RNS Number:9231M
Excel Airways Group PLC
30 June 2003
For Immediate Release 30 June 2003
EXCEL AIRWAYS GROUP PLC ("EAG")
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 APRIL 2003
EAG, the AIM listed UK charter airline servicing independent tour operators,
announces interim results for the six months ended 30 April 2003.
Key Points
* Turnover increased 56% to #39.8 million (2002: #25.5 million), which
includes revenue from Freedom Flights and excelairways.com;
* Loss after tax increased to #6.5 million (2002: #3.8 million) due
mainly to the investment in promoting summer business and the inclusion of
Freedom Flights and excelairways.com administrative costs;
* Performance is ahead of management expectations due to leasing out an
additional aircraft to an overseas airline during the loss making winter months
and by increasing ad-hoc sales;
* Adjusted loss per share increased to 6.81p (2002: 3.93p).
* Excel Airways summer capacity of 11 aircraft reduced to 5 in the
winter, matching winter capacity to market demand;
* Excel Aviation increased sales from ad-hoc events such as European
football competitions and Gulf activity;
* Freedom Flights sold 33% more seats during Winter 2002/03 than
previous corresponding period;
* Initial response to excelairways.com promotion encouraging with up to
250 seats a day sold online;
* Excel Airways was the most punctual charter airline for the fourth
season running at main base, Gatwick Airport.
Commenting on current trading and prospects, Eamonn Mullaney, Chairman said:
"Our tour operator customers are now reporting increased activity following the
end of the Iraq war. Assuming this level of activity continues and they maintain
their current programmes, we expect to deliver a level of profit in line with
market expectations."
For further information, please contact:
Richard Darby/James Strong
Buchanan Communications 020 7466 5000
Chairman's Statement
Introduction
The charter airline business is seasonal, with losses traditionally being made
in the winter months when lower demand for holidays results in lower yields and
utilisation. Excel Airways' performance over the first half of 2003 reflects
this pattern, but the effects of seasonality have been lessened by our strategy
of reducing winter capacity to match market demand by leasing out aircraft to
overseas airlines.
Results
The Group exceeded management's expectations for the Winter 2002/3 period by
leasing out an additional aircraft to an overseas airline and by increasing ad
hoc sales.
The seat only specialist operator Freedom Flights became a Group subsidiary on
12 July 2002. During the winter months an advertising and promotional campaign
was undertaken, which was primarily aimed at driving the sale of summer
capacity, through both Freedom Flights and the excelairways.com direct sales
web-site.
The inclusion of the Freedom Flights and excelairways.com revenue during the
winter, contributed to the growth in turnover from #25.5 million to #39.8
million, which reduced the gross loss as a percentage of turnover from 16% in
the same period last year to 11%.
The after tax winter loss increased by #2.7 million to #6.5 million due mainly
to the investment in promoting summer business and the inclusion of the Freedom
Flights and excelairways.com administrative costs.
Excel Airways
In seeking to match winter capacity to market demand the airlines summer fleet
of 11 aircraft was reduced in the winter to 5.
The fleet for Summer 2003 will increase to 14 aircraft, with Excels' core fleet
of 7 Boeing 737-800 aircraft, augmented by aircraft leased for the summer from
other airlines but flown to Excel standards in Excel livery.
Excel Aviation
Winter broking activity involves the sales and management of summer contracts.
Considerable skill and attention was needed in meeting customers' requirements,
which fluctuated with events in the Gulf.
The Gulf activity and European football competitions brought increased ad hoc
sales during the winter and Excel Aviation have recently concluded a contract to
operate long haul charters to the Caribbean during winter 2003/2004.
Freedom Flights
Freedom Flights provides a seat only product predominantly on Excel Airways'
charter flights, which is sold via the UK travel agency network. Although
market demand for package holidays was widely reported to be dramatically
affected by the uncertainty leading up to the invasion of Iraq, Freedom Flights
sold 33% more seats for the winter period than it did for the same period last
year.
Excelairways.com
Winter saw the start of our campaign to advertise online availability of Excel
Airways seats. Initial response to our promotion has been encouraging with up to
250 seats a day sold online. Further investment will be made in promoting
online access via the web-site.
Customer Service
We believe that punctual departures, as well as making for an efficient
operation, play a major role in building a reputation for good customer service.
This has again led to us surpassing our punctuality targets. For the fourth
season running we were the most punctual charter airline at our main base
Gatwick.
Current Trading Prospects
Our tour operator customers are now reporting increased activity following the
end of the Iraq war. Assuming this level of activity continues and they
maintain their current programmes, we expect to deliver a level of profit in
line with management expectations.
Eamonn Mullaney
Chairman
30 June 2003
Unaudited consolidated profit and loss account for the six months ended 30 April 2003
ADVANCE /Y 97.20
Six Six
months months Year
Note ended ended ended
30 April 30 April 31 October
2003 2002 2002
#'000 #'000 #'000
Turnover 39,795 25,512 182,338
Cost of sales (44,132) (29,486) (161,643)
Gross (loss)/ profit (4,337) (3,974) 20,695
Distribution costs (1,981) - (1,132)
Administrative expenses (3,114) (2,052) (16,398)
Operating (loss)/profit before goodwill
amortisation and exceptional items (9,423) (6,026) 11,704
Exceptional administrative expenses 2 - - (8,511)
Goodwill amortisation (9) - (28)
Group operating (loss)/profit (9,432) (6,026) 3,165
Share of operating loss in associated undertaking - (56) (138)
(Loss)/profit on ordinary activities before interest
and other income (9,432) (6,082) 3,027
Interest receivable and similar income 165 144 447
Interest payable and similar charges (34) (45) (95)
(Loss)/profit on ordinary activities before taxation (9,301) (5,983) 3,379
Taxation credit/(charge) on (loss)/profit on ordinary activities 3 2,759 2,214 (796)
(Loss)/profit on ordinary activities after taxation (6,542) (3,769) 2,583
Dividends 4 - - (6,000)
Retained loss for the financial period (6,542) (3,769) (3,417)
(Loss)/earnings per share - basic 5 (6.81p) (3.93p) 2.69p
- diluted 5 (6.81p) (3.93p) 2.69p
(Loss)/earnings per share before goodwill amortisation and
exceptional items
- basic 5 (6.80p) (3.93p) 9.28p
- diluted 5 (6.80p) (3.93p) 9.28p
All recognised gains and losses are included in the profit and loss account.
Unaudited consolidated balance sheet at 30 April 2003
As at As at As at
30 April 30 April 31 October
2003 2002 2002
#'000 #'000 #'000
Fixed assets
Intangible assets 428 - 437
Tangible assets 3,794 3,331 3,604
Investment in associated undertaking - 251 -
4,222 3,582 4,041
Current assets
Stocks 150 150 150
Debtors - due within one year 14,696 12,694 13,971
- due after more than one year 3,712 3,551 3,918
18,408 16,245 17,889
Cash at bank and in hand 12,352 6,779 20,420
30,910 23,174 38,459
Creditors: amounts falling due
within one year (34,152) (19,991) (35,318)
Net current (liabilities)/assets (3,242) 3,183 3,141
Total assets less current liabilities 980 6,765 7,182
Creditors: amounts falling due
after more than one year (1,207) (1,268) (1,238)
Provisions for liabilities and charges (510) (129) (139)
(1,717) (1,397) (1,377)
Net (liabilities)/assets (737) 5,368 5,805
Capital and reserves
Called up share capital 4,800 4,800 4,800
Merger reserve 1,275 1,275 1,275
Profit and loss account (6,812) (707) (270)
Shareholders' (deficit)/funds - equity (737) 5,368 5,805
Unaudited consolidated cash flow statement for the six months ended 30 April 2003
Note Six months Six months Year
ended ended ended
30 April 30 April 31 October
2003 2002 2002
#'000 #'000 #'000
Net cash (outflow)/inflow from operating activities 6 (7,750) (5,549) 13,578
Returns on investments and servicing of finance 131 99 352
Taxation recovered/(paid) 132 (197) (1,195)
Capital expenditure (430) (2,018) (2,465)
Acquisitions and disposals - (1) 1,613
Equity dividends paid - - (6,000)
Net cash (outflow)/inflow before use of liquid resources
and financing (7,917) (7,666) 5,883
Management of liquid resources 7,984 10,335 (2,004)
Financing (35) 1,310 1,292
Increase in cash in the period 32 3,979 5,171
Reconciliation of net cash flow to movement in net funds
Six months Six months Year
ended ended ended
30 April 30 April 31 October
2003 2002 2002
#'000 #'000 #'000
Increase in cash in the period 32 3,979 5,171
Cash outflow/(inflow) from decrease/(increase) in
net debt and lease financing 35 (1,310) (1,292)
Cash (inflow)/outflow from (decrease)/increase
in liquid resources (7,984) (10,335) 2,004
(Decrease)/increase in net funds resulting from cash flows (7,917) (7,666) 5,883
Movement in net funds in period (7,917) (7,666) 5,883
Net funds at beginning of period 18,955 13,072 13,072
Net funds at end of period 7 11,038 5,406 18,955
Notes forming part of the interim accounts for the six months ended 30 April
2003
1 Reporting on financial information
Excel Airways Group plc was incorporated on 16 August 2002 and, following a
group reorganisation effected on 11 November 2002, it acquired its interests in
Excel Airways Limited and Excel Aviation Limited (including its principal
subsidiary undertakings, Freedom Flights Limited and Freedom Flights (Aviation)
Limited) in consideration for the issue of shares.
The financial information for the year ended 31 October 2002 is an extract from
the group's first consolidated accounts. These group accounts, which did not
constitute statutory annual financial statements, were prepared voluntarily
under the group reconstruction principles of FRS6 'Acquisitions and Mergers',
using the merger accounting method for the combination of the group. The
accounts received an unqualified auditor's report.
The interim financial information has been prepared on the basis of the
accounting policies set out in the group accounts for the year ended 31 October
2002. The financial information for the periods ended 30 April 2003 and 2002 is
unaudited.
The interim financial information does not comprise statutory accounts as
defined in Section 240 of the Companies Act 1985.
Copies of this interim report are being posted to shareholders and are available
from the Company Secretary at Mitre Court, Fleming Way, Crawley, West Sussex,
RH10 9NJ.
2 Exceptional administrative expenses
Six months Six months Year
ended ended ended
30 April 30 April 31 October
2003 2002 2002
#'000 #'000 #'000
Contributions to employee benefit trust - - 7,404
Costs of reorganisation and introduction to AIM - - 1,107
- - 8,511
Contributions to employee benefit trust
The contributions to the employee benefit trust in the year ended 31 October
2002 represented the provision for payments in respect of that year, 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, the ultimate parent company, 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 group structure, as detailed in note 1,
and in obtaining admission to trading on AIM from 20 November 2002 respectively.
3 Taxation on (loss)/profit from ordinary activities
Six months Six months Year
ended ended ended
30 April 30 April 31 October
2003 2002 2002
#'000 #'000 #'000
Current tax
UK corporation tax on result for the period - (113) (670)
Adjustments in respect of prior periods (1) - -
Payments to be made for group relief received - - (773)
(1) (113) (1,443)
Deferred tax
Origination and reversal of timing differences 2,760 2,327 647
Taxation credit/(charge) on (loss)/profit on ordinary activities 2,759 2,214 (796)
4 Dividends
Six months Six months Year
ended ended ended
30 April 30 April 31 October
2003 2002 2002
#'000 #'000 #'000
Special final dividends paid - - 6,000
In the year ended 31 October 2002, special 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 interim dividend has been paid or proposed for
the period ended 30 April 2003.
5 (Loss)/earnings per share
The calculation of (loss)/earnings per share for the six months ended 30 April
2003 is based on the loss after taxation of #6,542,000 (30 April 2002 loss of:
#3,769,000; 31 October 2002 profit of: #2,583,000). The calculation of basic
(loss)/earnings per share and diluted (loss)/earnings per share is based on a
weighted average number of shares in issue during the year. The basic and
diluted loss per share figures for each period are the same, as the effect of
all potential ordinary shares to be issued is anti-dilutive.
The number of shares used in these calculations and the reconciliation of
denominators used for basic and diluted (loss)/earnings per share calculations
are set out in the table below:
Dilutive
effect of
Basic share Diluted
number options number
Period ended 30 April 2003 96,000,000 - 96,000,000
Period ended 30 April 2002 96,000,000 - 96,000,000
Year ended 31 October 2002 96,000,000 - 96,000,000
Additional disclosure is provided below in respect of (loss)/
earnings per share, before amortisation of goodwill and exceptional items, as
the directors believe this gives a better view of ongoing comparable earnings.
Six months Six months Year
ended ended ended
30 April 30 April 31 October
2003 2002 2002
pence pence pence
Basic (loss)/earnings per share (6.81) (3.93) 2.69
Effect of add back of:
Amortisation of goodwill 0.01 - 0.03
Exceptional items (see note 2) - - 8.87
Taxation adjustment on allowable exceptional
items at 30% - - (2.31)
Adjusted (loss)/earnings per share before amortisation
of goodwill and exceptional items (6.80) (3.93) 9.28
6 Reconciliation of operating (loss)/profit to net cash (outflow)/
inflow from operating activities
Six months Six months Year
ended ended ended
30 April 30 April 31 October
2003 2002 2002
#'000 #'000 #'000
Operating (loss)/profit (9,432) (6,026) 3,165
Amortisation of goodwill 9 - 28
Depreciation 240 224 410
Decrease/(increase) in debtors 2,029 (4,032) (5,838)
(Decrease)/ increase in creditors (1,046) 4,288 15,792
Increase in provisions 450 - -
(Profit)/loss on disposal of fixed assets - (3) 21
Net cash (outflow)/inflow from operating activities (7,750) (5,549) 13,578
7 Analysis of net funds
At At
1 November Cash Other non- 30 April
2002 flow cash changes 2003
#'000 #'000 #'000 #'000
Short term bank deposits 18,472 (7,984) - 10,488
Cash at bank and in hand 1,948 (84) - 1,864
Overdrafts (116) 116 - -
Net cash 1,832 32 - 1,864
Liquid resources 18,472 (7,984) - 10,488
Debt due after one year (1,238) - 31 (1,207)
Debt due within one year (90) 31 (31) (90)
Finance leases (21) 4 - (17)
Financing (1,349) 35 - (1,314)
Total 18,955 (7,917) - 11,038
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR DBLBXXQBXBBE