators ('KPI's) employed by the Group:
FY2014 FY2013
Revenues (GBPm) 138.9 142.1
Underlying operating profit* before gains/losses
on derivative contracts and separately disclosed
items (GBPm) 0.9 0.8
Operating loss before gains/losses on derivative
contracts (GBPm) (7.3) (9.1)
Underlying operating profit/(loss)* for the
financial year (GBPm) 1.3 (3.5)
Underlying profit/(loss) before tax for the
financial year (GBPm) 1.0 (3.8)
Loss before tax for the financial year (GBPm) (7.2) (13.6)
Net assets (GBPm) 11.7 19.2
Cash generated/(used) by operating activities
(GBPm) 4.1 (3.3)
Capital expenditure (GBPm) 2.4 8.3
Total assets (GBPm) 80.2 92.9
Basic loss per share (pence) (12.1) (21.7)
Other operating data
The following table provides the current and historical figures
for the principal operating KPIs employed by the Group:
FY2014 FY2013
Passengers carried - cruise 17,885 16,274
Passengers carried - tour operations 39,762 44,286
Average revenue per passenger -
cruise (GBP) 3,778 4,045
Average revenue per passenger -
tour (GBP) 1,794 1,723
Average revenue per passenger -
overall (GBP) 2,410 2,347
Cruise
Passenger nights (i) 235,850 213,760
Available lower berth nights ("ALBNs")
(ii) 308,668 276,677
Occupancy (%) 76% 77%
Fuel consumption (metric tonnes)
(iii) 15,744 14,754
Fuel cost per metric tonne GBP
(iii) 433 473
Ships - owned 2 3
Ships - leased 1 1
Notes:
(i) Calculated as the total passengers carried multiplied by the
total number of revenue sailing days.
(ii) Calculated as the ship capacity multiplied by the total number of revenue sailing days.
(iii) Excludes unrealised gains and losses on fuel hedges and
fuel consumption during Allways charter.
* Underlying profit is stated before certain items separately
disclosed in the Group's Annual Report. These items total GBP8.2
million (2013: GBP9.9 million) before tax and are disclosed in note
6.
All Leisure Group plc
Consolidated Income Statement
For the year ended 31 October 2014
Note 2014 Restated
(see note
13)
GBP'000 2013
Total GBP'000
Total
Revenue 4,5 138,912 142,143
Costs, expenses and other income
Operating (117,549) (116,271)
Selling and administrative (23,558) (28,173)
Depreciation 7 (3,863) (5,487)
Amortisation 7 (1,253) (1,344)
Operating loss before gains/(losses)
on derivative contracts (7,311) (9,132)
Gains/(losses) on derivative contracts 5 445 (4,277)
Operating loss 5,7 (6,866) (13,409)
Investment revenue 4 70 160
Finance costs (429) (387)
Loss before tax (7,255) (13,636)
Tax (charge)/credit 8 (258) 226
Loss for the financial year 5 (7,483) (13,410)
Earnings per share (pence):
Basic 10 (12.1)p (21.7)p
Diluted 10 (12.1)p (21.7)p
The results are after separately disclosed items of GBP8.0m
(2013: GBP9.6m), further details of these items are included in
note 6.
All results are derived from continuing operations.
All results are attributable to equity holders of the parent
Company.
All Leisure Group plc
Consolidated Statement of Comprehensive Income
For the year ended 31 October 2014
2014 2013
GBP'000 GBP'000
Total Total
Loss for the financial year (7,483) (13,410)
Items that will not be reclassified
subsequently to profit or loss:
Gains/(losses) on property revaluation 380 (24)
Re-measurement of net defined
benefit liability (491) 1,258
Deferred tax on pensions 98 (365)
Total comprehensive loss for
the financial year (7,496) (12,541)
All Leisure Group plc
Consolidated Statement of Changes in Equity
At 31 October 2014
Share Currency
Share premium Revaluation translation Retained
capital account reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 November 2012 617 13,346 47 12 17,756 31,778
______ _______ ________ ______ _______ ______
Loss for the financial
year - - - - (13,410) (13,410)
Revaluation of property - - (24) - - (24)
Re-measurement of net
defined benefit liability - - - - 1,258 1,258
Deferred tax on pensions - - - - (365) (365)
______ _______ ________ ______ _______ ______
Total comprehensive loss
for the financial year - - (24) - (12,517) (12,541)
______ _______ ________ ______ _______ ______
At 31 October 2013 617 13,346 23 12 5,239 19,237
======= ======== ========= ======= ======== ======
At 1 November 2013 617 13,346 23 12 5,239 19,237
_______ _______ _______ _______ _______ _______
Loss for the financial
year - - - - (7,483) (7,483)
Revaluation of property - - 380 - - 380
Re-measurement of net
defined benefit liability - - - - (491) (491)
Deferred tax on pensions - - - - 98 98
Total comprehensive loss
for the financial year - - 380 - (7,876) (7,496)
Disposal of property (23) - 23 -
At 31 October 2014 617 13,346 380 12 (2,614) 11,741
Revaluation reserve: At 31 October 2014 Budworth Hardcastle, an
external valuer, carried out a valuation of Compass House, Market
Harborough which confirmed the property value at open market value
with vacant possession to be GBP3,750,000.
Currency translation reserve: At 31 October 2014 one of the
Group's subsidiary companies has a US$ functional currency and the
translation reserve represents the exchange gains and losses
arising on the retranslation of the net assets of this subsidiary
entity.
All Leisure Group plc
Consolidated Balance Sheet
At 31 October 2014
2014 2013
GBP'000 GBP'000
Non-current assets
Intangible assets 20,185 21,324
Property, ships, plant and equipment 29,132 39,567
Trade and other receivables 3,686 3,840
Deferred tax asset 1,450 1,739
54,453 66,470
Current assets
Inventories 1,402 2,312
Trade and other receivables 9,230 9,400
Derivative financial instruments 20 91
Assets held for sale - 350
------------- --------
Restricted bank balances 3,530 3,594
Cash and bank balances 11,600 10,685
------------- --------
Total current bank balances
and cash in hand 15,130 14,279
25,782 26,432
Total assets 80,235 92,902
Current liabilities
Trade and other payables (53,532) (57,321)
Current tax liabilities (17) (5)
Borrowings (580) (580)
Provisions (1,497) (358)
Derivative financial instruments (4,431) (4,947)
(60,057) (63,211)
Net current liabilities (34,275) (36,779)
Non-current liabilities
Borrowings (4,050) (4,622)
Deferred tax liabilities (2,153) (2,299)
Retirement benefit obligations (2,234) (2,101)
Long term provisions - (1,432)
(8,437) (10,454)
Total liabilities (68,494) (73,665)
Net assets 11,741 19,237
Equity
Share capital 617 617
Share premium account 13,346 13,346
Revaluation reserve 380 23
Currency translation reserve 12 12
Retained earnings (2,614) 5,239
Total equity 11,741 19,237
The financial statements of All Leisure Group plc, registered
number 01609517, were approved by the Board of directors and
authorised for issue on 12 February 2015.
They were signed on its behalf by:
N Arthur
Director
All Leisure Group plc
Consolidated Cash Flow Statement
For the year ended 31 October 2014
2014 2013
Note GBP'000 GBP'000
Net cash inflow/(outflow) from operating
activities 11 4,077 (3,312)
Investing activities
Interest received 70 152
Rental income 6 8
Proceeds on disposal of property,
ships, plant and equipment 3,133 499
Proceeds on disposal of assets held
for sale 350 250
Purchases of property, ships, plant
and equipment and intangible assets (2,428) (8,348)
Movement in restricted cash held
on deposit 64 1,972
Net cash generated/(used) from investing
activities 1,195 (5,467)
Financing activities
Repayment down of borrowings (580) (580)
Net cash generated/(used) in financing
activities (580) (580)
Net increase/(decrease) in cash and
cash equivalents 4,692 (9,359)
Cash and cash equivalents at beginning
of year 10,685 18,242
Effect of foreign exchange rate changes (3,777) 1,802
Cash and cash equivalents at end
of year 11,600 10,685
All Leisure Group plc
Notes to the Preliminary Results
For the year ended 31 October 2014
1. Financial information
The financial information set out in the announcement does not
constitute the Company's statutory financial statements for the
years ended 31 October 2014 or 31 October 2013, but is derived from
those financial statements. Statutory accounts for the year ended
31 October 2013 have been delivered to the Registrar of Companies
and those for the year ended 31 October 2014 will be delivered
following the Company's annual general meeting. The auditor has
reported on those financial statements: their reports were
unqualified, did not draw attention to any matters by way of
emphasis and did not contain statements under s498 (2) or (3) of
the Companies Act 2006.
While the financial information included in this preliminary
announcement has been prepared in accordance with the recognition
and measurement criteria of International Financial Reporting
Standards (IFRSs), this announcement does not itself contain
sufficient information to comply with IFRSs.
The financial statements have been prepared on the historical
cost basis, except for the revaluation of certain properties,
financial instruments and defined benefit scheme related employee
benefits. The principal accounting policies adopted are set out
below. The financial statements have been prepared on a going
concern basis. The responsibility statement below has been prepared
in connection with the Company's full annual report for the year
ended 31 October 2014. Certain parts thereof are not included
within this announcement. We confirm to the best of our
knowledge:
- The financial statements, prepared in accordance with IFRSs as
adopted by the European Union, give a true and fair view of the
assets, liabilities, financial position and profit and loss of the
Company and the undertakings included in the consolidation taken as
a whole; and
- The strategic report includes a fair review of the development
and performance of the business and the position of the Company and
the undertakings included in the consolidation as a whole, together
with a description of the principal risks and uncertainties they
face.
The responsibility statement was approved by the board of
directors on 12 February 2015 and is signed on its behalf by:
Roger Allard - Executive Chairman
Nigel Arthur - Group Finance Director
2. Significant accounting policies
Basis of accounting
The financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRSs) adopted by the
European Union.
The financial statements have been prepared on the historical
cost basis, except for the revaluation of certain properties and
financial instruments. The principal accounting policies adopted
are set out below.
The financial statements have been prepared on a going concern
basis.
The principal accounting policies adopted are set out below.
These policies have been applied consistently unless otherwise
stated.
2. Significant accounting policies (continued)
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the Company
(its subsidiaries) made up to 31 October each year. Control is
achieved when the Company:
- Has power over the investee;
- Is exposed, or has rights, to variable return from its involvement with the investee; and
- Has the ability to use its power to affect its returns.
The Company reassesses whether or not it controls an investee if
facts and circumstances indicate that there are changes to one or
more of the three elements of control listed above.
All subsidiaries are 100% owned and there are no non-controlling
interests in the Group.
Consolidation of a subsidiary begins when the Company obtains
control over the subsidiary and ceases when the Company loses
control of the subsidiary. Specifically, the results of
subsidiaries acquired or disposed of during the year are included
in the consolidated income statements from the date the Company
gains control until the date when the Company ceases to control the
subsidiary.
Where necessary, adjustments are made to the financial
statements of subsidiaries to bring the accounting policies used
into line with the IFRS policies used by the Group.
All intra-group transactions, balances, income and expenses are
eliminated on consolidation.
Going concern
The directors have, at the time of approving the financial
statements, a reasonable expectation that the Company and the Group
have adequate resources to continue in operational existence for
the foreseeable future. Thus they continue to adopt the going
concern basis of accounting in preparing the financial
statements.
Business combinations
Acquisitions of subsidiaries and businesses are accounted for
using the acquisition method. The consideration for each
acquisition is measured at the aggregate of the fair values (at the
date of exchange) of assets given, liabilities incurred or assumed,
and equity instruments issued by the Group in exchange for control
of the acquire. Acquisition-related costs are recognised in profit
or loss as incurred.
The acquiree's identifiable assets, liabilities and contingent
liabilities that meet the conditions for recognition under IFRS 3
are recognised at their fair value at the acquisition date, except
that deferred tax assets and liabilities or assets related to
employee benefit arrangements are recognised and measured in
accordance with IAS 12 Income Taxes and IAS 19 Employee benefits
respectively.
Intangible Assets - Goodwill
Goodwill arising in a business combination is recognised as an
asset at the date that control is acquired (the acquisition date).
Goodwill is measured as the excess of the sum of the consideration
transferred and the fair value of the acquirer's previously held
equity over the net of the acquisition-date amounts of the
identifiable assets acquired and the liabilities assumed.
If, after reassessment, the Group's interest in the net fair
value of the acquiree's net assets exceeds the sum of the
consideration transferred, the excess is recognised immediately in
profit or loss as a bargain purchase gain.
Goodwill is not amortised but is reviewed for impairment at
least annually. For the purpose of impairment testing, goodwill is
allocated to each of the Group's cash-generating units expected to
benefit from the synergies of the combination. Cash-generating
units to which goodwill has been allocated are tested for
impairment annually, or more frequently when there is an indication
that the unit may be impaired. If the recoverable amount of the
cash-generating unit is less than the carrying amount of the unit,
the impairment loss is allocated first to reduce the carrying
amount of any goodwill allocated to the unit and then to the other
assets of the unit pro-rata on the basis of the carrying amount of
each asset in the unit. An impairment loss recognised for goodwill
is not reversed in a subsequent period.
On disposal of a subsidiary, the attributable amount of goodwill
is included in the determination of the profit or loss on
disposal.
2. Significant accounting policies (continued)
Intangible assets - Other
Intangible assets other than goodwill with a finite useful life
are carried at cost less amortisation and any impairment losses.
Intangible assets with indefinite useful lives are not amortised.
For all other intangibles, amortisation is charged on a
straight-line basis over the asset's useful life, as follows:
Customer relationships 5% - 10%
Trademarks 4%
Computer software 25%
Revenue recognition
Revenue comprises sales to third parties (excluding VAT and
similar sales, port and other taxes).
Cruise revenues and cruise charter revenues, together with
revenues from onboard and other activities, which include
transportation are recognised in income for each day of the cruise
as it progresses. Shore excursion revenue is recognised on the date
of the excursion.
Tour operating revenues, including excursions, insurance revenue
and other services supplied to customers in the ordinary course of
business, are taken to the income statement on holiday
departure.
Client monies received at the balance sheet date relating to
holidays commencing after the year end are deferred and included
within trade and other payables.
Interest income is recognised when it is probable that the
economic benefits will flow to the Group and the amount of income
can be measured reliably. Interest income is accrued on a timely
basis, by reference to the principal outstanding and at the
effective interest rate applicable, which is the rate that exactly
discounts estimated future cash receipts through the expected life
of the financial asset to that asset's net carrying amount.
Other revenue and associated expenses are taken to the income
statement as earned or incurred.
Revenue and expenses exclude intra-group transactions.
Foreign exchange
The individual financial statements of each Group company are
presented in the currency of the primary economic environment in
which it operates (its functional currency). For the purpose of the
consolidated financial statements, the results and financial
position of each Group company are expressed in pounds sterling,
which is the functional currency of the Group, and the presentation
currency for the consolidated financial statements.
In preparing the financial statements of the individual
companies, transactions in currencies other than the entity's
functional currency (foreign currencies) are recorded at the rates
of exchange prevailing on the dates of the transactions. At each
balance sheet date, monetary assets and liabilities that are
denominated in foreign currencies are retranslated at the rates
prevailing at the balance sheet date. Non-monetary items carried at
fair value that are denominated in foreign currencies are
translated at the rates prevailing at the date when the fair value
was determined. Non-monetary items that are measured in terms of
historical cost in a foreign currency are not retranslated.
For the purpose of presenting consolidated financial statements,
the assets and liabilities of the Group's foreign subsidiaries are
translated at exchange rates prevailing on the balance sheet date.
Income and expense items are translated at the average exchange
rates for the period, unless exchange rates fluctuate significantly
during that period, in which case the exchange rates at the date of
transactions are used. Exchange differences arising, if any, are
classified as equity and recognised in the Group's foreign currency
translation reserve. Such translation differences are recognised as
income or as expenses in the period in which the operation is
disposed of.
2. Significant accounting policies (continued)
Borrowing costs
Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, which are assets
that necessarily take a substantial period of time to get ready for
their intended use or sale, are added to the cost of those assets,
until such time as the assets are substantially ready for their
intended use or sale.
All other borrowing costs are recognised in profit or loss in
the period in which they are incurred.
Property, ships, plant and equipment
Land and buildings held for administrative purposes are stated
in the balance sheet at their revalued amounts, being the fair
value at the date of revaluation, less any subsequent accumulated
depreciation and subsequent accumulated impairment losses.
Revaluations are performed with sufficient regularity such that the
carrying amount does not differ materially from that which would be
determined using fair values at the balance sheet date. The
freehold property owned by Page & Moy Travel Group Air Holidays
Ltd was revalued in October 2014.
Any revaluation increase arising on the revaluation of such land
and buildings is credited to the properties' revaluation reserve,
except to the extent that it reverses a revaluation decrease for
the same asset previously recognised as an expense, in which case
the increase is credited to the income statement to the extent of
the decrease previously charged. A decrease in carrying amount
arising on the revaluation of such land and buildings is charged as
an expense to the extent that it exceeds the balance, if any, held
in the properties' revaluation reserve relating to a previous
revaluation of that asset.
Depreciation on revalued buildings is charged to income. On the
subsequent sale of a revalued property, the attributable
revaluation surplus remaining in the properties' revaluation
reserve is transferred directly to retained earnings.
Freehold land is not depreciated.
Property, ships, plant and equipment are stated at cost or
valuation less accumulated depreciation and any impairment in
value.
Depreciation is provided on all property, dry docks, ship
improvements and plant and equipment, other than freehold land, at
rates calculated to write off the cost or revalued amount, less
estimated residual value of each asset evenly over its expected
useful life, as follows:
Freehold buildings 2% per annum straight line
Cruise ships 5% - 100% per annum straight line
Leasehold improvements Over lease period
Office equipment 25% per annum straight line
Computer equipment 33% per annum straight line
Motor vehicles 25% per annum straight line
The carrying values of property, ships, plant and equipment are
reviewed for impairment if events or changes in circumstances
indicate the carrying value may not be recoverable.
The assets' residual values, useful lives and depreciation
methods are reviewed, and adjusted if appropriate, at each
financial year end. Further details regarding the residual values
of the cruise ships are provided in note 3.
Costs relating to mandatory cruise ship dry docks are
capitalised and depreciated over the period up to the next dry dock
where appropriate.
An item of property, ships and equipment is derecognised upon
disposal or when no future economic benefits are expected to arise
from the continued use of the asset. Any gain or loss arising on
the disposal or retirement of an item of property, ships and
equipment is determined as the difference between sales proceeds
and the carrying amount of the asset and is recognised in profit or
loss.
2. Significant accounting policies (continued)
Non-current assets held for sale
The Group classifies non-current assets held for sale if their
carrying amount will be recovered through a sale transaction rather
than through continuing use. To be classified as held for sale, the
asset must be available for immediate sale in its present condition
subject only to terms that are usual and customary for the sale of
such assets, and their sale must be highly probable. Management
must be committed to the sale which should be expected to qualify
for recognition as a completed sale within one year from the date
of classification.
Non-current assets classified as held for sale are carried on
the Group's balance sheet at the lower of their carrying amount and
fair value less costs to sell.
Impairment of tangible and intangible assets
At the end of each reporting period, the Group reviews the
carrying amounts of its tangible and intangible assets to determine
whether there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent
of the impairment loss (if any). Where the asset does not generate
cash flows that are independent from other assets, the Group
estimates the recoverable amount of the cash-generating unit to
which the asset belongs.
Recoverable amount is the higher of fair value less costs to
sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset for
which the estimates of future cash flows have not been
adjusted.
If the recoverable amount of an asset (or cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (or cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised in the income
statement as an expense immediately, unless the relevant asset is
carried at a revalued amount, in which case the impairment loss is
treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying
amount of the asset (or cash-generating unit) is increased to the
revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognised
for the asset (or cash-generating unit) in prior years. A reversal
of an impairment loss is recognised as income immediately, unless
the relevant asset is carried at a revalued amount, in which case
the reversal of the impairment loss is treated as a revaluation
increase.
Financial instruments
Financial assets and financial liabilities are recognised on the
Group's balance sheet at fair value when the Group becomes a party
to the contractual provisions of the instrument.
2. Significant accounting policies (continued)
Financial instruments (continued)
Financial assets
All financial assets are recognised and derecognised on a trade
date where the purchase or sale of a financial asset is under a
contract whose terms require delivery of the financial asset within
the timeframe established by the market concerned, and are
initially measured at fair value, plus transaction costs, except
for those financial assets classified as at fair value through
profit or loss, which are initially measured at fair value.
Financial assets are classified into the following specified
categories: financial assets 'at fair value through profit or loss'
(FVTPL), 'held-to-maturity' investments, 'available-for-sale' (AFS)
financial assets and 'loans and receivables'. The classification
depends on the nature and purpose of the financial assets and is
determined at the time of initial recognition. Currently the Group
does not have any financial assets that are classified as 'held to
maturity' or 'available-for-sale'.
Loans and receivables
Trade receivables, loans, and other receivables that have fixed
or determinable payments that are not quoted in an active market
are classified as 'loans and receivables'. Loans and other
receivables are measured at amortised cost using the effective
interest method, if the time value of money is significant, less
any provision for impairment. Gains and losses are recognised in
income when the loans and receivables are derecognised or impaired.
This category of financial asset includes trade receivables.
Financial assets at FVTPL
Financial assets are classified as at FVTPL when the financial
asset is either held for trading or is designated as at FVTPL. A
financial asset is classified as held for trading if:
- It has been acquired principally for the purpose of selling in the near term; or
- On initial recognition it is part of a portfolio of identified
financial instruments that the Group manages together and has a
recent actual pattern of short-term profit-taking; or
- It is a derivative that is not designated and effective as a hedging instrument.
Financial assets at FVTPL are stated at fair value, with any
gains or losses arising on re-measurement recognised in profit or
loss., Financial assets at FVTPL can include the Group's fuel and
foreign currency derivatives..
Bank balances and cash in hand
Restricted cash comprises cash deposits which have restrictions
governing their use and are classified as current or non-current
dependent on the remaining length of the restriction, which is
determined from contractual terms governing the restriction. Cash
and cash equivalents comprise cash in hand, cash held in bank
accounts with no access restrictions and bank or money market
deposits repayable on demand or maturing within three months of
inception. If the bank or money market deposits have an original
maturity of three months or more these are disclosed as 'interest
bearing bank deposits' outside cash and cash equivalents. This
reflects the contractual terms of the deposit agreements such that
whilst the Group often has immediate access to the bank deposits,
the counterparty has the right to restrict interest payments in the
event of early withdrawal. Interest income on these balances is
recognised using the effective interest method.
Impairment of financial assets
Financial assets, other than those at FVTPL, are assessed for
indicators of impairment at each balance sheet date. Financial
assets are impaired where there is objective evidence that, as a
result of one or more events that occurred after the initial
recognition of the financial asset, the estimated future cash flows
of the investment have been reduced.
For certain categories of financial asset, such as trade
receivables, assets that are assessed not to be impaired
individually are subsequently assessed for impairment on a
collective basis.
If, in a subsequent period, the amount of the impairment loss
decreases and the decrease can be related objectively to an event
occurring after the impairment was recognised, an appropriate
portion of the loss previously recognised is reversed.
2. Significant accounting policies (continued)
Financial instruments (continued)
De-recognition of financial assets
The Group derecognises a financial asset only when the
contractual rights to the cash flows from the asset expire; or it
transfers the financial asset and substantially all the risks and
rewards of ownership of the asset to another entity. If the Group
neither transfers nor retains substantially all the risks and
rewards of ownership and continues to control the transferred
asset, the Group recognises its retained interest in the asset and
an associated liability for amounts it may have to pay. If the
Group retains substantially all the risks and rewards of ownership
of a transferred financial asset, the Group continues to recognise
the financial asset and also recognises a collateralised borrowing
for the proceeds received.
Financial liabilities
Financial liabilities are classified as either financial
liabilities 'at FVTPL' or 'other financial liabilities' measured at
amortised cost.
Financial liabilities at amortised cost
Other financial liabilities, including borrowings, are initially
measured at fair value, net of transaction costs. Other financial
liabilities are subsequently measured at amortised cost using the
effective interest method, with interest expense recognised on an
effective yield basis. The effective interest method is a method of
calculating the amortised cost of a financial liability and of
allocating interest expense over the relevant period. The effective
interest rate is the rate that exactly discounts estimated future
cash payments through the expected life of the financial liability,
or, where appropriate, a shorter period. This category of financial
liabilities includes trade payables, accruals, deferred income and
borrowings.
Financial liabilities at FVTPL
Financial liabilities are classified as at FVTPL where the
financial liability is either held for trading or it is designated
as at FVTPL.
The financial liabilities that can be classified as FVTPL are
the derivative instruments that are not designated and effective as
hedging instruments (see the derivative accounting policy
below).
Financial liabilities at FVTPL are stated at fair value, with
any gains or losses arising on re-measurement recognised in profit
or loss. The net gain or loss recognised in profit or loss
incorporates any interest paid on the financial liability.
De-recognition of financial liabilities
The Group derecognises financial liabilities when, and only
when, the Group's obligations are discharged, cancelled or they
expire.
Derivative financial instruments
The Group has chosen to measure all its fuel and currency
derivatives at fair value through profit and loss (FVTPL), with the
movement being disclosed on the face of the income statement.
A derivative is presented as a non-current asset or a
non-current liability if the remaining maturity of the instrument
is more than 12 months and it is not expected to be realised or
settled within 12 months. Other derivatives are presented as
current assets or current liabilities.
2. Significant accounting policies (continued)
Equity instruments
An equity instrument is any contract that evidences a residual
interest in the assets of the Group after deducting all of its
liabilities. Equity instruments issued by the Group are recorded at
the proceeds received, net of direct issue costs.
Share capital and share premium account
There is one class of shares. When new shares are issued, they
are recorded in share capital at their par value. The excess of the
issue price over the par value is recorded in the share premium
account. Incremental external costs directly attributable to the
issue of new shares are recorded in equity as a deduction, net of
tax, in the share premium account.
Dividends
Dividends are provided for in the period in which they become a
binding liability on the Company.
Provisions
A provision is recognised in the balance sheet when the Group
has a present obligation (legal or constructive) as a result of a
past event, it is probable that an outflow of economic benefits
will be required to settle the obligation and a reliable estimate
can be made of the amount of the obligation. Provisions are
measured at the Directors' best estimate of the expenditure
required to settle the obligation at the balance sheet date, and
are discounted to present value where the effect is material.
When some or all of the economic benefits required to settle a
provision are expected to be recovered from a third party, a
receivable is recognised as an asset if it is virtually certain
that reimbursement will be received and the amount of the
receivable can be measured reliably.
Inventories
Inventories representing engineering spares, fuels, lubricants
and consumables are stated at the lower of cost (being purchase
price to the Group) and net realisable value.
Where necessary, provision is made for obsolete and damaged
stocks.
Leases
Leases taken by the Group are assessed individually as to
whether they are finance leases or operating leases.
Leases where the lessor retains substantially all the risks and
benefits of ownership of the asset are classified as operating
leases. Operating lease rental payments are recognised as an
expense in the income statement on a straight-line basis over the
lease term. The benefit of any lease incentives is spread over the
term of the lease.
All Group leases (which include Bareboat Charter agreements) are
classified as operating leases.
Taxation
The tax expense represents the sum of current tax expense and
deferred tax expense.
Current tax payable is based on taxable profit for the year.
Taxable profit differs from net profit as reported in the income
statement because it excludes some of the items of income or
expense that are taxable or deductible in other years and it
further excludes items that are never taxable or deductible. The
Group's liability for current tax is calculated using tax rates
that have been enacted or substantively enacted by the balance
sheet date. Certain of the Group subsidiary companies are subject
to taxation under the UK Tonnage Tax regime. Under this regime, a
shipping company may elect to have its taxable profits computed by
reference to the net tonnage of each of the qualifying ships it
operates.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable profit, and is accounted for using the
balance sheet liability method. Deferred tax liabilities are
generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which
deductible temporary differences can be utilised. Such assets and
liabilities are not recognised if the temporary difference arises
from the initial
2. Significant accounting policies (continued)
Taxation (continued)
recognition of goodwill or from the initial recognition (other
than in a business combination) of other assets and liabilities in
a transaction that affects neither the taxable profit nor the
accounting profit.
The carrying amount of deferred tax assets is reviewed at each
balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the asset to be recovered.
Deferred tax liabilities are recognised for taxable temporary
differences arising on investment in subsidiaries, except where the
Group is able to control the reversal of the temporary difference
and it is probable that the temporary difference will not reverse
in the foreseeable future.
Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled or the asset is
realised based on tax laws and rates that have been enacted or
substantively enacted at the balance sheet date. Deferred tax is
charged or credited in the income statement, except it relates to
items charged or credited in other comprehensive income, in which
case the deferred tax is also dealt with in other comprehensive
income.
Deferred tax assets and liabilities are offset when there is a
legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes levied
by the same taxation authority and the Group intends to settle its
current tax assets and liabilities on a net basis.
Share-based payment
Equity-settled share-based payments to employees are measured at
the fair value of the equity instruments at the grant date.
The fair value determined at the grant date of the
equity-settled share-based payments is expensed on a straight-line
basis over the vesting period, based on the Group's estimate of
equity instruments that will eventually vest. At each balance sheet
date, the Group revises its estimate of the number of equity
instruments expected to vest as a result of the effect of
non-market-based vesting conditions. The impact of the revision of
the original estimates, if any, is recognised in profit or loss
such that the cumulative expense reflects the revised estimate,
with a corresponding adjustment to equity reserves.
Retirement benefit costs
The Group operates defined contribution pension schemes. The
assets of the schemes are held separately from those of the Group
in independently administered funds. The amount charged to the
income statement in respect of pension costs and other
post-retirement benefits is the contributions payable in the
year.
Differences between contributions payable in the year and
contributions actually paid are shown as either accruals or
prepayments in the balance sheet.
The Group also operates a defined benefit scheme. The pension
liabilities recognised on the balance sheet in respect of this
scheme represent the difference between the present value of the
Group's obligations under the scheme (calculated using the
projected unit credit method) and the fair value of the scheme's
assets. Actuarial gains or losses are recognised in the period in
which they arise within the consolidated statement of changes in
equity. The current service cost, representing benefits accruing
over the year, is included in the consolidated income statement as
an administrative expense. The unwinding of the discount rate on
the scheme liabilities and the expected return on scheme assets are
presented as investment revenues. Past service costs are recognised
immediately in the income statement as administrative expenses.
Operating profit
Operating profit is stated before investment revenues and
finance costs.
2. Significant accounting policies (continued)
Income statement presentation and separately disclosed items
Certain items are disclosed separately to enable a better
understanding of the Group's results.. These include;
-- Asset impairment charges
-- Profit/Loss on disposal of significant assets (e.g. vessels)
-- Amortisation of business combination intangibles
-- Other items that because of their size, nature or incidence merit separate disclosure.
3. Critical accounting judgements and key sources of estimation uncertainty
In the application of the Group's accounting policies, which are
described in note 2, the Directors are required to make judgements,
estimates and assumptions about the carrying amounts of assets and
liabilities that are not readily apparent from other sources. The
estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant.
Actual results may differ from these estimates. The estimates and
underlying assumptions are reviewed on an ongoing basis. Revisions
to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period or in
the period of the revision and future periods if the revision
affects both current and future periods.
Residual value of cruise ships
The residual value of the Group's cruise ships is measured at
scrap value, which is based on an estimate provided by independent
specialists. Ship residual values are determined in US Dollars or
Euros and are therefore subject to foreign exchange risk. Residual
values are reviewed annually to take account of market
conditions.
Valuation of derivative financial instruments
The Group has derivative assets and liabilities on its balance
sheet as at 31 October 2013 and 31 October 2014, which are carried
at fair value as required by IAS 39, Financial instruments:
Recognition and Measurement. The calculation of fair value involves
judgements and is performed by independent experts.
Retirement benefits
The consolidated financial statements include costs in relation
to, and provision for, retirement benefit obligations. The costs
and the present value of any related pension assets and liabilities
depend on such factors as life expectancy of the members, the
salary progression of current employees, the returns that plan
assets generate and the discount rate used to calculate the present
value of the liabilities. The Group uses previous experience and
independent actuarial advice to select the values of critical
estimates.
Revaluation of land and buildings
The Group's land and buildings are carried at a revalued amount.
Valuations are undertaken by an independent firm of Chartered
Surveyors.
3. Critical accounting judgements and key sources of estimates uncertainty (continued)
Impairment of assets
The Group has completed a detailed impairment review of certain
assets as detailed below. Based on these reviews, the Group is
satisfied that the assets are not impaired at the balance sheet
date.
Swan Hellenic intangible assets
GBP'000
Carrying value at 31 October 2014 1,875
In determining the recoverable amount of the Swan Hellenic cash
generating unit (CGU), the Group has used the following principal
inputs:
Measure
Discount rate - pre tax 13.5%
Cash flow forecast period 5 years + terminal
value
Rate of increase of revenue rate per night beyond 3% (0% after
the budget period 5 years)
Rate of increase of costs beyond the budget period 3% (0% after
5 years)
Goodwill
GBP'000
Carrying value at 31 October 2014 9,517
Determining whether goodwill is impaired requires an estimation
of the value in use of the CGU to which goodwill has been
allocated.
In determining the recoverable amount, the Group has used the
following principal inputs:
Measure
Discount rate - pre tax 13.5%
Cash flow forecast period 2 years + terminal
value
Growth rate 0%
Ship values
GBP'000
Carrying value at 31 October 2014 21,518
During the year the Group has undertaken an impairment review of
mv Voyager, and has used the following principle inputs in
determining the recoverable amount:
Measure
Discount rate - pre tax 13.5%
Cash flow forecast period 16 years
Rate of increase of annual profit beyond the budget
period 3%
Rate of increase of central overhead costs beyond
the budget period 2%
3. Critical accounting judgements and key sources of estimates uncertainty (continued)
Impairment of assets (continued)
In the prior year the Group undertook a detailed impairment
review of mv Discovery following an independent valuation which
indicated that the current market value of the ship was
significantly lower than its carrying value.
Based on this review, the Group estimated that the fair value of
the asset was GBP6,700,000 less than its carrying value, and this
amount was therefore recognised as a charge to the income statement
in 2013.
4. Revenue
An analysis of the Group's revenue is as follows:
2014 2013
GBP'000 GBP'000
Continuing operations
Sales of cruise holidays and ancillary services 67,567 65,824
Sales of escorted tours and ancillary services 71,345 76,319
138,912 142,143
Investment revenue 70 160
138,982 142,303
Ancillary services revenue included within sales of cruise
holidays and ancillary services includes all revenue derived
directly from the cruise holidays sold, other than the principal
cruise. Ancillary services revenue includes excursions revenue, on
board revenue such as bar, laundry and other, and insurance income.
None of these revenue streams account for more than 10% of the
overall revenue and are considered by the Directors to be a
component of the overall revenues derived on cruises.
Ancillary service revenue included within sales of escorted
tours and ancillary services includes non inclusive tours, visa
services and flight upgrades. None of these revenue streams account
for more than 10% of the overall revenue and are considered by the
Directors to be components of the overall revenues derived on
escorted tours.
5. Business and geographical segments
The Group has identified two reporting segments: Cruising
(including the Voyages of Discovery, Swan Hellenic and Hebridean
Island Cruises brands) and Tour Operating (including the
Travelsphere, Just You and Discover Egypt brands).
Reporting segment revenues and results
The following is an analysis of the Group's revenue and results
by reportable segments in 2014.
Central salary costs and gains on derivative financial
instruments have not been allocated to either of the Group's two
reporting segments and are shown separately as Corporate items.
Cruising Tour Operating Corporate Consolidated
2014 2014 2014 2014
GBP'000 GBP'000 GBP'000 GBP'000
Revenue
External sales 67,567 71,345 - 138,912
Result
Underlying (loss)/profit from operations (1,627) 3,510 (987) 896
Separately disclosed items (7,224) (486) - (7,710)
Amortisation of business combination
intangibles - (497) - (497)
Operating (loss)/profit before
adjustment for derivative financial
instruments (8,851) 2,527 (987) (7,311)
Gains on derivative financial instruments - - 445 445
Operating loss (8,851) 2,527 (542) (6,866)
Investment revenues 70
Finance costs (429)
Loss before tax (7,225)
Tax charge (258)
Loss for the financial year (7,483)
5. Business and geographical segments (continued)
The following is an analysis of the Group's revenue and results
by reportable segments in 2013:
Cruising Tour Operating Corporate Consolidated
2013 2013 2013 2013
GBP'000 GBP'000 GBP'000 GBP'000
Revenue
External sales 65,824 76,319 - 142,143
======= ======= ======== ========
Result
Underlying (loss)/profit from operations (1,944) 4,117 (1,420) 753
Separately disclosed items (8,556) (500) (332) (9,388)
Amortisation of business combination
intangibles - (497) - (497)
________ ________ ________ _________
Operating (loss)/profit before
adjustment for derivative financial
instruments (10,500) 3,120 (1,752) (9,132)
Losses on derivative financial
instruments - - (4,277) (4,277)
________ ________ _________ _________
Operating loss (10,500) 3,120 (6,029) (13,409)
Investment revenues 160
Finance costs (387)
Loss before tax (13,636)
Tax credit 226
Loss for the financial year (13,410)
Segment assets
2014 2013
GBP'000 GBP'000
Cruising 36,788 52,547
Tour operating 38,904 36,024
________ ________
Total segment assets 75,692 88,571
Unallocated assets 4,543 4,331
________ _________
Consolidated total assets 80,235 92,902
======== ========
The unallocated corporate assets primarily relate to Group
properties.
5. Business and geographical segments (continued)
Other segment information
Depreciation and Additions to
amortisation non-current assets
2014 2013 2014 2013
GBP'000 GBP'000 GBP'000 GBP'000
Cruising 4,140 5,624 1,638 7,865
Tour operating 684 775 114 428
Unallocated 292 432 676 55
5,116 6,831 2,428 8,348
Geographical segments
The following table provides an analysis of the Group's sales by
geographical market, irrespective of the origin of the
goods/services and the location of the Group's non-current
assets:
Sales revenue Non-current assets
by
geographical market
2014 2013 2014 2013
GBP'000 GBP'000 GBP'000 GBP'000
UK 124,648 129,358 54,453 66,470
USA 4,790 5,428 - -
Rest of the world 9,474 7,357 - -
138,912 142,143 54,453 66,470
Revenues are attributed to individual countries on the basis of
region of booking.
6. Separately disclosed items
2014 2013
GBP'000 GBP'000
Operating items - income/(expense)
Onerous lease provision 104 (139)
Restructuring costs (719) (1,655)
Impairment of ship - (6,700)
Loss on disposal of ship (7,095) -
Cruise cancellation costs - (563)
Software costs write off - (263)
Loss on disposal of property - (68)
Amortisation of business combination intangibles (497) (497)
_________ _________
Total operating items (8,207) (9,885)
Deferred tax on business combination intangibles 172 311
_________ __________
Total separately disclosed items (8,035) (9,574)
======== =========
In October 2014 the Group disposed of mv Discovery incurring a
loss on disposal of GBP7,095k.
Restructuring costs of GBP719k (2013: GBP1,655k) have arisen
during the year as a result of the ongoing integration of the
cruise and tour operating businesses.
During the prior year the Group announced the closure of its
offices in Southampton. An onerous lease provision of GBP139k was
recognised in respect of the ongoing lease commitment for the
Southampton premises. During the current year the Group entered
into a contract to sub-lease this office and therefore the
remaining balance on the onerous lease provision of GBP104k has
been released back to the income statement.
Certain business combination intangible assets were recognised
on acquisition of Page & Moy Travel Group Limited. The
amortisation of these intangible assets is separately disclosed to
enable a full understanding of the Group's results.
Items relating to prior year only
The Group undertook an impairment review in respect of mv
Discovery (see note 3 for further details). This revealed a decline
in the market value of the ship and an impairment charge of
GBP6,700k was therefore recognised.
Costs of GBP563k were incurred due to the cancellation of
certain cruises following major mechanical problems on-board mv
Voyager.
Costs of GBP263k were written off in relation to expenditure on
software prior to the integration of the businesses.
The Group disposed of Lynnem House, Burgess Hill and incurred a
loss on disposal of GBP68k.
7. Operating loss
2014 2013
GBP'000 GBP'000
Operating loss has been arrived at after charging/(crediting):
Foreign exchange loss/(gain) 3,777 (1,802)
Depreciation of property, ships, plant and equipment 3,863 5,487
Amortisation of intangibles assets 1,253 1,344
Cost of inventories recognised as expense 13,184 13,777
Loss on disposal of ships 7,095 -
Loss on disposal of property - 68
Staff costs 10,501 12,126
Provision arising from a contractual arrangement
(note 6) (104) 139
Impairment of ship (note 6) - 6,700
Other separately disclosed items (note 6) 719 2,481
8. Tax charge/(credit)
a) Tax charge/(credit) on loss
2014 2013
GBP'000 GBP'000
Current tax
- Current year 17 7
- Adjustment with respect to prior
years - (5)
17 2
Deferred tax 241 (228)
Total tax charge/(credit) 258 (226)
Corporation tax is calculated at 21.8% (2013 - 23.4%) of the
estimated taxable profit for the year.
8. Tax charge/(credit) (continued)
(b) Factors affecting the tax (credit)/charge for the year
The tax assessed for the year differs from (2013- differs from)
that resulting from applying the standard rate of corporation tax
in the UK of 21.8% (2013 - 23.4%). The differences are explained
below:
2014 2013
GBP'000 GBP'000
Loss before tax:
Continuing operations (7,225) (13,636)
Tax at the UK corporation tax rate of 21.8% (2013:
23.4%) (1,575) (3,191)
Adjustments from income taxed under the tonnage
tax regime 2,279 2,564
Expenses not allowable for tax purposes 18 1,195
Income not taxable (171) -
Brought forward losses utilised in year (369) (580)
Unutilised losses carried forward 8 137
Capital allowances in excess of depreciation (181) (162)
Other timing differences 8 44
Adjustment in respect of prior years - (5)
Deferred tax movement 241 (228)
Total tax charge/(credit) 258 (226)
For accounting periods beginning on or after 1 January 2000 a
shipping company or group may elect to have its taxable profits
computed by reference to the net tonnage of each qualifying ship it
operates subject to meeting various conditions. Accordingly, the
profits or losses arising from the cruising segment are not subject
to taxation under the normal corporation tax regime.
In addition to the amount charged to the income statement, the
following amounts relating to tax have been recognised in other
comprehensive income:
2014 2013
GBP'000 GBP'000
Deferred tax:
Items that will not be reclassified subsequently
to profit or loss:
Re-measurement of net defined benefit liability 98 (365)
________ ________
98 (365)
8. Tax charge/(credit) (continued)
(c) Factors affecting future tax charge
At the balance sheet date, the Finance Act 2013 had been
substantively enacted confirming that the main UK corporation tax
rate will be 20% from 1 April 2015. Therefore, at 31 October 2014,
deferred tax assets and liabilities have been calculated based on a
rate of 20%.
9. Dividends
No dividends were paid in the year. It was announced on 27 July
2012 that the Group is proposing not to pay dividends for the
foreseeable future.
10. Earnings per share
2014 2013
Basic and diluted loss per share Pence Pence
Basic (12.1) (21.7)
Diluted (12.1) (21.7)
The calculation of the basic and diluted earnings per share is
based on the following data:
Earnings GBP'000 GBP'000
Earnings for the purposes of basic and diluted
earnings per share being net loss attributable
to equity holders of the parent (7,483) (13,410)
Number of shares No. No.
Weighted average number of ordinary shares for
the purposes of basic and diluted earnings per
share 61,744,777 61,744,777
All results derive from continuing operations and accordingly
total earnings per share and earnings per share from continuing
operations are the same.
2014 2013
Underlying* basic and diluted profit/(loss) per
share Pence Pence
Basic 0.9 (6.2)
Diluted 0.9 (6.2)
* The underlying profit/loss is calculated as profit/loss before
separately disclosed items (please see note 6 for further
details).
11. Notes to the cash flow statement
2014 2013
GBP'000 GBP'000
Loss for the financial year (7,483) (13,410)
Adjustments for:
Investment revenues (70) (160)
Rental income (6) (8)
Finance costs 429 387
Other gains and losses 6,132 232
Income tax charge/(credit) 258 (226)
Depreciation and amortisation 5,116 6,831
Impairment losses - 6,700
Foreign exchange movements 3,777 (1,802)
Movement in fair value of derivatives (445) 4,277
(Decrease)/increase in provisions (293) 206
Adjustment for pension funding (440) (440)
_________ _________
Operating cash flows before movements in working
capital 6,975 2,587
Decrease/(increase) in inventories 910 (683)
Decrease in receivables 324 1,422
Decrease in payables (3,762) (6,630)
________ _________
Cash inflow/(outflow) generated from operations 4,447 (3,304)
Income taxes paid (5) (8)
Interest paid (365) -
_________ _________
Net cash inflow/(outflow) from operating activities 4,077 (3,312)
======== ========
12. Related party transactions
Transactions between the Company and its subsidiaries, which are
related parties, have been eliminated on consolidation and are not
disclosed in this note. Transactions between the Group and other
related parties are disclosed below:
Trading transactions
During the year, Group companies entered into the following
transactions with related parties who are not members of the
Group:
Purchase of
services Amounts owed to
Years ended 31 related parties
October At 31 October
2014 2013 2014 2013
GBP GBP GBP GBP
Roger Allard Limited 184,317 179,061 52,865 53,851
PB Consultancy Services
Limited 12,950 38,413 2,508 1,623
Roger Allard Limited is a company owned and controlled by Mr R J
Allard a director of the Company and majority shareholder of the
Group and the payments made are for consultancy services.
PB Consultancy services is owned and controlled by Mr P E
Buckley the Company Secretary of the Group and the payments are for
consultancy, accounting and Company Secretarial services.
In addition to the above transactions, the Group sold a property
to Mr R J Allard for GBP350,000 during the year ended 31 October
2014.
On 15 May 2012, All Leisure Group PLC acquired 100% of the
issued share capital of Page & Moy Travel Group Limited
("PMTGL"), on a debt free basis, for a consideration of GBP3.3m.
The consideration was funded with a GBP5.8m loan from a consortium
of individual investors, some of whom were related parties. The
lenders who meet the definition of related parties, and the amounts
loaned to the Group are as follows:
Loan Amount
Year ended 31 Interest accrued
October At 31 October
2014 2013 2014 2013
GBP GBP GBP GBP
R J Allard and interests 3,620,000 4,010,000 117,328 437,968
N J Jenkins 200,000 225,000 6,482 24,972
D A Wiles and interests 320,000 360,000 10,372 39,668
======= ======= ======= =======
N J Jenkins is a director and shareholder in All Leisure Group
plc. D A Wiles is a director of All Leisure Holidays Limited, a
subsidiary of All Leisure Group plc.
Remuneration of key management personnel
The remuneration of the Directors of the Company and subsidiary
company directors, who are the key management personnel of the
Group, is set out below in aggregate for each of the categories
specified in IAS 24 Related Party Disclosures.
2014 2013
GBP'000 GBP'000
Short-term employee benefits 1,755 2,670
Post employment benefits 73 181
13. Prior year restatement
Costs totalling GBP3,307k have been reclassified from selling
and administrative expenses to operating expenses in the prior year
income statement following a review of the categorisation of all
income and expenditure items.
14. Principal risks and uncertainties
The Directors continually identify, evaluate and manage material
risks faced by the Group which could adversely affect the Group's
business. The list below details the principal risks identified by
the Directors and the action taken to mitigate these risks. This
list is not intended to be exhaustive and other risks may emerge
over time:
Area Description of risk Examples of mitigating activities
Economic
* The Group is competing for a share of disposable * The Group invests in brand awareness and pays
income of its target customers, making revenue significant attention to customer feedback in order
vulnerable to the impact of an economic downturn. to maximise brand loyalty.
* Volatility in markets such as currency and fuel can
undermine budgets. * The Group continues to maintain its currency and fuel
hedging policies as part of its financial planning.
Geopolitics
* The Group is at risk of geo-political events or * The Group plans its itineraries with care and offers
natural disasters affecting our business. a broad geographic spread of destinations within its
products. In the event of a major event, the Group
endeavours to respond quickly to the issue and
minimise its ongoing exposure.
Competition
* The Group operates in a highly competitive market * We undertake market research to ensure that our own
resulting in the threat of our competitors launching products continue to meet the needs of our customers
new products or adding products before we make and we plan new product development with care to
corresponding updates and developments to our own ensure that we have products that remain focused on
range. This could render our products out-of-date an our niche market.
d
could result in rapid loss of market share.
14. Principal risks and uncertainties (continued)
Area Description of risk Examples of mitigating activities
Regulation
* Changes to legislation (principally regarding the * The Group closely monitors regulatory developments
operation of cruise shipping) could result in the across the travel industry through its active
Group's vessels (mv Minerva, mv Hebridean Princess membership of industry bodies and the Directors'
and mv Voyager) becoming uneconomic or inoperable. significant contacts and experience in the travel
mv industry.
Hebridean Princess and mv Voyager are owned by the
Group and this could further impact the carrying
value of these significant assets. * The Group manages cash levels carefully in order to
meet any unexpected operational expenditure that may
arise.
* The Group must satisfy Civil Aviation Authority
("CAA") and Association of British Travel Agents
("ABTA") licensing conditions for airlines and * The Group continually reviews the operating assets to
package holidays. Failure to fulfil CAA and ABTA plan any replacements and the timing of replacement.
licensing conditions could result in substantial
fines and reputational damage and, in the
* The Group adheres to all safety regulations imposed
upon it and liaises closely with its regulators and
very worst case, an inability industry groups to ensure it is abreast of all
to trade due to loss of matters.
licence.
* The Group actively ensures regulations are adhered to
through the tracking of key licensing parameters on a
periodic basis throughout the course of the year and
as part of the annual budget process.
Operational
* The Group's ships carry a risk of operational failure * All ships operated by the Group are maintained
and/or causing environmental damage thus impacting according to the required maritime standards,
revenues and/or costs. including two dry dock inspections per ship in every
five year period for mv Minerva and mv Voyager and
annual dry dock inspections for mv Hebridean
* The Group outsources a significant element of its Princess.
cruise operations (namely hotel services and deck and
engine maintenance) to third parties. Any damage to
these relationships could have a detrimental impact * The Executive Directors meet regularly with the
on our business. Group's key suppliers in order to maintain good
working relationships.
* The tour operating division of the business is
reliant on the delivery of acceptable standards of
service by overseas suppliers. A failure by these * Service level agreements are entered into with
hoteliers, coach companies and other ancillary suppliers and overseas inspection visits are
service providers to maintain expected high standards undertaken. These inspection visits include quality
of quality could result in business disruption, control and health and safety assessments. The Group
reputational damage and loss of profits through also conducts thorough post-departure customer
customer compensation claims. satisfaction reviews, the results of which are
considered on a supplier by supplier basis during the
following year's supplier contracting process.
* The Group is dependent on information technology
systems, the failure of which would impact its
ability to process sales.
* Investment in technology ensures that system
reliability is optimised and procedures are in place
to minimise the time that any selling system is
inoperable.
14. Principal risks and uncertainties (continued)
Financial
* A significant proportion of the Group's cost base is * Key performance indicators are closely monitored to
fixed and therefore a substantial reduction in ensure that yields are optimised.
revenue would impact profitability.
* The Group has significant dollar and euro denominated * The Group holds significant multicurrency cash
operating costs that are matched with significant balances on deposit and uses a variety of currency
sterling denominated revenues. derivatives to manage actively the Group's foreign
exchange exposure.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR BLGDDLXBBGUX
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