Trading update

 

TIDMWEST 
 
RNS Number : 7622T 
Western & Oriental plc 
04 October 2010 
 

                             Western & Oriental plc 
 
                                 Trading update 
 
Western & Oriental plc (AIM: WEST), the specialist and luxury travel group, 
today announces a trading update following the close of its financial year on 30 
September 2010. 
 
Summary: 
 
- Unprecedented effect of ash cloud means group will be behind market 
expectations at EBITDA level; 
- Negative financial impact of the ash cloud expected to be c. GBP1.8m; 
- Much improved forward order book (GBP21.0m compared with GBP18.5m at 30 
September 2009); 
- Improved trading conditions and EBITDA performance expected in the new 
financial year; 
- Outcome of strategic review to be known before calendar year end. 
 
Trading update 
 
Despite continuing challenging conditions due to a number of external factors 
faced by the business during 2010, such as the ash cloud, airline strikes and 
lengthy political unrest in Thailand, the board is pleased with the overall 
performance of the business. However due to the unprecedented effect on trading 
caused by the ash cloud, the board expects that the group will be behind market 
expectations at EBITDA level for the financial year to 30 September 2010. 
 
Effect of the ash cloud 
 
As announced previously, the group reconfirms that the material effects of the 
volcanic ash disruption in April 2010 will be shown in the September 2010 
results separately. Those effects fall into four main areas, namely: 
 
a.    the costs of repatriating and supporting customers who were overseas 
during the period of the volcanic ash disruption when the skies were closed to 
all commercial aircraft; 
b.    cancelled bookings due to the volcanic ash; 
 
c.     lost sales where customers changed their normal booking patterns for an 
extended period; and 
 
d.    the gross margin reductions brought about by the need to stimulate sales 
and to be competitive under extreme trading conditions. Customers were looking 
for material price reductions in a market which was far more competitive than 
normal. 
 
Management currently estimate that the negative financial impact on the group's 
results relating to the disruption caused by volcanic ash as summarised above 
will be approximately GBP1.8 million. We note that the above effects are 
consistent with announcements made by other public companies concerning the 
effects of the Icelandic problems on the travel sector. 
 
Forward order book 
 
During the first 6 months of the 2010 financial year, booked sales in the Travel 
Division were significantly ahead of expectations, although sales slowed 
significantly in the second half as a result of external factors outlined above. 
That situation is now improving on a weekly basis. We also expect that sales 
will improve as a result of the new unified W&O Travel branding. 
 
Following a slow start to the year, sales within W&O Events have improved across 
a number of sectors, particularly in its specialist pharmaceutical sector. 
 
The group will move into the new financial year with a much improved forward 
order book across both its Divisions. The forward order book amounts to 
approximately GBP21.0 million compared to GBP18.5 million at 30 September 2009, 
a growth of over 13 per cent. year-on-year. 
 
Outlook 
 
Following the difficulties faced in the second half of the year, trading has 
started to return to more normalised levels in the W&O Travel Division, albeit 
that margins have remained under pressure. With an improved economic outlook, 
the W&O Events Division has seen increased confidence in both enquires and 
bookings in recent weeks across all sectors. 
 
Whilst economic recovery must still be viewed with some caution, the group moves 
into the new financial year with a forward order book which is over 13 per cent. 
ahead when compared with 12 months ago and the board is anticipating improved 
trading conditions and EBITDA performance in the next financial year. 
 
Trading conditions during the first 6 months, coupled with the share price 
performance over recent months, has caused the board to conduct a strategic 
review of the group's Travel Division in order to maximise shareholder value. 
The outcome of this review will be known before the end of the calendar year. 
 
 
David Howell 
Chairman 
 
 
 
Enquiries: 
 
+-------------------------------+-------------------------------+ 
| Western & Oriental plc        |                               | 
+-------------------------------+-------------------------------+ 
| David Howell, Chairman        | 020 7821 4078                 | 
+-------------------------------+-------------------------------+ 
|                               |                               | 
+-------------------------------+-------------------------------+ 
| Collins Stewart               |                               | 
+-------------------------------+-------------------------------+ 
| Adrian Hadden                 | 020 7523 8353                 | 
+-------------------------------+-------------------------------+ 
|                               |                               | 
+-------------------------------+-------------------------------+ 
| Walbrook PR                   |                               | 
+-------------------------------+-------------------------------+ 
| Paul McManus                  | 020 7933 8787 or 07980 541    | 
|                               | 893                           | 
+-------------------------------+-------------------------------+ 
|                               | [e-mail]   | 
+-------------------------------+-------------------------------+ 
 
 
About Western & Oriental plc 
Western & Oriental is a specialist luxury travel group with a number of 
established high quality brands. The company was admitted to trading on AIM 
under the ticker symbol WEST in March 2006. The Group acts as a tour operator, 
travel agent and conference and incentive organisers, offering a premium service 
for tailor-made and specialist packaged holiday programmes to destinations 
worldwide. 
 
For more information on Western & Oriental and its individual luxury travel 
brand websites, go to www.westernorientalplc.com. 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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