RNS Number:1813A
Excel Airways Group PLC
28 June 2004
For Immediate Release 28 June 2004
EXCEL AIRWAYS GROUP PLC ("EAG")
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 APRIL 2004
EAG, which includes Excel Airways the low cost charter airline marketed on
excelairways.com, announces interim results for the six months ended 30 April
2004.
Key Points
* Turnover increased 69% to #67.4 million (2003: #39.8 million);
* Excel Aviation increased the number of seats sold during Winter 2003/04 by
16%;
* Freedom Flights increased the number of seats sold by 75%;
* excelairways.com increased the number of seats sold online by 250%;
* In line with Group strategy, the core fleet of 737-800 aircraft reduced to
only two units during the traditionally loss making winter period;
* Loss after tax increased to #7.6 million (2003: #6.5 million) primarily
due to an investment of #1.8 million in promoting excelairways.com;
* Special interim dividend declared of 5.2 pence per ordinary share, paid to
shareholders in May 2004;
* Adjusted loss per share 7.91p (2003: 6.80p);
* Successful introduction of a three class, long-haul service to Caribbean
islands of Tobago, Grenada and St Kitts;
* New long haul programme to India to commence in October 2004.
Commenting on prospects, Eamonn Mullaney, Chairman said:
"We believe that in the long term the market for good quality good value leisure
travel will continue to grow and that our investment in our brand and the
development of our web site will position Excel Airways to benefit from this
growth."
For further information, please contact:
Richard Darby/Charlie Howard/Suzanne Brocks
Buchanan Communications 020 7466 5000
Chairman's Statement
Introduction
The Group's strategy of dramatically reducing capacity in the winter in line
with market demand for leisure travel, resulted in our core fleet of 737-800
aircraft being reduced to only two units serving the UK holiday market. In
November 2003, we introduced a three class long haul service to the Caribbean
islands of Tobago, Grenada and St Kitts serving the market requirement for good
value long haul leisure capacity.
Results
The winter is traditionally a loss making period, with the bulk of our business
being undertaken during the summer season.
It is encouraging that turnover increased 69% for the six months ended 30 April
2004 to #67.4m (2003: #39.8m) and is attributable primarily to the introduction
of our long haul service to the Caribbean and the growth in Freedom Flights, our
seat only business. The gross loss as a percentage of turnover reduced from
10.9% in the same period last year to 4.4%.
The after tax winter loss increased by #1.1m to #7.6m after including
expenditure of #1.8 million for the promotion of the excelairways.com website
for the sale of summer seats.
The Board agreed a special interim dividend of 5.2 pence per ordinary share,
which was paid to shareholders in May 2004.
Excel Airways
Five aircraft out of our core fleet of Boeing 737-800 aircraft were leased out
during the winter months to other carriers.
In March we took delivery from Boeing of a new 737-800 taking the core 737-800
fleet to eight aircraft. The Summer 2004 fleet will increase to 18 aircraft,
with additional aircraft leased in from other airlines and flown in full Excel
livery with Excel cabin service.
Whilst the price of aviation fuel has increased dramatically in recent months,
we hedged over 85% of this summer's fuel requirement at rates considerably below
current market rates.
During the period we purchased a new CFM 56-7 spare engine to support our core
fleet and acquired the freehold of a new crew training facility.
Excel Aviation
Excel Aviation, which arranges the sale of all seats flown by Excel Airways and
acts as a seat broker for a number of other airlines to provide capacity for our
tour operator customers, handled higher seat volumes than in the previous winter
period.
The number of seats sold during Winter 2003/04 increased by 16% and Excel
Aviation expects to arrange nearly 20% more seats for the full year than the
previous twelve month period. Following our long haul programme to the
Caribbean, we have sold a second long haul aircraft programme to India
commencing in October 2004.
Freedom Flights
Freedom Flights provides a seat only product through the travel agency network,
mainly on Excel Airways charter flights. With the addition of new sales staff
and an increasing number of travel agency customers, there has been a 75%
increase in the number of seats sold this winter compared to last winter.
Freedom Flights expects to sell a total of 325,000 seats this year.
excelairways.com
Last winter saw the start of the campaign to sell Excel Airways seats direct to
the public through the internet. 250% more seats were sold online during
Winter 2003/04 than during Winter 2002/03 and we expect sales on the website to
more than double for the financial year.
We have increased expenditure in promoting online access via the website during
the winter and expect increased summer sales as a result. We believe there are
ever increasing numbers of people with a seat only requirement to their holiday
destinations and we have invested in systems as well as staff to serve this
demand.
Customer Service
We continue to believe that good customer service including the provision of
in-flight entertainment, free on board meals and seat allocation at check in
creates good value for money for our customers and we aim to develop our
reputation for delivering an excellent service while working with third party
suppliers to reduce costs.
Current Trading Prospects
The reported overcapacity in the market and the volatility in fuel price are
causing concern in the industry, but the Directors believe that following the
completion of the Euro 2004 competition, business activity will improve for our
tour operator customers. We believe that in the long term the market for good
quality good value leisure travel will continue to grow and that our investment
in our brand and the development of our web site will position Excel Airways to
benefit from this growth.
Eamonn Mullaney
Chairman
28 June 2004
EXCEL AIRWAYS GROUP PLC
Unaudited consolidated profit and loss account for the six months ended 30 April
2004
ADVANCE /Y 97.20 Six months Six months Year
Note ended ended ended
30 April 30 April 31 October
2004 2003 2003
#'000 #'000 #'000
Turnover 67,362 39,795 247,312
Cost of sales (70,343) (44,132) (218,956)
Gross (loss)/ profit (2,981) (4,337) 28,356
Distribution costs (3,326) (1,981) (6,530)
Administrative expenses (4,947) (3,114) (8,887)
Operating (loss)/profit before goodwill
amortisation (11,231) (9,423) 12,986
Goodwill amortisation (23) (9) (47)
Operating (loss)/profit (11,254) (9,432) 12,939
Interest receivable and similar income 523 165 492
Interest payable and similar charges (145) (34) (59)
(Loss)/profit on ordinary activities before (10,876) (9,301) 13,372
taxation
Taxation credit/(charge) on (loss)/profit on 2 3,267 2,759 (4,083)
ordinary activities
(Loss)/profit on ordinary activities after (7,609) (6,542) 9,289
taxation
Dividends 3 (4,992) - -
Retained (loss)/profit for the financial period (12,601) (6,542) 9,289
(Loss)/earnings per - basic 4 (7.93p) (6.81p) 9.68p
share
- diluted 4 (7.93p) (6.81p) 9.67p
(Loss)/earnings per share before goodwill
amortisation
- basic 4 (7.91p) (6.80p) 9.72p
- diluted 4 (7.91p) (6.80p) 9.72p
All recognised gains and losses are included in the profit and loss account.
All amounts relate to continuing activities.
EXCEL AIRWAYS GROUP PLC
Unaudited consolidated balance sheet at 30 April 2004
Note As at As at As at
30 April 30 April 31 October
2004 2003 2003
#'000 #'000 #'000
Fixed assets
Intangible assets 367 428 390
Tangible assets 8,075 3,794 3,950
8,442 4,222 4,340
Current assets
Stocks 181 150 150
Debtors - due within one year 21,757 14,696 23,543
- due after more than one year 9,837 3,712 4,059
31,594 18,408 27,602
Cash at bank and in hand 21,032 12,352 16,740
52,807 30,910 44,492
Creditors: amounts falling due
within one year (56,916) (34,152) (31,732)
Net current (liabilities)/assets (4,109) (3,242) 12,760
Total assets less current liabilities 4,333 980 17,100
Creditors: amounts falling due
after more than one year (3,489) (1,207) (1,188)
Provisions for liabilities and charges (811) (510) (818)
(4,300) (1,717) (2,006)
Net assets/(liabilities) 33 (737) 15,094
Capital and reserves
Called up share capital 4,800 4,800 4,800
Merger reserve 1,275 1,275 1,275
Employees' benefit trust share reserve (2,460) - -
Profit and loss account (3,582) (6,812) 9,019
Shareholders' funds/(deficit) - equity 5 33 (737) 15,094
EXCEL AIRWAYS GROUP PLC
Unaudited consolidated cash flow statement for the six months ended 30 April
2004
Note Six Six
months months Year
ended ended ended
30 April 30 April 31 October
2004 2003 2003
#'000 #'000 #'000
Net cash inflow/(outflow) from operating activities 6 11,643 (7,750) (2,276)
Returns on investments and servicing of finance 378 131 433
Taxation (paid) / recovered (3,855) 132 (694)
Capital expenditure (4,585) (430) (927)
Net cash inflow/(outflow) before use of liquid resources
and financing 3,581 (7,917) (3,464)
Management of liquid resources (8,332) 7,984 6,194
Financing 711 (35) (100)
(Decrease)/increase in cash in the period (4,040) 32 2,630
Reconciliation of net cash flow to movement in net funds
Notes Six Six
months months Year
ended ended ended
30 April 30 April 31 October
2004 2003 2003
#'000 #'000 #'000
(Decrease)/increase in cash in the period (4,040) 32 2,630
Cash movement relating to debt and lease financing (3,171) 35 100
Cash outflow/(inflow) from changes in liquid resources 8,332 (7,984) (6,194)
Increase/(decrease) in net funds resulting from cash flows 1,121 (7,917) (3,464)
Inception of finances leases (18) - (8)
Movement in net funds in period 1,103 (7,917) (3,472)
Net funds at beginning of period 15,483 18,955 18,955
Net funds at end of period 7 16,586 11,038 15,483
EXCEL AIRWAYS GROUP PLC
Notes forming part of the interim accounts for the six months ended 30 April
2004
1 Reporting on financial information
The interim financial information does not comprise statutory accounts as
defined in Section 240 of the Companies Act 1985.
The comparatives for the full year ended 31 October 2003 are not the
company's full statutory accounts for that year. A copy of the statutory
accounts for that year has been delivered to the Registrar of Companies.
The auditors' report on those accounts was unqualified and did not contain
a statement under section 237(2) - (3) of the Companies Act 1985.
The interim financial information has been prepared on the basis of the
accounting policies set out in the group accounts for the year ended 31
October 2003. The financial information for the periods ended 30 April 2004
and 2003 is unaudited.
Copies of this interim report are being posted to shareholders and are
available from the Company Secretary at Mitre Court, Fleming Way, Crawley,
West Sussex, RH10 9NJ.
2 Taxation on (loss)/profit from ordinary activities
Six months Six months Year
ended ended ended
30 April 30 April 31 October
2004 2003 2003
#'000 #'000 #'000
Current tax
UK corporation tax on result for the period - - -
Adjustments in respect of prior periods - (1) (1)
Amounts payable for group relief received - - (3,991)
- (1) (3,992)
Deferred tax
Origination and reversal of timing differences 3,267 2,760 (91)
Taxation credit/(charge) on (loss)/profit on ordinary
activities 3,267 2,759 (4,083)
3 Dividends
Six months Six months Year
ended ended ended
30 April 30 April 31 October
2004 2003 2003
#'000 #'000 #'000
Special interim dividend declared of 5.2p per share 4,992 - -
No dividend was paid or proposed for the year ended 31 October 2003.
The above special dividend, which was declared on 23 April 2004, was paid to
shareholders in May 2004.
EXCEL AIRWAYS GROUP PLC
Notes forming part of the interim accounts for the six months ended 30 April
2004 (Continued)
4 (Loss)/earnings per share
The calculation of (loss)/earnings per share for the six months ended 30
April 2004 is based on the loss after taxation of #7,609,000 (30 April
2003: loss of #6,542,000; 31 October 2003: profit of #9,289,000).
The calculation of basic (loss)/earnings per share and diluted (loss)/
earnings per share is based on a weighted average number of shares in issue
during the period.
The basic and diluted loss per share figures for the current period are the
same, as the effect of all potential ordinary shares to be issued is
anti-dilutive.
The weighted average number of shares used in these calculations and the
reconciliation of denominators used for basic and diluted (loss)/earnings
per share calculations are set out in the table below:
Dilutive
effect of
Basic share Diluted
number options number
Period ended 30 April 2004 95,934,066 57,552 95,991,618
Period ended 30 April 2003 96,000,000 43,214 96,043,214
Year ended 31 October 2003 96,000,000 43,214 96,043,214
Additional disclosure is provided below in respect of (loss)/earnings per share,
before amortisation of goodwill, as the directors believe this gives a better
view of ongoing maintainable earnings.
Six months Six months Year
ended ended ended
30 April 30 April 31 October
2004 2003 2003
pence pence pence
Basic (loss)/earnings per share (7.93) (6.81) 9.68
Effect of add back of:
Amortisation of goodwill 0.02 0.01 0.04
Adjusted basic (loss)/earnings per share before
amortisation of goodwill (7.91) (6.80) 9.72
EXCEL AIRWAYS GROUP PLC
Notes forming part of the interim accounts for the six months ended 30 April
2004 (Continued)
5 Reconciliation of movements in shareholders' funds
At At At
30 April 30 April 31 October
2004 2003 2003
#'000 #'000 #'000
(Loss)/profit for the period (7,609) (6,542) 9,289
Dividends (4,992) - -
(12,601) (6,542) 9,289
Cost of shares transferred to employees' benefit trust for
the purpose of future grants of share options to employees (2,460) - -
Opening shareholders' funds 15,094 5,805 5,805
Closing shareholders' funds/(deficit) 33 (737) 15,094
6 Reconciliation of operating (loss)/profit to net cash inflow/(outflow)
from operating activities
Six Six
months months Year
ended ended ended
30 April 30 April 31 October
2004 2003 2003
#'000 #'000 #'000
Operating (loss)/profit (11,254) (9,432) 12,939
Amortisation of goodwill 23 9 47
Depreciation 478 240 587
Decrease/(increase) in debtors 3,124 2,029 (13,875)
Increase in stocks (31) - -
Increase/(decrease) in creditors 19,303 (1,046) (2,655)
Increase in provisions - 450 679
Loss on disposal of fixed assets - - 2
Net cash inflow/(outflow) from operating activities 11,643 (7,750) (2,276)
7 Analysis of net funds
At At
1 November Cash Other non- 30 April
2003 flow cash changes 2004
#'000 #'000 #'000 #'000
Short term bank deposits 12,278 8,332 - 20,610
Cash at bank and in hand 4,462 (4,040) - 422
Overdrafts - - - -
Net cash 4,462 (4,040) - 422
Liquid resources 12,278 8,332 - 20,610
Debt due after one year (1,178) (2,295) - (3,473)
Debt due within one year (58) (883) - (941)
Finance leases (21) 7 (18) (32)
Financing (1,257) (3,171) (18) (4,446)
Total 15,483 1,121 (18) 16,586
EXCEL AIRWAYS GROUP PLC
Independent review report to Excel Airways Group plc
Introduction
We have been instructed by the company to review the financial information for
the six months ended 30 April 2004 on pages 4 to 9. We have read the other
information contained in the interim report and considered whether it contains
any apparent misstatements or material inconsistencies with the financial
information.
Our report is made solely to the company in accordance with the terms of our
engagement to assist the company in meeting the requirements of the rules of the
London Stock Exchange for companies trading securities on the Alternative
Investment Market. Our review has been undertaken so that we might state to the
company those matters we are required to state to it in this report and for no
other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company for our review work, for
this report, or for the conclusions we have reached.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. Where a company
is fully listed, the directors are responsible for preparing the interim report
in accordance with the Listing Rules of the Financial Services Authority, which
require that the accounting policies and presentation applied to the interim
figures should be consistent with those applied in preparing the preceding
annual accounts except where any changes, and the reasons for them, are
disclosed. The directors of Excel Airways Group plc have voluntarily complied
with this requirement in preparing this interim report.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom by auditors
of fully listed companies. A review consists principally of making enquiries of
group management and applying analytical procedures to the financial information
and underlying financial data and, based thereon, assessing whether the
accounting policies and presentation have been consistently applied unless
otherwise disclosed. A review excludes audit procedures such as tests of
controls and verification of assets, liabilities and transactions. It is
substantially less in scope than an audit performed in accordance with United
Kingdom Auditing Standards and therefore provides a lower level of assurance
than an audit. Accordingly we do not express an audit opinion on the financial
statements.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 April 2004.
BDO Stoy Hayward LLP
Chartered Accountants
Epsom, Surrey
28 June 2004
This information is provided by RNS
The company news service from the London Stock Exchange
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