Interim Results for the 6 months ended 31 March 20
30 June 2020
On the Beach Group plc
("On the Beach", "OTB", the "Company" or the "Group")
INTERIM RESULTS FOR SIX MONTHS ENDED 31 MARCH 2020
WELL-PLACED TO CAPITALISE ON STRUCTURAL CHANGES IN THE MARKET POST COVID-19
Financial Overview
Financial Highlights & Operational Highlights
|
|
6 months to |
6 months to |
Change |
|||
|
|
Adjusted (1) |
GAAP |
Adjusted (1) |
GAAP |
Adjusted (1) |
GAAP |
|
Group revenue |
£52.8m |
£21.4m |
£63.5m |
£63.5m |
(17%) |
(66%) |
|
Revenue as Agent* |
£37.3m |
£5.9m |
£45.0m |
£45.0m |
(17%) |
(87%) |
|
Revenue as Principal** |
£15.5m |
£15.5m |
£18.5m |
£18.5m |
(16%) |
(16%) |
|
Group gross profit |
£37.5m |
£7.6m |
£47.5m |
£47.5m |
(21%) |
(84%) |
|
Gross profit as Agent |
£35.3m |
£5.4m |
£45.0m |
£45.0m |
(22%) |
(88%) |
|
Gross profit as Principal |
£2.2m |
£2.2m |
£2.5m |
£2.5m |
(12%) |
(12%) |
|
Group (loss)/profit before tax |
£2.3m |
(£34.1m) |
£15.7m |
£11.9m |
(85%) |
- |
|
Basic (loss)/earnings per share (2) |
1.4p |
(21.1)p |
9.5p |
7.3p |
- |
- |
|
Interim dividend payable |
Nil |
Nil |
1.3p |
1.3p |
- |
- |
(1) Group adjusted profit before tax is profit before tax, amortisation of acquired intangibles of £2.7m (2019: £2.8m), share based payments credit of £1.0m (2019: cost of £0.5m) and exceptional items of £34.7m (2019: £0.5m)
(2) Adjusted earnings per share is Group adjusted profit after tax divided by the average number of shares in issue during the period
*As an agent, revenue is accounted on a "booked" rather than "travelled" basis (unlike tour operators and airlines) and the Group is reporting H1 bookings taken between 1 October 2019 and 31 March 2020. Many of the bookings taken in H1 were cancelled towards the end of the period or have subsequently been cancelled due to the closure of airspace. As a result, cancellations/refunds are recognised more quickly in an agent's financial results than in a principal's.
** As a principal, revenue is accounted on a "travelled" basis and reported on a gross basis.
· Prior to the escalation of the COVID-19 pandemic in Europe, the Group was trading well. As outlined in the AGM Trading Update released on 6 February 2020, in the first four months of FY20 and following the collapse of the Thomas Cook Group ("TCG"), the Group priced competitively and total holiday sales grew by 29% (excluding Classic Collection Holidays) for Summer 2020 departures.
· H1 revenue of £21.4m was down 66% on prior year due to COVID-19 related cancellations and a significant reduction in demand from mid-February when COVID-19 began to spread to Europe. Adjusting for the exceptional cancellations H1 adjusted revenue of £52. 8m is down 17%.
· H1 adjusted profit before tax of £2.3m is down £13.4m on prior year, impacted by the reduction in consumer demand and increased offline marketing spend which, as announced on 8 April 2020, will now not pay back in H2.
· Total exceptional costs in the period of £34.7m represents the estimated cost of COVID-19 to trading in H1. This is primarily the cost of COVID-19 related cancellations or expected cancellations and associated administrative expenses.
· Net debt at 31 March 2020 was £13.0m excluding customer monies held in a ring-fenced trust account ("Trust") of £68.8m. At 31 May 2020 the Group's cash position, following a successful share placing on 22 May 2020, was £50.5m excluding £54.8m of customer monies held in Trust and after repayment of the £30m RCF.
· As announced on 8 April 2020 and 21 May 2020 respectively, the Group also has access to a £75m RCF facility which, at 31 May 2020, remained undrawn.
· The Directors believe that the Group's asset light business model, alongside Trust account protection for customers, places the Company in a strong position for the future.
Explanation of adjustments
· Certain costs, including the exceptional impact of the COVID-19 pandemic, have been excluded from performance measures in this statement as the Board consider this necessary to provide a fair, balanced and understandable view of the performance of the Group. A full reconciliation of all non-GAAP measures to the closest equivalent GAAP measure is included in the glossary.
· Whilst the underlying result has still been significantly impacted by the COVID-19 pandemic, the Board believe that adjusting for the items shown in the table below provides a clearer reflection of the Group's performance in the period. The Group organised package holidays for customers which have since been cancelled, or are likely to be cancelled, due to airspace closures and government advice on travel. See note 2.5 for details of the adjustments.
· The Group has not estimated the financial impact of, or made an adjustment for, the significant reduction in booking volumes in February and March 2020 as a result of the COVID-19 pandemic.
· A summary of the adjustments between Adjusted and GAAP measures, split between the COVID-19 impact and other costs, is shown below:
|
|
H1 2020 |
H1 2019 |
||
|
|
COVID-19 |
Other |
Total |
Total |
|
Group revenue |
(£31.4m) |
- |
(£31.4m) |
- |
|
Revenue as Agent |
(£31.4m) |
- |
(£31.4m) |
- |
|
Cost of sales (3) |
1.5m |
- |
1.5m |
- |
|
Group overheads |
(£4.8m) |
(£1.7m) |
(£6.5m) |
(£3.8m) |
|
Share Based Payments |
- |
£1.0m |
£1.0m |
(£0.5m) |
|
Acquired Intangibles Amortisation |
- |
(£2.7m) |
(£2.7m) |
(£2.8m) |
|
Other exceptional operating costs (4) |
(£4.8m) |
- |
(£4.8m) |
(£0.5m) |
|
Group profit before tax |
(£34.7m) |
(£1.7m) |
(£36.4m) |
(£3.8m) |
(3) Agents' commission no longer due on cancelled holiday bookings
(4) Provision for amounts due from suppliers £3.3m, exceptional development spend £1.2m, legal and professional fees £0.3m (2019: Double property costs £0.3m, Acquisition costs £0.1m and Recruitment costs of £0.1m)
A full explanation of all adjusted performance measures is included in the Glossary
COVID-19 Impact and Response
· COVID-19 has significantly impacted On the Beach and the entire global travel industry.
· OTB's trading performance has been impacted by both a material reduction in underlying bookings from February 2020 and the reversal of revenue generated for bookings received in H1 for travel in H2 that have either been cancelled or are likely to be cancelled.
· The Group took early action in the period to manage risk and conserve cash:
o In an environment of limited demand and as a result limited revenue, the Group's marketing costs reduced to almost nil.
o Further actions to limit other non-essential costs in a zero revenue environment resulting in monthly cash costs of less than 2m across the Group.
o The Group utilised the Coronavirus Job Retention Scheme to reduce staff costs across non-essential roles in the current environment.
o The Group has maintained all costs associated with the delivery of its future strategy, the call centre has operated a full service and s uppliers (including hotels) have all been paid within agreed terms.
o The Group's CEO is forgoing his salary and the remainder of the Board have voluntarily agreed to a 20% reduction in salary and fees. This is alongside no bonuses being awarded across the Group in the current financial year.
· On 8 April 2020 the Group reach ed agreement with its bank, Lloyds Banking Group plc ("Lloyds") to extend the 50m RCF to all months of each year, extend the term to December 2023 and reset covenant tests for all periods up to and including June 2021.
· On 21 May 2020 the Group agreed an increase to these facilities, in the form of an incremental £25m RCF under the Coronavirus Large Business Interruption Loan Scheme ("CLBILS") with Lloyds, expiring in May 2022. The recently renegotiated £50m RCF remains in place, expiring in December 2023. As a result, the Group now has available to it maximum working capital facilities of £75m.
· In addition, on 22 May 2020, the Group issued the equivalent of 19.9% of issued share capital with no discount raising £65m cash, net of fees.
· The Board believes that the above measures allow the Group to simultaneously increase investment in its digital platforms; continue to drive brand through investment in online and offline marketing activity; improve conversion with attractive low deposit schemes; and react to commercial opportunities in the UK and internationally as demand begins to normalise.
· The Group remains the only listed UK travel business that operates a fully ring-fenced customer trust account in which customer funds are held until the point of travel. Therefore, the Group does not rely on cash received for forward bookings to trade. Monies that have been received for holidays that are cancelled by a closure of airspace can be repaid to customers in cash with limited impact on the Group's working capital.
Current Trading & Outlook
· During April OTB Group bookings were at c.10% of normal volumes as consumer appetite for booking holidays remained subdued.
· From mid-June there has been a significant increase in demand for Summer 2020 departures, albeit from a very low base.
· Booking volumes for Summer 2021 remain low, but are significantly ahead of the prior year, partially due to the early release of flights for next year by most major airlines.
· Most airlines are seeking to resume flying, albeit at a significantly reduced level, in July 2020, in line with the partial reopening of resorts for overseas visitors. Whilst a significant number of bookings have been or will be cancelled, we do expect that some holidays booked to travel from 1 July to 31 October will go ahead as planned.
· The Board believes the business is well-positioned to grow market share as demand for holidays recovers. Whilst this recovery is likely to take some time and the consumer environment will continue to be challenging, the Group remains confident in the resilience and flexibility of our business model and believe there is an exciting opportunity to increase our market share over the short to medium term.
· The Board will continue to evaluate internal and external opportunities that will both increase scale and deliver value for shareholders.
· In light of the continued market uncertainties, the Group is maintaining its suspension of full year guidance until such time that the overall impact of COVID-19 on the Group becomes clearer.
Simon Cooper, Chief Executive of On the Beach Group plc, commented:
"In the aftermath of the Thomas Cook collapse, the Group made excellent progress in the first four months of the financial year, driving record levels of brand awareness and achieving sales growth of almost 30% for holidays departing in Summer 2020. We also made significant progress against our strategic objectives in the year with Classic Package Holidays going live in over 2,600 agencies alongside the continued expansion of our long haul offering.
The onset of the COVID-19 pandemic led to a rapid slowdown in demand for foreign travel followed by the total closure of airspace across Europe by mid-March. Our staff responded brilliantly to ensure that the Group delivered the highest possible customer service standards in the most difficult of circumstances.
On the Beach continues to successfully build a leading position as more consumers discover the ease of use and wide choice of beach holidays across our platforms. The flexibility and asset light nature of our business model together with our recently strengthened balance sheet and the actions we have taken since the middle of March means we are well placed to capitalise on the inevitable structural changes in the market post COVID-19. As a result, the Board continues to look to the future with confidence."
Analyst Conference Call
A conference call for sell-side equity analysts will be held today at 10.30am, the details of which can be obtained through FTI Consulting.
For further information:
|
On the Beach Group plc Simon Cooper, Chief Executive Officer Paul Meehan, Chief Financial Officer
|
via FTI Consulting |
|
FTI Consulting Alex Beagley Fiona Walker Sam Macpherson
|
Tel: +44 (0)20 3727 1000 |
About On the Beach
With over 20% share of online sales in the short haul beach holiday market, we are one of the UK's largest online beach holiday retailers. We have significant opportunities for growth and a long-term mission to become Europe's leading online retailer of beach holidays. By using our innovative technology, low-cost base and strong customer-value proposition to provide a structural challenge to legacy tour operators and online travel agents, we continue our journey to disrupt the online retail of beach holidays. Our model is customer-centric, asset light, profitable and cash generative.
Cautionary statement
This announcement may contain certain forward-looking statements with respect to the financial condition, results, operations and businesses of the Company. Forward looking statements are sometimes, but not always, identified by their use of a date in the future or such words as 'anticipates', 'aims', 'due', 'will', 'could', 'may', 'should', 'expects', 'believes', 'intends', 'plans', 'targets', 'goal' or 'estimates'. These forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that may or may not occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements, including factors outside the Company's control. The forward-looking statements reflect the knowledge and information available at the date of preparation of this announcement and will not be updated during the year. Nothing in this announcement should be construed as a profit forecast.
This statement together with the interim financial statements and investor presentation is available on www.onthebeachgroupplc.com .
Chief Executive's Review
Summary of Operating Performance and COVID-19
First and foremost, the health and wellbeing of our team members and our customers is and always will be the Group's top priority. I am pleased that everyone across the team has responded with speed and professionalism to the current challenges around COVID-19.
On the Beach continues to be a dynamic, entrepreneurial and ambitious business delivering value for money beach holidays that are personalised to our customers' individual needs. The Group maintains a daily focus to improve the quality of its customer proposition and the value that it provides to its growing customer base.
In the first four months of the financial year and the aftermath of the collapse of Thomas Cook Group we believe we were able to drive a significantly increased share of market. We continued to invest in both online and offline marketing activity and these investments led to record levels of brand awareness and branded traffic. Our expansion into longer haul destinations and our B2B presence via the Classic Collection and Classic Package Holidays brands was running well ahead of plan prior to the COVID-19 shutdown and we look forward to continuing this progress as the market normalises.
Strategy and growth
The Group's vision is to build Europe's leading beach holiday retailer via a single platform multi-brand strategy.
On the Beach continues to deliver significant growth in its core and adjacent markets by evolving a strategy based on the following strategic pillars:
1. Investing in talent and technology to extend core capabilities
- Continuing to invest in our people and our platform to allow us to innovate at an increasing pace
- Investing in our People function to ensure that we drive optimum performance from a growing talent base
- Evolving platform capabilities to simplify the integration of further brands
2. Driving an efficient increase in traffic through branded and direct channels
- Investing in an efficient multi-channel approach supported by our sophisticated bid management capability
- Increasing investment offline in conjunction with econometric modelling capability to strengthen brand awareness and to ensure marketing investment is efficient
3. Personalising our customer experience
- Driving an increasingly simplified customer experience
- Showing the most relevant product to all site visitors on all devices at the earliest possible opportunity
- Optimising our multifunctional app to increase customer engagement
4. Leveraging increased revenue through direct and differentiated supply
- Building a programme of direct and differentiated supply
- Building our in-house capability to increase visibility of differentiated product
- Leveraging our multi-brand capability to offer a range of distribution options
5. Inspiring holidaymakers with destination agnostic search technologies
- Optimising destination agnostic search technologies
- Leveraging capabilities to retail a wider range of product from a wider range of suppliers
6. Reaching an ever-wider audience of beach holidaymakers through product, channel and geographic extension
- Expanding our long haul offering to monetise existing search volumes
- Growing share of B2B sales through the CPH online agent-facing portal
- Evolving the product portfolio of the Classic luxury B2B brand
- Leveraging our core capabilities to grow market share in Scandinavia
- Seeking value-enhancing M&A opportunities
Refunds for COVID-19 impacted bookings
When an OTB customer books a holiday, all funds paid to the Group, excluding any flight costs which are paid immediately to the flight operator, are held in a ring-fenced trust account until the customer returns from their holiday, at which point the funds are released to OTB. As such all affected customers are receiving refunds for Hotels and Transfers within 14 days of cancellation, as stipulated by the Package Travel Regulations.
Refunds due to customers for the flight element of their holiday are paid as soon as this refund has been received from the airline. To comply with EU261 an airline must offer a cash refund for cancelled flights and this must be reimbursed within 7 days. During this period, there has been widespread non-compliance with this regulation which has impacted the Group's ability to provide timely refunds for customers' flights. The Group remains committed to ensuring that customers receive any refunds due for cancelled flights, in cash.
Current trading and outlook
During April, OTB Group bookings were at c.10% of normal volumes as consumer appetite for booking holidays remained subdued. From mid-June there has been a significant increase in demand for Summer 2020 departures, albeit from a very low base. Booking volumes for Summer 2021 remain low, but are significantly ahead of the prior year, partially due to the early release of flights for next year by most major airlines.
Most airlines are seeking to resume flying, albeit at a significantly reduced level, in July 2020, in line with the partial reopening of resorts for overseas visitors. Whilst a significant number of bookings have been or will be cancelled, we do expect that some of the holidays booked to travel from 1 July to 31 October will go ahead as planned.
The Board believes the business is well-positioned to grow market share as demand for holidays recovers. Whilst this recovery is likely to take some time and the consumer environment will continue to be challenging, the Group remains confident in the resilience and flexibility of our business model and believe there is an exciting opportunity to increase our market share over the short to medium term. The Board will continue to evaluate internal and external opportunities that will both increase scale and deliver value for shareholders.
In light of the continued market uncertainties, the Group is maintaining its suspension of full year guidance until such time that the overall impact of COVID-19 on the Group becomes clearer.
Segmental performance
The Group organises its operations into four principal financial reporting segments, being OTB (onthebeach.co.uk and sunshine.co.uk), International (ebeach.se, ebeach.no and ebeach.dk), CCH (Classic Collection Holidays) and CPH (Classic Package Holidays).
OTB Segment performance
|
|
H1 2020 |
H1 2020 |
H1 2019 |
H1 2019 |
|
|
Adjusted £m |
GAAP £m |
Adjusted £m |
GAAP £m |
|
Revenue |
34.4 |
5.2
|
44.6 |
44.6 |
|
Online Marketing costs |
(11.7) |
(11.7) |
(14.9) |
(14.9) |
|
Offline Marketing costs |
(8.4) |
(8.4) |
(4.1) |
(4.1) |
|
Revenue after marketing costs |
14.3 |
(14.9) |
25.6 |
25.6 |
|
Variable costs |
(3.2) |
(3.2) |
(2.7) |
(2.7) |
|
Fixed costs |
(4.9) |
(4.9) |
(4.2) |
(4.2) |
|
Depreciation and amortisation |
(2.8) |
(2.8) |
(2.0) |
(2.0) |
|
Exceptional operating costs |
- |
(4.6) |
- |
(0.5) |
|
Share based payments |
- |
1.0 |
- |
(0.5) |
|
Amortisation of acquired intangibles |
- |
(2.2) |
- |
(2.3) |
|
Operating profit |
3.4 |
(31.6) |
16.7 |
13.4 |
|
EBITDA * |
6.2 |
(26.6) |
18.7 |
17.7 |
|
EBITDA % |
18% |
- |
42% |
40% |
*see glossary for reconciliation to nearest GAAP measure
In response to the collapse of Thomas Cook Group, the Group more than doubled spend on offline marketing campaigns to £8.4m (H1 2019: £4.1m) to increase brand awareness and gain market share. This contributed to strong trading for Summer 2020 departures prior to the COVID-19 outbreak spreading to Europe in February 2020. The YOY growth in sales transaction value for the four months to January 2020 was 24%.
The Group also continued to make significant progress with expanding its long haul proposition. Long haul package holiday bookings to 31 January increased by 145% and we expect to see further expansion in this area when the COVID-19 pandemic has eased.
As announced on 28 February 2020, the Group experienced a reduction in demand for Summer 2020 travel following the reports of COVID-19 cases in early February. The reduction in demand accelerated significantly as cases increased in Europe, particularly when COVID-19 cases were reported in Tenerife.
As a result of this reduction in demand, adjusted revenue decreased by (23%) to £34.4m (H1 2019: £44.6m). Revenue, accounting for COVID-19 cancellations, was down to £5.2m (H1 19: £44.6m).
Online marketing costs, which flex with demand, were £11.7m (H1 2019: £14.9m) and 34% (H1 2019: 33%) of revenue. However, adjusted revenue after all marketing costs reduced by (45%) to £14.3m due to the increased offline marketing spend in the period.
EBITDA
Overhead as % of revenue
|
|
H1 2020 |
H1 2020 |
H1 2019 |
H1 2019 |
|
|
Adjusted |
GAAP |
Adjusted |
GAAP |
|
Variable costs % revenue |
9% |
62% |
6% |
6% |
|
Fixed costs % revenue |
14% |
94% |
10% |
10% |
|
Overheads % revenue |
23% |
154% |
16% |
16% |
In anticipation of bookings and market share growth following the failure of TCG, the Group continued to invest in areas that will support the long term prospects of the Company. When demand began to fall in February, and ultimately when lockdown was imposed, a series of cost cutting measures were implemented. However, the severe marketing conditions and resulting cancellations mean overheads as a percentage of adjusted revenue have increased to 23% (H1 2019 16%). The Group is well positioned to return to a pre-COVID operating leverage position once market conditions return to normal.
Adjusted EBITDA of £6.2m (H1 2019 £18.7m) decreased by 67% and adjusted EBITDA as a percentage of revenue decreased to 18% (H1 2019 41%). The closest GAAP equivalent measure to Adjusted EBITDA is operating profit which decreased to a loss of £31.6m (H1 2019 profit £13.4m). This decrease is attributable to the reduction in demand due to COVID-19 and the resulting impact on operating leverage.
International Segment performance
|
|
H1 2020 |
H1 2020 |
H1 2019 |
H1 2019 |
|
|
Adjusted £m |
GAAP £m |
Adjusted £m |
GAAP £m |
|
Revenue |
0.3 |
0.1 |
0.4 |
0.4 |
|
Revenue after marketing costs |
- |
(0.2) |
- |
- |
|
Variable costs |
(0.1) |
(0.1) |
(0.1) |
(0.1) |
|
Fixed costs |
(0.1) |
(0.1) |
(0.1) |
(0.1) |
|
Depreciation and amortisation |
- |
- |
(0.1) |
(0.1) |
|
Operating profit |
(0.2) |
(0.4) |
(0.3) |
(0.3) |
|
EBITDA* |
(0.2) |
(0.4) |
(0.2) |
(0.2) |
*see glossary for reconciliation to nearest GAAP measure
Performance summary
In the first four months to January 2020, bookings were down 4% YOY. This reduction follows the collapse of TCG, resulting uncertainty around the Ving airline and a general softening of demand for overseas travel in Sweden in particular.
The International segment operated until this point at a breakeven level at revenue after marketing. Thereafter, the onset of the COVID-19 pandemic resulted in a significant reduction in demand.
Adjusted revenue was down 25% to £0.3m (H1 2019 £0.4m) due to a slowdown in demand in February and March. Revenue, accounting for COVID-19 cancellations, was down to £0.1m.
Adjusted EBITDA was maintained at a loss of (£0.2m) (H1 2019 loss (£0.2m)) due to a reduction in marketing spend. The closest GAAP equivalent measure to International EBITDA is operating loss which increased to (£0.4m) (H1 19 (£0.3m)).
The International segment comprises websites in Sweden, Norway, and Denmark operating under the 'www.ebeach.se', 'www.ebeach.no', and 'www.ebeach.dk' domains.
Classic segment performance
|
|
H1 2020 |
H1 2020 |
H1 2019 |
H1 2019 |
|
|
Adjusted £m |
GAAP £m |
Adjusted £m |
GAAP £m |
|
Revenue |
15.5 |
15.5 |
18.5 |
18.5 |
|
Gross profit |
2.2 |
2.2 |
2.5 |
2.5 |
|
Gross Profit after marketing costs |
1.7 |
1.7 |
2.0 |
2.0 |
|
Variable costs |
(0.6) |
(0.6) |
(0.6) |
(0.6) |
|
Fixed costs |
(1.4) |
(1.4) |
(1.5) |
(1.5) |
|
Depreciation and amortisation |
(0.1) |
(0.1) |
(0.1) |
(0.1) |
|
Amortisation of acquired intangibles |
- |
(0.5) |
- |
(0.5) |
|
Operating profit / (loss) |
(0.4) |
(0.9) |
(0.2) |
(0.7) |
|
EBITDA* |
(0.3) |
(0.3) |
(0.1) |
(0.1) |
*see glossary for reconciliation to nearest GAAP measure
As a principal (rather than an agent) Classic accounts for revenue on a "travelled" basis and reports revenue on a gross basis.
Revenue decreased by 16% to 15.5m and operating losses increased from £0.7m to £0.9m. This reduction in revenue is due to:
· The failure of TCG on 23 September 2019 and the resulting closure of TCG-controlled travel agencies which represented c25% of Classic's high street distribution. Most of these shops had reopened under Hays Travel by mid-January 2020.
· A significant reduction in demand from February 2020.
c40% of customers whose Summer 2020 travel plans have been impacted by COVID-19 have opted to amend their booking to a later date.
The management team continues to develop the luxury and tailor-made travel proposition, and long-haul product was launched in the period with brochures being made available in shops from January 2020.
CPH segment performance
|
|
H1 2020 |
H1 2020 |
H1 2019 |
H1 2019 |
|
|
Adjusted £m |
GAAP £m |
Adjusted £m |
GAAP £m |
|
Revenue |
2.6 |
0.6 |
- |
- |
|
Gross profit |
0.6 |
0.1 |
- |
- |
|
Gross Profit after marketing costs |
0.4 |
(0.1) |
- |
- |
|
Variable costs |
(0.2) |
(0.2) |
- |
- |
|
Fixed costs |
(0.7) |
(0.9) |
(0.5) |
(0.5) |
|
Depreciation and amortisation |
(0.1) |
(0.1) |
- |
- |
|
Operating profit / (loss) |
(0.6) |
(1.3) |
(0.5) |
(0.5) |
|
EBITDA* |
(0.5) |
(1.2) |
(0.5) |
(0.5) |
*see glossary for reconciliation to nearest GAAP measure
CPH provides an online B2B platform that enables high street travel agents to sell dynamically packaged holidays to their customers.
Adjusted Revenue for the period was £2.6m, and adjusted EBITDA was (£0.5m). After accounting for COVID-19 related cancellations, revenue was £0.6m and operating losses were (£1.3m).
The CPH trading result has been significantly impacted by COVID-19, both due to a drop in demand, and the cancellation of a significant proportion of bookings made for travel this year.
Prior to the onset of the pandemic, significant progress had been made with the strategy to increase distribution of CPH product, which is now available in 2,600 high street travel agents.
Agent activity had also significantly increased and in January 2020 alone total holiday sales of over £7m were booked with over 1,000 agents.
Finance costs
During the period the Group had in place a revolving credit facility of up to £50m with Lloyds which was extended to £75m on 21 May 2020. The drawdown at 31 March 2020 was £30.0m (H1 2018: £9.5m) and the peak drawdown for the period was £30.0m.
As mentioned earlier in these statements, the Group has renewed and extended its banking facilities. Details of the current facility limits and maturity dates are as follows:
|
Facilities |
£m |
Issued |
Expiry |
Drawn at 30 June 2020 |
|
Original RCF |
£50m |
Apr 2020 |
Dec 2023 |
£nil |
|
New CLBILS facility |
£25m |
May 2020 |
May 2022 |
£nil |
|
Total facility |
£75m |
|
|
£nil |
Share based payments
The Group has an LTIP scheme in place which vests based on performance criteria. In accordance with IFRS 2, the group has recognised a non-cash credit of £1.0m (H1 2019: charge £0.5m). The credit this year relates to the reversal of benefits accrued for the 2018 incentive scheme which, as a result of COVID-19, is now unlikely to vest in full.
Taxation
The Group tax credit of £6.4m represents an effective rate of 18.7% (H1 2019: 19%) which is lower than the average standard UK rate of 19% (H1 2019: 19%). This is due to changes in future deferred tax rates.
The Group has reclaimed all tax payments on account relating to the year ending 30 September 2020 (£1.5m received in May 2020), and we expect to make no further payments on account this financial year due to the loss making position of the Group.
Cash flow
|
£m |
H1 2020 |
H1 2019 |
FY19 |
|
Profit before tax |
(34.1) |
11.9 |
19.3 |
|
Depreciation and amortisation |
5.7 |
4.9 |
10.3 |
|
Net finance (income) / costs |
(0.1) |
- |
- |
|
Share based payments |
(1.0) |
0.5 |
0.7 |
|
Movement in working capital |
(31.7) |
(57.2) |
(3.2) |
|
Cash generated from operating activities |
(61.2) |
(39.9) |
27.1 |
|
|
|
|
|
|
Other Cash Flows |
|
|
|
|
Corporation Tax |
(1.2) |
(0.2) |
(3.8) |
|
Capitalised development expenditure |
(2.0) |
(2.3) |
(5.1) |
|
Capital expenditure |
(1.1) |
(3.4) |
(3.3) |
|
Sale of assets |
0.2 |
0.3 |
0.3 |
|
Net finance income/(costs) |
0.2 |
0.1 |
0.2 |
|
Payment of lease liabilities |
(0.1) |
(0.3) |
(0.6) |
|
Dividends paid |
(2.6) |
(2.9) |
(4.6) |
|
Deferred consideration |
- |
- |
(2.7) |
|
Net cash flows |
(67.8) |
(48.6) |
7.5 |
|
|
|
|
|
|
Opening cash balance |
54.8 |
47.3 |
47.3 |
|
Net (debt) / cash |
(13.0) |
(1.3) |
54.8 |
|
|
|
|
|
|
Proceeds from borrowings |
30.0 |
9.5 |
- |
|
Closing cash at bank |
17.0 |
8.2 |
54.8 |
|
Closing trust balance |
68.8 |
56.9 |
44.0 |
The cash flow profile of the Group is seasonal with approximately 50% of customers travelling in the period June to August and therefore in a normal year the cash flows (excluding any cash held in the Trust) experience a trough prior to June and a peak following this.
Net cash outflows of £67.8m are £19.2m higher than last year due to impact of the failure of TCG and no travel post lockdown.
Refunds for holidays that have or are expected to be cancelled due to the COVID-19 pandemic will either be refunded from the Trust account or from the airline.
Dividend
The Board has not declared an interim dividend (H1 2019: 1.3p), as announced on 8 April 2020.
Simon Cooper Paul Meehan
CEO CFO
30 June 2020 30 June 2020
|
On the Beach Group Plc INTERIM RESULTS FOR THE 6 MONTHS ENDED 31 MARCH 2020 |
||||||
|
CONDENSED CONSOLIDATED INCOME STATEMENT AND STATEMENT OF COMPREHENSIVE INCOME |
||||||
|
For the 6 months ended 31 March 2020 |
|
|
|
|
|
|
|
|
|
|
|
Restated (note 2.6) |
|
Restated |
|
|
|
6 months ended 31 March 2020 |
|
6 months ended 31 March 2019 |
|
Year ended 30 September 2019 |
|
|
|
|
|
|||
|
|
Note |
£'m |
|
£'m |
|
£'m |
|
|
|
unaudited |
|
unaudited |
|
audited |
|
|
|
|
|
|
|
|
|
Revenue |
3,4 |
21.4 |
|
63.5 |
|
140.4 |
|
Cost of sales |
|
(13.8) |
|
(16.0) |
|
(48.4) |
|
Gross profit |
|
7.6 |
|
47.5 |
|
92.0 |
|
|
|
|
|
|
|
|
|
Administrative expenses |
5 |
(41.8) |
|
(35.6) |
|
(72.7) |
|
Group operating profit |
|
(34.2) |
|
11.9 |
|
19.3 |
|
|
|
|
|
|
|
|
|
Finance costs |
|
(0.2) |
|
(0.2) |
|
(0.5) |
|
Finance income |
|
0.3 |
|
0.2 |
|
0.5 |
|
Net finance income/(costs) |
|
0.1 |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
Profit before taxation |
|
(34.1) |
|
11.9 |
|
19.3 |
|
Taxation |
6 |
6.4 |
|
(2.3) |
|
(3.7) |
|
|
|
|
|
|
|
|
|
Profit for the period |
|
(27.7) |
|
9.6 |
|
15.6 |
|
|
|
|
|
|
|
|
|
Other comprehensive income: |
|
|
|
|
|
|
|
Net loss on cash flow hedges |
|
- |
|
(0.3) |
|
(0.1) |
|
Total comprehensive income for the period |
|
(27.7) |
|
9.3 |
|
15.5 |
|
|
|
|
|
|
|
|
|
Attributable to: |
|
|
|
|
|
|
|
Equity holders of the parent |
|
(27.7) |
|
9.3 |
|
15.5 |
|
|
|
|
|
|
|
|
|
Basic and diluted earnings per share attributable to the equity Shareholders of the Company: |
|
|
|
|
|
|
|
Basic (Loss)/earnings per share |
7 |
(21.1p) |
|
7.3p |
|
11.9p |
|
Diluted (Loss)/earnings per share |
7 |
(21.0p) |
|
7.3p |
|
11.9p |
|
Adjusted earnings per share * |
7 |
1.4p |
|
9.5p |
|
21.3p |
|
|
|
|
|
|
|
|
|
Adjusted profit measure * |
|
|
|
|
|
|
|
Adjusted PBT (before amortisation of acquired intangibles, exceptional & non underlying costs and share based payments) * |
5 |
2.3 |
|
15.7 |
|
34.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* This is a non GAAP measure, refer to notes. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION |
|
|
||||
|
As at 31 March 2020 |
|
|
|
|
|
|
|
|
|
|
|
Restated |
|
Restated |
|
|
|
At 31 March 2020 |
|
At 31 March 2019 |
|
At 30 September 2019 |
|
|
|
£'m |
|
£'m |
|
£'m |
|
Assets |
Note |
unaudited |
|
unaudited |
|
audited |
|
Non-current assets |
|
|
|
|
|
|
|
Intangible assets |
8 |
82.4 |
|
86.3 |
|
85.1 |
|
Property, plant and equipment |
9 |
10.7 |
|
12.0 |
|
10.6 |
|
Investment property |
|
0.6 |
|
0.8 |
|
0.6 |
|
Total non-current assets |
|
93.7 |
|
99.1 |
|
96.3 |
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
Trade and other receivables |
10 |
172.1 |
|
189.4 |
|
94.6 |
|
Assets held for sale |
|
- |
|
0.2 |
|
0.2 |
|
Derivative financial instruments |
13 |
4.0 |
|
- |
|
- |
|
Corporation tax receivable |
|
7.8 |
|
- |
|
- |
|
Trust account |
12 |
68.8 |
|
56.9 |
|
44.0 |
|
Cash at bank |
|
17.0 |
|
8.2 |
|
54.8 |
|
Total current assets |
|
269.7 |
|
254.7 |
|
193.6 |
|
Total assets |
|
363.4 |
|
353.8 |
|
289.9 |
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
Share capital |
|
1.3 |
|
1.3 |
|
1.3 |
|
Retained earnings |
|
225.6 |
|
252.3 |
|
256.9 |
|
Capital contribution reserve |
|
0.5 |
|
0.5 |
|
0.5 |
|
Merger reserve |
|
(129.5) |
|
(129.5) |
|
(129.5) |
|
Total equity |
|
97.9 |
|
124.6 |
|
129.2 |
|
|
|
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
|
|
Deferred tax |
|
6.2 |
|
6.6 |
|
6.1 |
|
Total non-current liabilities |
|
6.2 |
|
6.6 |
|
6.1 |
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
Corporation tax payable |
|
- |
|
1.9 |
|
0.2 |
|
Trade and other payables |
11 |
200.7 |
|
207.2 |
|
141.1 |
|
Loans and overdrafts |
13 |
30.0 |
|
9.5 |
|
- |
|
Provisions |
11 |
28.6 |
|
- |
|
12.3 |
|
Derivative financial instruments |
13 |
- |
|
4.0 |
|
1.0 |
|
Total current liabilities |
|
259.3 |
|
222.6 |
|
154.6 |
|
|
|
|
|
|
|
|
|
Total liabilities |
|
265.5 |
|
229.2 |
|
160.7 |
|
Total equity and liabilities |
|
363.4 |
|
353.8 |
|
289.9 |
Paul Meehan
Chief Financial Officer
30 June 2020
On the Beach Group plc. Reg no 09736592
|
CONSOLIDATED STATEMENT OF CASH FLOWS
|
|
|
|
|
|
|
|
For the 6 months ended 31 March 2020 |
|
|
|
|
|
|
|
|
|
|
|
Restated |
|
Restated |
|
|
|
6 months ended 31 March 2020 |
|
6 months ended 31 March 2019 |
|
Year ended 30 September 2019 |
|
|
|
unaudited |
|
unaudited |
|
audited |
|
|
Note |
£'m |
|
£'m |
|
£'m |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit before taxation |
|
(34.1) |
|
11.9 |
|
19.3 |
|
Adjustments for: |
|
|
|
|
|
|
|
Depreciation |
|
1.0 |
|
0.7 |
|
1.6 |
|
Amortisation of intangible assets |
|
4.7 |
|
4.2 |
|
8.7 |
|
Finance costs |
|
0.2 |
|
0.2 |
|
0.5 |
|
Finance income |
|
(0.3) |
|
(0.2) |
|
(0.5) |
|
Share based payments |
|
(1.0) |
|
0.5 |
|
0.7 |
|
|
|
(29.5) |
|
17.3 |
|
30.3 |
|
Changes in working capital: |
|
|
|
|
|
|
|
(Increase) in trade and other receivables |
|
(81.5) |
|
(115.2) |
|
(22.2) |
|
Increase in trade and other payables |
|
74.6 |
|
76.5 |
|
24.6 |
|
(Increase) in trust account |
|
(24.8) |
|
(18.5) |
|
(5.6) |
|
|
|
(31.7) |
|
(57.2) |
|
(3.2) |
|
|
|
|
|
|
|
|
|
Cash flows from operating activities |
|
|
|
|
|
|
|
Cash generated from operating activities |
|
(61.2) |
|
(39.9) |
|
27.1 |
|
Tax paid |
|
(1.2) |
|
(0.2) |
|
(3.8) |
|
Net cash flow from operating activities |
|
(62.4) |
|
(40.1) |
|
23.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
|
|
Purchase of property, plant and equipment |
9 |
(1.1) |
|
(3.4) |
|
(3.3) |
|
Proceeds from disposal of assets held for sale |
|
0.2 |
|
0.3 |
|
0.3 |
|
Purchase of intangible assets |
8 |
(2.0) |
|
(2.3) |
|
(5.1) |
|
Interest received |
|
0.3 |
|
0.2 |
|
0.5 |
|
Contingent consideration |
|
- |
|
- |
|
(2.7) |
|
|
|
|
|
|
|
|
|
Net cash outflow from investing activities |
|
(2.6) |
|
(5.2) |
|
(10.3) |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
|
Proceeds from borrowings |
|
30.0 |
|
9.5 |
|
- |
|
Equity dividends paid |
|
(2.6) |
|
(2.9) |
|
(4.6) |
|
Interest paid |
|
(0.1) |
|
(0.1) |
|
(0.3) |
|
Payment of lease liabilities |
|
(0.1) |
|
(0.3) |
|
(0.6) |
|
Net cash in/(outflow) from financing activities |
|
27.2 |
|
6.2 |
|
(5.5) |
|
|
|
|
|
|
|
|
|
Net (decrease)/increase in cash at bank and in hand |
|
(37.8) |
|
(39.1) |
|
7.5 |
|
Cash at bank and in hand at beginning of period |
|
54.8 |
|
47.3 |
|
47.3 |
|
Cash at bank and in hand at end of period |
|
17.0 |
|
8.2 |
|
54.8 |
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY |
|
|||||
|
For the 6 months ended 31 March 2019 |
|
|
|
|
|
|
|
|
Share capital |
Merger reserve |
Capital contribution reserve |
Retained earnings |
Total |
|
|
For the year ended 30 September 2019 |
£'m |
£'m |
£'m |
£'m |
£'m |
|
|
Balance at 30 September 2018 restated (note 2.6) |
1.3 |
(129.5) |
0.5 |
245.2 |
117.5 |
|
|
|
|
|
|
|
|
|
|
Share based payments including tax |
- |
- |
- |
0.8 |
0.8 |
|
|
Dividends paid during the year |
- |
- |
- |
(4.6) |
(4.6) |
|
|
Total comprehensive income for the year restated (note 2.6) |
- |
- |
- |
15.5 |
15.5 |
|
|
Balance at 30 September 2019 |
1.3 |
(129.5) |
0.5 |
256.9 |
129.2 |
|
|
|
|
|
|
|
|
|
|
|
Share capital |
Merger reserve |
Capital contribution reserve |
Retained earnings |
Total |
|
|
For the 6 months ended 31 March 2019 |
£'m |
£'m |
£'m |
£'m |
£'m |
|
|
Balance at 30 September 2018 restated (note 2.6) |
1.3 |
(129.5) |
0.5 |
245.2 |
117.5 |
|
|
|
|
|
|
|
|
|
|
Share based payment charges |
- |
- |
- |
0.5 |
0.5 |
|
|
Dividends paid during the period |
- |
- |
- |
(2.9) |
(2.9) |
|
|
Tax on share options |
- |
- |
- |
0.2 |
0.2 |
|
|
Total comprehensive income for the period |
- |
- |
- |
9.3 |
9.3 |
|
|
Balance at 31 March 2019 (unaudited) |
1.3 |
(129.5) |
0.5 |
252.3 |
124.6 |
|
|
|
|
|
|
|
|
|
|
|
Share capital |
Merger reserve |
Capital contribution reserve |
Retained earnings |
Total |
|
|
For the 6 months ended 31 March 2020 |
£'m |
£'m |
£'m |
£'m |
£'m |
|
|
Balance at 30 September 2019 restated (note 2.6) |
1.3 |
(129.5) |
0.5 |
256.9 |
129.2 |
|
|
|
|
|
|
|
|
|
|
Share based payment charges including tax |
- |
- |
- |
(1.0) |
(1.0) |
|
|
Dividends paid during the period |
- |
- |
- |
(2.6) |
(2.6) |
|
|
Total comprehensive income for the period |
- |
- |
- |
(27.7) |
(27.7) |
|
|
Balance at 31 March 2020 (unaudited) |
1.3 |
(129.5) |
0.5 |
225.6 |
97.9 |
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
For the 6 months ended 31 March 2020 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
1 |
General Information |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
The interim condensed consolidated financial statements of On the Beach Group plc and its subsidiaries (collectively, the Group) for the six months ended 31 March 2020 were authorised for issue on 30 June 2020 in accordance with a resolution of the directors.
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2 |
Basis of preparation and changes to the Group's accounting policies |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2.1 |
Basis of preparation |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
The interim condensed consolidated financial statements for the six months ended 31 March 2020 have been prepared in accordance with IAS 34 Interim Financial Reporting. The interim condensed consolidated financial statements do not constitute statutory financial statements as defined in section 435 of the Companies Act 2006 and therefore do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual financial statements as at 30 September 2019. No audit or review opinion has been provided by a statutory auditor on these interim statements.
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2.2 |
Accounting policies |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
Except where noted below, the accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 30 September 2019. |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2.3 |
Principal risks and uncertainties |
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
There are a number of potential risks and uncertainties which could have a material impact on the Group's performance over the remaining six months of the financial year and could cause actual results to differ materially from expected and historical results. Whilst the principal risks and uncertainties faced by the Group remain those as set out on in our 2019 Annual report (please refer to pages 24 to 30 of that report, available on our website www.onthebeachgroupplc.com ), the effect of the on-going Covid-19 pandemic has been significant, increasing the levels of many of those risks:
The Directors have been closely monitoring these risks throughout the period of lockdown and where required, have implemented risk management plans and additional controls. |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2.4 |
Going concern |
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
On the Beach Group covers its daily working capital requirements by means of cash and a Revolving Credit Facility ("RCF").
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
As travel restrictions were imposed, a number of actions were taken immediately to reduce cash costs and protect the financial position of the Group: · Marketing costs were reduced to almost £nil · The low deposit offer was reduced on 25 February for new bookings travelling within 90 days to ensure flight costs were covered in full · The CEO sacrificed his salary and the remainder of the Board voluntarily agreed to a 20% reduction in salary and fees · No bonuses are being awarded across the Group in the current financial year · The Group participated in the Coronavirus Job Retention Scheme, obtained a refund of Corporation Tax paid and deferred both VAT & PAYE payments · The Group has not declared an interim dividend |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
The Group has also taken a number of actions to improve overall liquidity to ensure that it is well placed to operate through the pandemic and to trade once travel restrictions are eased. These actions include: · Extending the £50m RCF drawdown limit to all months of each year · Extending the term to December 2023 · Reset of covenant tests for all periods up to and including June 2021 · Agreeing an incremental £25m RCF under the Coronavirus Large Business Interruption Loan Scheme ("CLBILS"), expiring in May 2022 · On 22 May the Group also issued new shares generating £65m incremental liquidity (net of fees)
The net proceeds from the share placing, together with the revised banking facilities, provides the Group with greater resilience through the current downturn and will enable the Group to exit this extended disruptive period in a strong position.
Where holidays are cancelled as a result of the COVID-19 pandemic, the Group is committed to refunding customers in cash rather than vouchers. These cash refunds are fully funded from the Trust account (where refunds are for hotel and transfer payments) or are a pass-though from airlines. Therefore, there is no net cash outflow for refunds processed.
The Directors have modelled a number of scenarios, including what the directors consider to be a severe downside scenario of no travel or bookings until 1 October 2021. Even in this scenario, the Group would have headroom against its current facilities.
On the basis of the assumptions outlined above, the Group has and we expect will continue to have sufficient funds to meet its obligations as they fall due. Therefore the Board confirms that it considers it appropriate to continue to adopt the going concern basis in preparing the consolidated financial statements.
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2.5 |
Accounting estimates and judgements |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
In preparing these interim financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
COVID-19 |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
In preparing these interim financial statements, in addition to those estimates and judgements disclosed in the 2019 Annual Report, management has made additional judgements and assumptions to estimate the impact of the COVID-19 pandemic on bookings made before 31 March 2020 that had not departed by this date.
On 11 March 2020 the World Health Organised declared COVID-19 a global pandemic. On 17 March 2020, the Foreign and Commonwealth Office advised against all non-essential travel overseas, initially for a period of 30 days. In making their judgements as to the impact on cancellations of bookings made in the period, the directors considered the expected time period that travel would be restricted, the extent to which airlines will honour their original schedules thereafter and the expected impact on customer behaviour. On 5 April 2020, the Foreign and Commonwealth Office advice was extended indefinitely, which supported the assumptions taken by the directors.
In determining the cost, the Directors have assumed that travel recommences in July 2020, but at a much reduced level. On this basis, the Directors have assumed that a significant proportion of bookings for travel in Summer 2020 will not go ahead. Forward bookings for the Winter 20/21 and Summer 21 seasons at 31 March 2020 were not significant.
A summary of the adjustments between Adjusted and GAAP measures, split between the COVID-19 impact and other costs, is shown below:
(1) Agents' commission no longer due on cancelled holiday bookings (2) Provision for amounts due from suppliers £3.3m, exceptional development spend £1.2m, legal and professional fees £0.3m (2019: Double property costs £0.3m, Acquisition costs £0.1m and Recruitment costs of £0.1m) The total exceptional costs in the period of £34.8m represents the estimated cost of COVID-19 to trading in the period. This is primarily the cost of COVID-19 related cancellations or expected cancellations of £29.9m. The adjustment also includes a provisions against amounts due from suppliers of £3.3m, exceptional development spend of £1.2m and legal and professional fees of £0.3m.
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2.6 |
New standards, amendments and interpretations |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual consolidated financial statements for the year ended 30 September 2019, except for the adoption of new standards effective as of 1 October 2019. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective. |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
IFRS 16 Leases |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
IFRS 16 supersedes IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a Lease, SIC-15 Operating Leases-Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. The standard sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for most leases under a single on-balance sheet model. |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
The Group adopted IFRS 16 using the full retrospective method of adoption with the date of initial application of 1 October 2019. The Group elected to use the transition practical expedient allowing the standard to be applied only to contracts that were previously identified as leases applying IAS 17 and IFRIC 4 at the date of initial application. The Group also elected to use the recognition exemptions for lease contracts that, at the commencement date, have a lease term of 12 months or less and do not contain a purchase option ('short-term leases'), and lease contracts for which the underlying asset is of low value ('low-value assets').
The Group has identified two leases relating to the Digital and Operational HQ's that were previously accounted for under operating leases. These leases have been brought onto the balance sheet together with a corresponding lease liability. The effect of adoption of IFRS 16 is as follows: |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
Impact on the statement of financial position (increase/(decrease)): |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
At 31 March 2020 |
|
At 31 March 2019 |
|
At 30 September 2019 |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
Note |
£'m |
|
£'m |
|
£'m |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
Assets |
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
Right-of-use assets |
|
(a) |
3.9 |
|
4.4 |
|
4.2 |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
Prepayments |
|
|
0.3 |
|
- |
|
0.1 |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
Total assets |
|
|
4.2 |
|
4.4 |
|
4.3 |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
Equity |
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
Retained earnings |
|
|
(0.2) |
|
(0.2) |
|
(0.2) |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
Total equity |
|
|
(0.2) |
|
(0.2) |
|
(0.2) |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
Liabilities |
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
Lease Liabilities |
|
(a) |
4.4 |
|
4.6 |
|
4.5 |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
Total liabilities |
|
|
4.4 |
|
4.6 |
|
4.5 |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
Impact on the statement of profit or loss (increase/(decrease)): |
||||||||||||||||||||
|
|
|
|
|
At 31 March 2020 |
|
At 31 March 2019 |
|
At 30 September 2019 |
|||||||||||||
|
|
|
|
|
£'m |
|
£'m |
|
£'m |
|||||||||||||
|
|
Depreciation expense |
|
(0.2) |
|
(0.2) |
|
(0.5) |
||||||||||||||
|
|
Rent expense |
|
|
0.3 |
|
0.3 |
|
0.6 |
|||||||||||||
|
|
Finance costs |
|
|
(0.1) |
|
(0.1) |
|
(0.2) |
|||||||||||||
|
|
Profit for the period |
|
- |
|
- |
|
(0.1) |
||||||||||||||
|
|
|
|
|||||||||||||||||||
|
|
(a) Nature of the effect of adoption of IFRS 16 |
|
|||||||||||||||||||
|
|
The Group has lease contracts for its Manchester and Cheadle offices. Before the adoption of IFRS 16, the Group classified each of its leases, in respect of which it is the lessee, as operating leases. A lease was classified as a finance lease if it transferred substantially all of the risks and rewards incidental to ownership of the leased asset to the Group; otherwise it was classified as an operating lease. |
||||||||||||||||||||
|
|
Upon adoption of IFRS 16, the Group applied a single recognition and measurement approach for all leases, in respect of which it is the lessee, except for short-term leases and leases of low-value assets. The Group recognised lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets. In accordance with the full retrospective method of adoption, the Group applied IFRS 16 at the date of initial application as if it had already been effective at the commencement date of existing lease contracts. Accordingly, the comparative information in these interim condensed consolidated financial statements has been restated. |
||||||||||||||||||||
|
|
(b) Summary of new accounting policies |
|
|
||||||||||||||||||
|
|
Right-of-use assets |
|
|
|
|||||||||||||||||
|
|
The Group recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. The recognised right-of-use assets are depreciated on a straight-line basis over the lease term. Right-of-use assets are subject to impairment. |
||||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||
|
|
Lease liabilities |
|
|
|
|||||||||||||||||
|
|
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement date. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. |
||||||||||||||||||||
|
3 |
Revenue |
|
|
|
|
|
|
|
|||||||||||||
|
|
Set out below is the disaggregation of the Group's revenue from contracts with customers: |
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
For the 6 months ended 31 March 2020 |
|
|||||||||||||||||
|
|
|
|
OTB |
Int'l |
Classic |
CPH |
Total |
|
|||||||||||||
|
|
|
|
£'m |
£'m |
£'m |
£'m |
£'m |
|
|||||||||||||
|
|
Revenue before exceptional cancellations |
|
|
|
|
|
|
||||||||||||||
|
|
Sales as agent |
|
34.4 |
0.3 |
- |
2.6 |
37.3 |
|
|||||||||||||
|
|
Sales as principal |
|
- |
- |
15.5 |
- |
15.5 |
|
|||||||||||||
|
|
Total Revenue before exceptional cancellations |
34.4 |
0.3 |
15.5 |
2.6 |
52.8 |
|
||||||||||||||
|
|
Exceptional cancellations* |
|
(29.2) |
(0.2) |
- |
(2.0) |
(31.4) |
|
|||||||||||||
|
|
Total Revenue |
|
5.2 |
0.1 |
15.5 |
0.6 |
21.4 |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
*Exceptional cancellations in the 6 months ended 31 March 2020 relate to the impact of COVID-19. |
|
|
||||||||||||||||||
|
|
|
||||||||||||||||||||
|
|
|
|
For the 6 months ended 31 March 2019 |
|
|||||||||||||||||
|
|
|
|
OTB |
Int'l |
Classic |
CPH |
Total |
|
|||||||||||||
|
|
|
|
£'m |
£'m |
£'m |
£'m |
£'m |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
Sales as agent |
|
44.6 |
0.4 |
- |
- |
45.0 |
|
|||||||||||||
|
|
Sales as principal |
|
- |
- |
18.5 |
- |
18.5 |
|
|||||||||||||
|
|
Total Revenue |
|
44.6 |
0.4 |
18.5 |
- |
63.5 |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
For the year ended 30 September 2019 |
|
|||||||||||||||||
|
|
|
|
OTB |
Int'l |
Classic |
CPH |
Total |
|
|||||||||||||
|
|
|
|
£'m |
£'m |
£'m |
£'m |
£'m |
|
|||||||||||||
|
|
Revenue before exceptional cancellations |
|
|
|
|
|
|
||||||||||||||
|
|
Sales as agent |
|
90.3 |
1.4 |
- |
0.8 |
92.5 |
|
|||||||||||||
|
|
Sales as principal |
|
- |
- |
55.0 |
- |
55.0 |
|
|||||||||||||
|
|
Total Revenue before exceptional cancellations |
90.3 |
1.4 |
55.0 |
0.8 |
147.5 |
|
||||||||||||||
|
|
Exceptional cancellations** |
|
(7.0) |
- |
- |
(0.1) |
(7.1) |
|
|||||||||||||
|
|
Total Revenue |
|
83.3 |
1.4 |
55.0 |
0.7 |
140.4 |
|
|||||||||||||
|
|
**Exceptional cancellations in the year ended 30 September 2019 relate to the impact of TCG. |
|
|
||||||||||||||||||
|
4 |
Segmental report |
|
|
|
|
|
|
||||
|
|
The management team considers the reportable segments to be ''OTB'', "International", ''Classic'' and "CPH". All segment revenue, operating profit assets and liabilities are attributable to the Group from its principal activities. |
|
|||||||||
|
|
OTB, International and CPH recognise revenue as agent on a net basis. Classic recognises revenue as a principal on a gross basis. |
|
|||||||||
|
|
|
||||||||||
|
|
|
6 months ended 31 March 2020 |
|
||||||||
|
|
|
OTB |
Int'l |
Classic |
CPH |
Total |
|
||||
|
|
|
||||||||||
|
|
|
£'m |
£'m |
£'m |
£'m |
£'m |
|
||||
|
|
Income |
|
|
|
|
|
|
||||
|
|
Revenue before exceptional cancellations |
34.4 |
0.3 |
15.5 |
2.6 |
52.8 |
|
||||
|
|
Exceptional cancellations* |
(29.2) |
(0.2) |
- |
(2.0) |
(31.4) |
|
||||
|
|
Total Revenue |
5.2 |
0.1 |
15.5 |
0.6 |
21.4 |
|
||||
|
|
|
|
|
|
|
|
|
||||
|
|
Adjusted EBITDA |
6.2 |
(0.2) |
(0.3) |
(0.5) |
5.2 |
|
||||
|
|
Share based payments |
1.0 |
- |
- |
- |
1.0 |
|
||||
|
|
Exceptional costs |
(33.8) |
(0.2) |
- |
(0.7) |
(34.7) |
|
||||
|
|
EBITDA |
(26.6) |
(0.4) |
(0.3) |
(1.2) |
(28.5) |
|
||||
|
|
Depreciation and amortisation |
(5.0) |
- |
(0.6) |
(0.1) |
(5.7) |
|
||||
|
|
Group operating profit |
(31.6) |
(0.4) |
(0.9) |
(1.3) |
(34.2) |
|
||||
|
|
|
|
|
|
|
|
|
||||
|
|
Finance costs |
|
|
|
|
(0.2) |
|
||||
|
|
Finance income |
|
|
|
|
0.3 |
|
||||
|
|
Profit before taxation |
|
|
|
|
(34.1) |
|
||||
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||
|
|
Non-current assets |
|
|
|
|
|
|
||||
|
|
Goodwill |
31.6 |
- |
4.6 |
4.0 |
40.2 |
|
||||
|
|
Other intangible assets |
32.3 |
0.1 |
9.4 |
0.4 |
42.2 |
|
||||
|
|
Property, plant and equipment |
8.5 |
- |
2.2 |
- |
10.7 |
|
||||
|
|
Investment property |
- |
- |
0.6 |
- |
0.6 |
|
||||
|
|
|
|
|
|
|
|
|
||||
|
|
*Exceptional cancellations in the 6 months ended 31 March 2020 relate to the impact of COVID-19. |
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||
|
|
|
Restated (note 2.6) |
|
||||||||
|
|
|
6 months ended 31 March 2019 |
|
||||||||
|
|
|
OTB |
Int'l |
Classic |
CPH** |
Total |
|
||||
|
|
|
||||||||||
|
|
|
£'m |
£'m |
£'m |
£'m |
£'m |
|
||||
|
|
Income |
|
|
|
|
|
|
||||
|
|
Revenue |
44.6 |
0.4 |
18.5 |
- |
63.5 |
|
||||
|
|
|
|
|
|
|
|
|
||||
|
|
Adjusted EBITDA |
18.7 |
(0.2) |
(0.1) |
(0.5) |
17.9 |
|
||||
|
|
Share based payments |
(0.5) |
- |
- |
- |
(0.5) |
|
||||
|
|
Exceptional costs |
(0.5) |
- |
- |
- |
(0.5) |
|
||||
|
|
EBITDA |
17.7 |
(0.2) |
(0.1) |
(0.5) |
16.9 |
|
||||
|
|
Depreciation and amortisation |
(4.3) |
(0.1) |
(0.6) |
- |
(5.0) |
|
||||
|
|
Group operating profit |
13.4 |
(0.3) |
(0.7) |
(0.5) |
11.9 |
|
||||
|
|
|
|
|
|
|
|
|
||||
|
|
Finance costs |
|
|
|
|
(0.2) |
|
||||
|
|
Finance income |
|
|
|
|
0.2 |
|
||||
|
|
Profit before taxation |
|
|
|
|
11.9 |
|
||||
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||
|
|
Non-current assets |
|
|
|
|
|
|
||||
|
|
Goodwill |
31.6 |
- |
4.1 |
4.0 |
39.7 |
|
||||
|
|
Other intangible assets |
35.9 |
0.1 |
10.5 |
0.1 |
46.6 |
|
||||
|
|
Property, plant and equipment |
10.0 |
- |
2.0 |
- |
12.0 |
|
||||
|
|
Investment property |
- |
- |
0.8 |
- |
0.8 |
|
||||
|
|
|
|
|
|
|
|
|
||||
|
|
|
Restated (note 2.6) |
|
||||||||
|
|
|
Year ended 30 September 2019 |
|
||||||||
|
|
|
OTB |
Int'l |
Classic |
CPH** |
Total |
|
||||
|
|
|
||||||||||
|
|
|
£'m |
£'m |
£'m |
£'m |
£'m |
|
||||
|
|
Income |
|
|
|
|
|
|
||||
|
|
Revenue before exceptional cancellations |
90.3 |
1.4 |
55.0 |
0.8 |
147.5 |
|
||||
|
|
Exceptional cancellations*** |
(7.0) |
- |
- |
(0.1) |
(7.1) |
|
||||
|
|
Total Revenue |
83.3 |
1.4 |
55.0 |
0.7 |
140.4 |
|
||||
|
|
|
|
|
|
|
|
|
||||
|
|
Adjusted EBITDA |
38.8 |
(0.6) |
2.2 |
(1.1) |
39.3 |
|
||||
|
|
Share based payments |
(0.7) |
- |
- |
- |
(0.7) |
|
||||
|
|
Impact of Thomas Cook |
(7.2) |
- |
(0.4) |
(0.1) |
(7.7) |
|
||||
|
|
Exceptional costs |
(1.0) |
- |
(0.3) |
- |
(1.3) |
|
||||
|
|
EBITDA |
29.9 |
(0.6) |
1.5 |
(1.2) |
29.6 |
|
||||
|
|
Depreciation and amortisation |
(8.9) |
(0.1) |
(1.3) |
- |
(10.3) |
|
||||
|
|
Group operating profit |
21.0 |
(0.7) |
0.2 |
(1.2) |
19.3 |
|
||||
|
|
|
|
|
|
|
|
|
||||
|
|
Finance costs |
|
|
|
|
(0.5) |
|
||||
|
|
Finance income |
|
|
|
|
0.5 |
|
||||
|
|
Profit before taxation |
|
|
|
|
19.3 |
|
||||
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||
|
|
Non-current assets |
|
|
|
|
|
|
||||
|
|
Goodwill |
31.6 |
- |
4.6 |
4.0 |
40.2 |
|
||||
|
|
Other intangible assets |
34.5 |
0.1 |
10.0 |
0.3 |
44.9 |
|
||||
|
|
Property, plant and equipment |
8.9 |
- |
1.7 |
- |
10.6 |
|
||||
|
|
Investment property |
- |
- |
0.6 |
- |
0.6 |
|
||||
|
|
|
|
|
|
|
|
|
||||
|
|
** Trading commenced in March 2019 |
|
|
|
|||||||
|
|
*** Exceptional cancellations in the year ended 30 September 2019 relate to the impact of TCG.
|
|
|||||||||
|
5 |
Operating profit |
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||
|
a) |
Operating expenses |
|
|
|
|
|
|
||||
|
|
Expenses by nature including exceptional items and impairment charges:
|
|
|||||||||
|
|
|
|
|
Restated |
|
Restated |
|
||||
|
|
|
6 months ended 31 March 2020 |
|
6 months ended 31 March 2019 |
|
Year ended 30 September 2019 |
|
||||
|
|
|
unaudited |
|
unaudited |
|
Audited |
|
||||
|
|
|
£'m |
|
£'m |
|
£'m |
|
||||
|
|
|
|
|
|
|
|
|
||||
|
|
Marketing |
21.1 |
|
20.0 |
|
36.3 |
|
||||
|
|
Depreciation |
1.0 |
|
0.7 |
|
1.6 |
|
||||
|
|
Staff costs (including share based payments) |
4.8 |
|
5.4 |
|
14.7 |
|
||||
|
|
IT hosting, licences & support |
1.3 |
|
1.0 |
|
2.1 |
|
||||
|
|
Office expenses |
0.5 |
|
0.4 |
|
0.9 |
|
||||
|
|
Credit / debit card charges |
1.0 |
|
0.7 |
|
2.8 |
|
||||
|
|
Insurance |
0.4 |
|
0.2 |
|
0.6 |
|
||||
|
|
Other |
2.2 |
|
2.5 |
|
3.1 |
|
||||
|
|
Administrative expenses before exceptional cost & amortisation of intangible assets |
32.3 |
|
30.9 |
|
62.1 |
|
||||
|
|
|
|
|
|
|
|
|
||||
|
|
Impact of COVID-19* |
4.8 |
|
- |
|
- |
|
||||
|
|
Impact of Thomas Cook |
- |
|
- |
|
0.6 |
|
||||
|
|
Other exceptional costs |
- |
|
0.5 |
|
1.3 |
|
||||
|
|
Amortisation of intangible assets |
4.7 |
|
4.2 |
|
8.7 |
|
||||
|
|
Exceptional costs and amortisation of intangible assets |
9.5 |
|
4.7 |
|
10.6 |
|
||||
|
|
Administrative expenses |
41.8 |
|
35.6 |
|
72.7 |
|
||||
|
|
|
|
|
|
|
|
|
||||
|
|
* In addition to the exceptional cost of COVID-19, cost of sales include a credit of £1.5m for commission that is no longer due to agents for CPH bookings that will not travel as planned as a result of COVID-19. |
|
|||||||||
|
|
|
|
|
|
|
|
|
||||
|
b) |
Exceptional items |
|
|
|
|
|
|
||||
|
|
Exceptional items totalling £4.8m in the 6 months ended 31 March 2020 are related to the impact of COVID-19 which include provisions against amounts due from suppliers £3.3m, Exceptional development spend £1.2m, legal & professional fees £0.3m.
Exceptional operating items in the 6 months ended 31 March 2019 include £0.3m non-underlying property costs in relating to the move to the new Digital HQ, £0.1m acquisition costs and £0.1m of recruitment fees. |
|
|||||||||
|
|
The other exceptional costs for the year ended 30 September 2019 of £1.3m relate to £0.3m non-underlying property costs, £0.8m relating to organisational restructuring costs and £0.2m relating to other exceptional costs. |
|
|||||||||
|
|
|
|
|
|
|
|
|
||||
|
c) |
Adjusted PBT |
|
|
|
|
|
|
||||
|
|
Management measures the overall performance of the Group by reference to Adjusted PBT, a non-GAAP measure as it gives a meaningful year on year comparison of the Group's performance: |
|
|||||||||
|
|
|
|
|
Restated |
|
Restated |
|
||||
|
|
|
6 months ended 31 March 2020 |
|
6 months ended 31 March 2019 |
|
Year ended 30 September 2019 |
|
||||
|
|
|
unaudited |
|
unaudited |
|
Audited |
|
||||
|
|
|
£'m |
|
£'m |
|
£'m |
|
||||
|
|
Profit before taxation |
(34.1) |
|
11.9 |
|
19.3 |
|
||||
|
|
Total COVID-19 exceptional |
34.7 |
|
- |
|
- |
|
||||
|
|
Impact of Thomas Cook failure |
- |
|
- |
|
7.7 |
|
||||
|
|
Other exceptional costs |
- |
|
0.5 |
|
1.3 |
|
||||
|
|
Amortisation of acquired intangibles |
2.7 |
|
2.8 |
|
5.5 |
|
||||
|
|
Share based payments charge |
(1.0) |
|
0.5 |
|
0.7 |
|
||||
|
|
Adjusted PBT |
2.3 |
|
15.7 |
|
34.5 |
|
||||
|
|
|
|
|
|
|
|
|
||||
|
6 |
Taxation |
|
|
|
|
|
|
|
|
6 months ended 31 March 2020 |
|
6 months ended 31 March 2019 |
|
Year ended 30 September 2019 |
|
|
|
unaudited |
|
unaudited |
|
Audited |
|
|
|
£m |
|
£m |
|
£m |
|
|
|
|
|
|
|
|
|
|
Current tax on (loss)/profit for the year |
(6.5) |
|
2.9 |
|
4.8 |
|
|
Adjustments in respect of prior years |
- |
|
- |
|
(0.1) |
|
|
Total current tax |
(6.5) |
|
2.9 |
|
4.7 |
|
|
|
|
|
|
|
|
|
|
Deferred tax on profits for the period |
|
|
|
|
|
|
|
Origination and reversal of temporary differences |
0.1 |
|
(0.6) |
|
(1.0) |
|
|
Total deferred tax |
0.1 |
|
(0.6) |
|
(1.0) |
|
|
Total tax (credit)/charge |
(6.4) |
|
2.3 |
|
3.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The differences between the total taxation shown above and the amount calculated by applying the standard UK corporation taxation rate to the profit before taxation on continuing operating are as follows: |
|||||
|
|
|
6 months ended 31 March 2020 |
|
6 months ended 31 March 2019 |
|
Year ended 30 September 2019 |
|
|
|
unaudited |
|
unaudited |
|
Audited |
|
|
|
£m |
|
£m |
|
£m |
|
|
|
|
|
|
|
|
|
|
(Loss)/Profit on ordinary activities before tax |
(34.1) |
|
11.9 |
|
19.3 |
|
|
|
|
|
|
|
|
|
|
(Loss)/Profit on ordinary activities multiplied by the effective rate of corporation tax in the UK of 19% (2019: 19%) |
(6.5) |
|
2.3 |
|
3.7 |
|
|
|
|
|
|
|
|
|
|
Effects of: |
|
|
|
|
|
|
|
Adjustments in respect of prior years |
0.1 |
|
- |
|
(0.1) |
|
|
Expenses not deductible |
- |
|
- |
|
0.1 |
|
|
Total taxation (credit)/charge |
(6.4) |
|
2.3 |
|
3.7 |
|
|
|
|
|
|
|
|
|
|
The tax charge for the year is based on the effective rate of UK corporation tax for the period of 19% (2018: 19%).
The deferred tax liability has been calculated based on these rates. |
|||||
|
7 |
Earnings per share |
|
|
|
|
|
||||||
|
|
Basic earnings per share are calculated by dividing the profit attributable to equity holders of On the Beach Group plc by the weighted average number of ordinary shares issued during the year. |
|||||||||||
|
|
Adjusted earnings per share figures are calculated by dividing adjusted earnings after tax for the year by the weighted average number of shares. |
|||||||||||
|
|
|
|
|
Restated |
|
Restated |
||||||
|
|
|
6 months ended 31 March 2020 |
|
6 months ended 31 March 2019 |
|
Year ended 30 September 2019 |
||||||
|
|
|
Unaudited |
|
unaudited |
|
Audited |
||||||
|
|
|
£'m |
|
£'m |
|
£'m |
||||||
|
|
Basic EPS |
|
|
|
|
|
||||||
|
|
Profit after tax for the period |
(27.7) |
|
9.6 |
|
15.6 |
||||||
|
|
Basic weighted average number of Ordinary Shares (m) |
131.2 |
|
131.1 |
|
131.1 |
||||||
|
|
Earnings per share (in pence per share) |
(21.1p) |
|
7.3p |
|
11.9p |
||||||
|
|
|
|
|
|
|
|
||||||
|
|
Diluted EPS |
|
|
|
|
|
||||||
|
|
Profit after tax for the period |
(27.7) |
|
9.6 |
|
15.6 |
||||||
|
|
Weighted average number of Ordinary Shares (m) |
131.8 |
|
131.7 |
|
131.4 |
||||||
|
|
Earnings per share (in pence per share) |
(21.0p) |
|
7.3p |
|
11.9p |
||||||
|
|
|
|
|
|
|
|
||||||
|
|
Adjusted basic earnings per share |
|
|
|
|
|
||||||
|
|
Adjusted earnings after tax |
1.8 |
|
12.5 |
|
27.9 |
||||||
|
|
Weighted average number of Ordinary Shares (m) |
131.2 |
|
131.1 |
|
131.1 |
||||||
|
|
Earnings per share (in pence per share) |
1.4p |
|
9.5p |
|
21.3p |
||||||
|
|
|
|
|
|
|
|
||||||
|
|
Adjusted earnings after tax is calculated as follows: |
|
|
|||||||||
|
|
|
|
|
Restated |
|
Restated |
||||||
|
|
|
6 months ended 31 March 2020 |
|
6 months ended 31 March 2019 |
|
Year ended 30 September 2019 |
||||||
|
|
|
Unaudited |
|
unaudited |
|
Audited |
||||||
|
|
|
£'m |
|
£'m |
|
£'m |
||||||
|
|
|
|
|
|
|
|
||||||
|
|
Profit for the period after taxation |
(27.7) |
|
9.6 |
|
15.6 |
||||||
|
|
Adjustments (Net of Tax at 19%) |
|
|
|
|
|
||||||
|
|
Impact of exceptional Thomas Cook cancellations |
- |
|
- |
|
6.2 |
||||||
|
|
Impact of exceptional COVID-19 cancellations |
28.1 |
|
- |
|
- |
||||||
|
|
Other exceptional costs |
- |
|
0.4 |
|
1.0 |
||||||
|
|
Amortisation of acquired intangibles |
2.2 |
|
2.1 |
|
4.5 |
||||||
|
|
Share based payment charges* |
(0.8) |
|
0.4 |
|
0.6 |
||||||
|
|
Adjusted earnings after tax |
1.8 |
|
12.5 |
|
27.9 |
||||||
|
|
* The share based payment charges are in relation to options which are not yet exercisable.
|
|||||||||||
|
8 |
Intangible assets |
|||||||||||
|
|
|
|
||||||||||
|
|
|
Brand |
Goodwill |
Website & development Costs |
Website technology |
Customer relationships |
Total |
|||||
|
|
|
£'m |
£'m |
£'m |
£'m |
£'m |
£'m |
|||||
|
|
Cost |
|
|
|
|
|
|
|||||
|
|
At 1 October 2019 |
35.9 |
40.2 |
11.6 |
22.8 |
6.5 |
117.0 |
|||||
|
|
Additions |
- |
- |
2.0 |
- |
- |
2.0 |
|||||
|
|
At 31 March 2020 |
35.9 |
40.2 |
13.6 |
22.8 |
6.5 |
119.0 |
|||||
|
|
|
|
|
|
|
|
|
|||||
|
|
Accumulated amortisation |
|
|
|
|
|
|
|||||
|
|
At 1 October 2019 |
12.7 |
- |
4.7 |
13.6 |
0.9 |
31.9 |
|||||
|
|
Charge for the year |
1.2 |
- |
2.0 |
1.1 |
0.4 |
4.7 |
|||||
|
|
Disposals |
- |
- |
- |
- |
- |
- |
|||||
|
|
At 31 March 2020 |
13.9 |
- |
6.7 |
14.7 |
1.3 |
36.6 |
|||||
|
|
|
|
|
|
|
|
|
|||||
|
|
Net book amount |
|
|
|
|
|
|
|||||
|
|
At 31 March 2020 |
22.0 |
40.2 |
6.9 |
8.1 |
5.2 |
82.4 |
|||||
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||
|
|
|
Brand |
Goodwill |
Website & development Costs |
Website technology |
Customer relationships |
Total |
|||||
|
|
|
£'m |
£'m |
£'m |
£'m |
£'m |
£'m |
|||||
|
|
Cost |
|
|
|
|
|
|
|||||
|
|
At 1 October 2018 |
35.9 |
39.7 |
6.5 |
22.8 |
6.5 |
111.4 |
|||||
|
|
Additions |
- |
- |
2.3 |
- |
- |
2.3 |
|||||
|
|
At 31 March 2019 |
35.9 |
39.7 |
8.8 |
22.8 |
6.5 |
113.7 |
|||||
|
|
|
|
|
|
|
|
|
|||||
|
|
Accumulated amortisation |
|
|
|
|
|
|
|||||
|
|
At 1 October 2018 |
10.3 |
- |
1.5 |
11.2 |
0.2 |
23.2 |
|||||
|
|
Charge for the year |
1.2 |
- |
1.4 |
1.2 |
0.4 |
4.2 |
|||||
|
|
At 31 March 2019 |
11.5 |
- |
2.9 |
12.4 |
0.6 |
27.4 |
|||||
|
|
|
|
|
|
|
|
|
|||||
|
|
Net book amount |
|
|
|
|
|
|
|||||
|
|
At 31 March 2019 |
24.4 |
39.7 |
5.9 |
10.4 |
5.9 |
86.3 |
|||||
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||
|
|
|
Brand |
Goodwill |
Website & development Costs |
Website technology |
Customer relationships |
Total |
|||||
|
|
|
£'m |
£'m |
£'m |
£'m |
£'m |
£'m |
|||||
|
|
Cost |
|
|
|
|
|
|
|||||
|
|
At 1 October 2018 |
35.9 |
39.7 |
6.5 |
22.8 |
6.5 |
111.4 |
|||||
|
|
Additions |
- |
- |
5.1 |
- |
- |
5.1 |
|||||
|
|
Revaluation |
- |
0.5 |
- |
- |
- |
0.5 |
|||||
|
|
At 30 September 2019 |
35.9 |
40.2 |
11.6 |
22.8 |
6.5 |
117.0 |
|||||
|
|
|
|
|
|
|
|
|
|||||
|
|
Accumulated amortisation |
|
|
|
|
|
|
|||||
|
|
At 1 October 2018 |
10.3 |
- |
1.5 |
11.2 |
0.2 |
23.2 |
|||||
|
|
Charge for the year |
2.4 |
- |
3.2 |
2.4 |
0.7 |
8.7 |
|||||
|
|
At 30 September 2019 |
12.7 |
- |
4.7 |
13.6 |
0.9 |
31.9 |
|||||
|
|
|
|
|
|
|
|
|
|||||
|
|
Net book amount |
|
|
|
|
|
|
|||||
|
|
At 30 September 2019 |
23.2 |
40.2 |
6.9 |
9.2 |
5.6 |
85.1 |
|||||
|
|
|
|
|
|
|
|
|
|||||
|
|
The Group capitalises development projects where they satisfy the requirements for capitalisation in accordance with the IAS 38 and expense projects that relate to ongoing maintenance and support. |
|||||||||||
|
9 |
Tangible assets |
|||||||
|
|
|
|
|
|
|
|||
|
|
Fixed asset additions for the period amounted to £1.1m (6 months the 30 March 2019: £3.4m, Year ended 30 September 2019: £3.3m) |
|||||||
|
|
Disposals in the period amounted to £nil (6 months to March 2019: £nil, 30 September 2019: £nil) |
|||||||
|
|
Depreciation charge of the period amounted to £1.0m (6 months to 30 March 2019: £0.7m, Year ended 30 September 2019: £1.6m) |
|||||||
|
|
|
|
|
|
|
|
|
|
|
10 |
Trade and other receivables |
|
|
|
||||
|
|
|
|
|
|
|
Restated (note 2.6) |
|
Restated (note 2.6) |
|
|
|
|
|
6 months ended 31 March 2020 |
|
6 months ended 31 March 2019 |
|
Year ended 30 September 2019 |
|
|
|
|
|
unaudited |
|
unaudited |
|
Audited |
|
|
Amounts falling due within one year |
|
|
£'m |
|
£'m |
|
£'m |
|
|
|
|
|
|
|
|
|
|
|
|
Trade receivables - net |
|
|
147.9 |
|
164.5 |
|
64.7 |
|
|
Other receivables |
|
|
21.3 |
|
22.3 |
|
28.5 |
|
|
Prepayments |
|
|
2.9 |
|
2.6 |
|
1.4 |
|
|
|
|
|
172.1 |
|
189.4 |
|
94.6 |
|
|
|
|
|
|
|
|
|
|
|
|
For the year end 30 September 2019, other receivables includes £18.5m receivable in respect of chargeback claims following the failure of the Thomas Cook Group on 23 September 2019. |
|||||||
|
|
|
|
|
|
|
|
|
|
|
11 |
Trade, other payables and provisions |
|
||||||
|
|
|
|
|
|
|
Restated (note 2.6) |
|
Restated (note 2.6) |
|
|
|
|
|
6 months ended 31 March 2020 |
|
6 months ended 31 March 2019 |
|
Year ended 30 September 2019 |
|
|
|
|
|
Unaudited |
|
unaudited |
|
Audited |
|
|
Current |
|
|
£'m |
|
£'m |
|
£'m |
|
|
Trade payables |
|
|
181.6 |
|
182.5 |
|
121.6 |
|
|
Accruals |
|
|
14.7 |
|
17.4 |
|
15.0 |
|
|
Lease liabilities |
|
|
4.4 |
|
4.6 |
|
4.5 |
|
|
Contingent consideration |
|
|
- |
|
2.7 |
|
- |
|
|
|
|
|
200.7 |
|
207.2 |
|
141.1 |
|
|
Provision |
|
|
28.6 |
|
- |
|
12.3 |
|
|
|
|
|
229.3 |
|
207.2 |
|
153.4 |
|
|
|
|
|
|
||||
|
|
Provisions For the 6 months ended 31 March 2020, the £28.6m provision is management's estimate of the lost revenue from the anticipated cancellations caused by the COVID-19 pandemic. In determining the provision required, the Directors have assumed that travel recommences in July 2020, but at a much reduced level. On this basis, the Directors have assumed that a significant proportion of bookings for travel in Summer 2020 will not go ahead.
|
|||||||
|
|
For the year ended 30 September 2019, the £12.3m provision is in respect of the Thomas Cook Group failure. The amount recognised was an estimate of the cost the Group would incur to fulfil its obligations to customers under the ATOL regulations to arrange refunds or alternative flights. The Group also recognised an £18.5m debtor recovered through chargeback claims (see note 10). |
|||||||
|
12 |
Trust Account |
|
|
Trust accounts are restricted cash held separately and transferred into cash and accessible by the Group at the point the customer has returned from their holiday. |
|
13 |
Financial instruments |
|
|
|
|
|
|||||||||
|
|
At the balance sheet date, the Group held the following: |
|
|
||||||||||||
|
|
|
|
|
|
6 months ended 31 March 2020 |
6 months ended 31 March 2019 |
Year ended 30 September 2019 |
|
|||||||
|
|
Financial assets |
|
|
Fair Value Level |
£'m |
£'m |
£'m |
|
|||||||
|
|
Derivative financial assets designated as hedging instruments |
|
|
|
|
|
|||||||||
|
|
Forward exchange contracts |
|
|
2 |
4.0 |
- |
- |
|
|||||||
|
|
Financial assets at amortised cost |
|
|
|
|
|
|
|
|||||||
|
|
Trade and other receivables |
|
|
|
169.2 |
186.8 |
93.2 |
|
|||||||
|
|
Trust account |
|
|
|
68.8 |
56.9 |
44.0 |
|
|||||||
|
|
Cash at bank |
|
|
|
17.0 |
8.2 |
54.8 |
|
|||||||
|
|
Total financial assets |
|
|
|
259.0 |
251.9 |
192.0 |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
Financial liabilities |
|
|
|
|
|
|
|
|||||||
|
|
Derivatives designated as hedging instruments |
|
|
|
|
|
|
||||||||
|
|
Forward exchange contracts |
|
|
2 |
- |
(4.0) |
(1.0) |
|
|||||||
|
|
Financial liabilities at fair value through profit or loss |
|
|
|
|
|
|||||||||
|
|
Contingent consideration |
|
|
3 |
- |
(2.7) |
- |
|
|||||||
|
|
Financial liabilities at amortised cost |
|
|
|
|
|
|
|
|||||||
|
|
Trade and other payables |
|
|
|
(200.7) |
(204.5) |
(141.1) |
|
|||||||
|
|
Revolving credit facility |
|
|
|
(30.0) |
(9.5) |
- |
|
|||||||
|
|
Total financial liabilities |
|
|
|
(230.7) |
(220.7) |
(142.1) |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
a) Measurement of fair values |
|
|
|
|
|
|
|
|
|
|
||||
|
|
The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows: |
|
|||||||||||||
|
|
(i) Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities |
|
|
||||||||||||
|
|
(ii) Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices) |
|
|||||||||||||
|
|
(iii) Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs) |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
6 months ended 31 March 2020 |
6 months ended 31 March 2019 |
Year ended 30 September 2019 |
|
|||||||
|
|
|
|
|
|
£'m |
£'m |
£'m |
|
|||||||
|
|
Forward Contracts |
|
|
|
4.0 |
(4.0) |
(1.0) |
|
|||||||
|
|
Contingent consideration |
|
|
|
- |
(2.7) |
- |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
The forward contracts have been fair valued at 31 March 2020 with reference to forward exchange rates that are quoted in an active market, with the resulting value discounted back to present value. |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
b) Financial risk management |
|
|
|
|
|
|
||||||||
|
|
The Group's principal financial liabilities, other than derivatives, comprise revolving credit facility, and trade and other payables. The main purpose of these financial liabilities is to finance the Group's operations. The Group's principal financial assets include trade receivables, and cash at bank that derive directly from its operations. |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
In the course of its business the Group is exposed to market risk (including foreign exchange risk and interest rate risk), credit risk, liquidity risk and technology risk. The Group's overall risk management strategy is to minimise potential adverse effects on the financial performance and net assets of the Group. These policies are set and reviewed by senior finance management and all significant financing transactions are authorised by the Board of Directors. |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
The Group's key financial market risks are in relation to foreign currency rates. The majority of the Group's purchases are sourced from outside the United Kingdom and as such the Group is exposed to the fluctuation in exchange rates (currencies are principally Sterling, US Dollar, Euro and Swedish Krona). The Group places forward cover on the net foreign currency exposure of its purchases. |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
Derivatives are valued using present value calculations. The valuation methods incorporate various inputs including the foreign exchange spot and forward rates, yield curves of the respective currencies and currency basis spreads between the respective currencies. |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
Revolving credit facility - during the period |
|
|
|
|
|
|
||||||||
|
|
During the period the Group extended its revolving credit facility with Lloyds Bank plc to 31 December 2022. |
|
|||||||||||||
|
|
The borrowing limits under the facility will vary monthly to reflect the seasonal borrowing requirements of the Group, ranging from £2.0m in one month to £50.0m in another month. No early prepayment fees are payable. |
|
|||||||||||||
|
|
The interest rate payable is equal to LIBOR plus a margin. The margin contained within the Facility is dependent on net leverage ratio and the rate per annum ranges from 1.40% to 2.20% for the facility or any unpaid sum. |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
The terms of the facility include the following financial covenants: |
|
|||||||||||||
|
|
(i) that the ratio of adjusted EBITDA to net finance charges in respect of any relevant period shall not be less than 5:1; and |
|
|||||||||||||
|
|
(ii) that the ratio of total net debt to adjusted EBITDA in respect of any relevant period shall not exceed 2:1. |
|
|||||||||||||
|
|
The Group operated within these covenants during the period. |
|
|||||||||||||
|
14 |
Related party transactions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
No related party transactions have been entered into during the period. |
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
15 |
Events after the reporting period |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share issue |
|
|
|
|
|
|
|
|
|
|
On 22 May the Group raised £67.3m via a share placing. The Group issued 26,143,500 ordinary shares which is the equivalent of 19.9% of issued share capital, no discount was offered on the value of the shares. |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Refinancing |
|
|
|
|
|
|
|
|
|
|
As announced on 8 April 2020, the Group extended its revolving credit facility with Lloyds Bank plc to 31 December 2023. |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
The borrowing limits under the facility increased to £50.0m with the option to request an increase of up to an additional £10.0m. No early prepayment fees are payable. |
||||||||
|
|
The interest rate payable is equal to LIBOR plus a margin. The margin contained within the Facility is dependent on net leverage ratio and the rate per annum is 3.75% for the facility or any unpaid sum. |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
In addition, on 21 May 2020, the Group secured a revolving credit facility with Lloyds Bank plc pursuant to the Coronavirus Large Business Interruption Loan Scheme (CLBILS) to 21 May 2022.
|
||||||||
|
|
The borrowing limits under the CLBILS facility is £25.0m and include the same financial covenants as the extended revolving credit facility. |
||||||||
|
|
The interest rate payable is equal to the Base Rate plus a margin. The margin contained within the Facility is 2.30% per annum for the facility or any unpaid sum.
Covenant tests have been amended up to and including 30 June 2021 to account for the impact of COVID-19 on the Group's results, tests return to normal from 30 September 2021. |
||||||||
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the interim report in accordance with applicable law and regulations. The Directors confirm that the condensed consolidated interim financial information has been prepared in accordance with International Accounting Standard 34 ('Interim Financial Reporting') as adopted by the European Union.
The interim management report includes a fair review of the information required by the Disclosure and Transparency Rules paragraphs 4.2.7 R and 4.2.8 R, namely:
· an indication of important events that have occurred during the six months ended 31 March 2020 and their impact on the condensed set of financial information, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and
· material related-party transactions during the six months ended 31 March 2020 and any material changes in the related-party transactions described in the Annual report and Accounts 2019.
The Directors of the Company are listed in the Annual Report and Accounts 2019. A list of current Directors is also maintained on the Company's website: http://onthebeachgroupplc.com .
The interim report was approved by the Board of Directors and authorised for issue on 30 June 2020 and signed on its behalf by:
Paul Meehan - CFO
30 June 2020
Glossary
|
APM |
Definition |
Reconciliation to closest GAAP measure |
|
|
|
|
|
|
|
|
|
|
|
Adjusted OTB EBIT |
Adjusted OTB EBIT is based on OTB operating profit before the impact of certain costs / income that derive from events or transactions that fall outside of the normal activities of the Group. This also includes the non-cash cost of the share based payment schemes. These costs / income are excluded by virtue of their size and in order to reflect management's view of the performance of the Segment. |
Adjusted OTB operating profit (£m) |
6 months ended 31 March 2020 |
6 months ended 31 March 2019 |
2019 |
|
OTB Operating (Loss)/Profit |
(31.6) |
13.4 |
21.0 |
||
|
Exceptional costs |
33.8 |
0.5 |
8.2 |
||
|
Share Based Payments |
(1.0) |
0.5 |
0.7 |
||
|
Amortisation of acquired intangibles |
2.2 |
2.3 |
4.5 |
||
|
Adjusted OTB EBIT |
3.4 |
16.7 |
34.4 |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted OTB EBITDA |
Adjusted OTB EBITDA is based on OTB operating profit before depreciation, amortisation and the impact of certain costs / income that derive from events or transactions that fall outside of the normal activities of the Group. This also includes the non-cash cost of the share based payment schemes. These costs / income are excluded by virtue of their size and in order to reflect management's view of the performance of the Segment. |
Adjusted OTB EBITDA (£m) |
6 months ended 31 March 2020 |
6 months ended 31 March 2019 |
2019 |
|
OTB Operating Profit |
(31.6) |
13.4 |
21.0 |
||
|
Exceptional costs |
33.8 |
0.5 |
8.2 |
||
|
Share Based Payments |
(1.0) |
0.5 |
0.7 |
||
|
Depreciation and amortisation |
2.8 |
2.0 |
4.4 |
||
|
Amortisation of acquired intangibles |
2.2 |
2.3 |
4.5 |
||
|
Adjusted OTB EBITDA |
6.2 |
18.7 |
38.8 |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International EBITDA |
International EBITDA is based on International operating profit before depreciation and amortisation. |
International EBITDA (£m) |
6 months ended 31 March 2020 |
6 months ended 31 March 2019 |
2019 |
|
International Operating Profit |
(0.4) |
(0.3) |
(0.7) |
||
|
Depreciation and amortisation |
- |
0.1 |
0.1 |
||
|
International EBITDA |
(0.4) |
(0.2) |
(0.6) |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Classic EBITDA |
Classic EBITDA is based on Classic operating profit before depreciation and amortisation. |
Classic EBITDA (£m) |
6 months ended 31 March 2020 |
6 months ended 31 March 2019 |
2019 |
|
Classic Operating Profit |
(0.9) |
(0.7) |
0.2 |
||
|
Depreciation and amortisation |
0.6 |
0.6 |
1.3 |
||
|
Classic EBITDA |
(0.3) |
(0.1) |
1.5 |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Profit before Tax |
Adjusted Profit before Tax is based on Profit before Tax adjusted for amortisation of acquired intangibles, and the impact of certain costs / income that derive from events or transactions that fall outside of the normal activities of the Group. This also includes the non-cash cost of the share based payment schemes. These costs / income are excluded by virtue of their size and in order to reflect management's view of the performance of the Group. |
Adjusted Profit before Tax (£m) |
6 months ended 31 March 2020 |
6 months ended 31 March 2019 |
2019 |
|
Profit before Tax |
(34.1) |
11.9 |
19.3 |
||
|
Amortisation of acquired intangibles |
2.7 |
2.8 |
5.5 |
||
|
Share Based Payments |
(1.0) |
0.5 |
0.7 |
||
|
Impact of TCG |
- |
- |
7.7 |
||
|
Impact of COVID-19 |
34.7 |
- |
- |
||
|
Exceptional costs |
- |
0.5 |
1.3 |
||
|
Adjusted Profit before Tax |
2.3 |
15.7 |
34.5 |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Profit after Tax |
Adjusted Profit after Tax is based on Profit after Tax adjusted for amortisation of acquired intangibles, and the impact of certain costs / income that derive from events or transactions that fall outside of the normal activities of the Group. This also includes the non-cash cost of the share based payment schemes. These costs / income are excluded by virtue of their size and in order to reflect management's view of the performance of the Group. |
Adjusted Profit after Tax |
6 months ended 31 March 2020 |
6 months ended 31 March 2019 |
2019 |
|
Profit for the period |
(27.7) |
9.6 |
15.6 |
||
|
Share based payments (net of tax) |
(0.8) |
0.4 |
0.6 |
||
|
Impact of TCG (net of tax) |
- |
- |
6.2 |
||
|
Impact of COVID-19 (net of tax) |
28.1 |
- |
|
||
|
Exceptional costs (net of tax) |
- |
0.4 |
1.0 |
||
|
Amortisation of acquired intangibles (net of tax) |
2.2 |
2.1 |
4.5 |
||
|
Adjusted Profit after Tax |
1.8 |
12.5 |
27.9 |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EPS |
Adjusted EPS is calculated on the weighted average number of Ordinary share in issue, using the adjusted profit after tax. |
Adjusted EPS |
6 months ended 31 March 2020 |
6 months ended 31 March 2019 |
2019 |
|
|
Adjusted Profit after Tax |
1.8 |
12.5 |
27.9 |
|
|
|
Basic weighted average number of Ordinary Shares (m) |
131.2 |
131.1 |
131.1 |
|
|
|
Adjusted EPS (p) |
1.4 |
9.5 |
21.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exceptional costs |
Exceptional costs are certain costs / income that derive from events or transactions that fall outside of the normal activities of the Group. These costs / income are excluded from various performance measures by virtue of their size and in order to better reflect management's view of the performance of the Group. |
Exceptional costs (£m) |
6 months ended 31 March 2020 |
6 months ended 31 March 2019 |
2019 |
|
Impact of TCG failure |
- |
- |
7.7 |
||
|
Impact of COVID-19 |
34.7 |
- |
- |
||
|
Other exceptional costs |
- |
0.5 |
1.3 |
||
|
Exceptional costs |
34.7 |
0.5 |
9.0 |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTB revenue after marketing cost |
OTB revenue after marketing cost is revenue after "OTB" online and offline marketing costs. |
OTB revenue after marketing cost (£m) |
6 months ended 31 March 2020 |
6 months ended 31 March 2019 |
2019 |
|
OTB revenue |
5.2 |
44.6 |
83.3 |
||
|
|
|
Exceptional cancellations |
29.2 |
- |
7.0 |
|
|
|
OTB adjusted revenue |
34.4 |
44.6 |
90.3 |
|
|
|
OTB online marketing costs |
(11.7) |
(14.9) |
(29.8) |
|
|
|
OTB off-line marketing costs |
(8.4) |
(4.1) |
(5.4) |
|
|
|
Total OTB marketing |
(20.1) |
(19.0) |
(35.2) |
|
|
|
OTB revenue after marketing costs |
(14.3) |
25.6 |
55.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTB EBITDA as a percentage of revenue |
OTB EBITDA as a percentage of revenue is based on the adjusted OTB EBITDA divided by the revenue generated in the OTB business. |
OTB EBITDA as a percentage of revenue |
6 months ended 31 March 2020 |
6 months ended 31 March 2019 |
2019 |
|
Revenue |
5.2 |
44.6 |
83.3 |
||
|
|
Exceptional cancellations |
29.2 |
- |
7.0 |
|
|
|
|
Adjusted Revenue |
34.4 |
44.6 |
90.3 |
|
|
|
Adjusted OTB EBITDA |
6.2 |
18.7 |
38.8 |
|
|
|
OTB EBITDA as a percentage of revenue |
18.0% |
41.9% |
43.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International revenue after marketing costs |
International revenue after marketing costs is based on International revenue after all marketing costs |
International revenue after marketing costs |
6 months ended 31 March 2020 |
6 months ended 31 March 2019 |
2019 |
|
Revenue |
0.1 |
0.4 |
1.4 |
||
|
Exceptional cancellations |
0.2 |
- |
- |
||
|
|
Adjusted Revenue |
0.3 |
0.4 |
1.4 |
|
|
|
Marketing costs |
(0.3) |
(0.4) |
(1.4) |
|
|
|
International revenue after marketing costs |
- |
- |
- |
|
|
|
|
||||
|
|
|
||||
|
|
|
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