31 May 2012
Thomas Cook Group plc
Unaudited results for the six months ended 31 March
2012
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Six months ended 31 March 2012
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Six months ended 31 March 2011
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£m (unless otherwise stated)
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Underlying
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Statutory
|
Underlying
|
Statutory
|
|
|
|
|
|
|
|
Revenue
|
3,516.7
|
3,516.7
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3,431.2
|
3,431.2
|
|
Loss from operations[1]
|
(262.7)
|
(643.1)
|
(165.8)
|
(197.9)
|
|
Loss before tax
|
(328.3)
|
(712.9)
|
(232.9)
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(269.4)
|
|
Loss per share (p)
|
(18.1)
|
(68.2)
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(19.6)
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(23.5)
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|
Dividend per share (p)
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-
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-
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3.75
|
3.75
|
|
Net debt
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1,389.9
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1,389.9
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1,094.2
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1,094.2
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[1]Underlying loss from operations is
considered by management to give a fairer view of the year
on year comparison of trading performance and is defined as
earnings before interest and tax, excluding all separately
disclosed items.It also excludes our share of
the results of associates and joint venture and net
investment income.
· The first half has been
difficult, but decisive action has been taken to improve
the Group's position;
o Secured £1.4bn of longer term flexible
funding with no fixed repayments until 31 May 2015;
o Disposal of HCV hotels and aircraft
sale and leaseback, approved by shareholders on 29 May
2012, will add circa £239m of liquidity;
o Agreed disposal of Thomas Cook India,
on 21 May 2012, for gross proceeds of INR 8,174m (circa
£94m) which will reduce debt;
· A sound platform has been
created from which to restore confidence and rebuild
profitability;
o UK turnaround programme making good
progress and underperforming businesses being
addressed;
o An improvement in bookings achieved
since the earlier part of the year;
· Statutory losses of £643m
include £300m of non-cash goodwill impairments as announced
on 12 May 2012;
· New management team
appointed to lead the Group forward and rebuild shareholder
value. Harriet Green appointed as Group CEO, with effect
from 30 July 2012, and Michael Healy appointed as Group
CFO, with effect from 1 July 2012.
"This has been a period of significant change
for the Group. At the beginning of this month we were
delighted to announce the agreement with our banking group
of longer term and more flexible funding. This,
combined with the sale of Thomas Cook India, the sale and
leaseback of some of our aircraft and the disposal of other
non-core assets, provides the Group with a much stronger
financial platform. From this platform, we can re-energise
our business and begin to rebuild profitability, reduce
debt and continue to provide a fantastic holiday experience
for our customers."
Enquiries
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Thomas Cook Group plc
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Louise Bryant
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+44 (0) 20 7557 6413
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Kathryn Rhinds
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+44 (0) 20 7557 6414
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Finsbury
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Faeth Birch
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+44 (0) 20 7251 3801
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Presentation to analysts
A presentation will be held for equity analysts and
shareholders by invitation today at 9am (BST), at Allen &
Overy, One Bishops Square, London E1 6AD.
Dial-in details:
+44 (0) 20 3003 2666
Password:
Thomas Cook
Replay number:
+44 (0) 20 8196 1998
Access number:
1435167
A live web-cast and a copy of the slides will be
available on our website from 8.45am at
www.thomascookgroup.com.
OPERATING REVIEW
The Group has faced a challenging six months. Since
December last year, we have put in place a number of
measures to improve the Group's stability. At the
beginning of this month, we were delighted to announce that
we had reached agreement on longer term and more flexible
funding with our banking group. The disposals of India and
HCV, and the sale and leaseback of aircraft will reduce
debt and provide additional liquidity and headroom. These
actions place the Group on a much firmer footing and
provide a stronger financial platform from which our new
management team can rebuild profitability, re-energise our
business and continue to provide a fantastic holiday
experience for our customers.
The results reflect the continued difficult trading
conditions being experienced in most of the Group's
markets and particularly the impact of MENA on France and
the poor trading in the Canadian mainstream business partly
a result of overcapacity in that market. The acquisitions
of the Co-op and Russia have also added to seasonal losses
in the first half. Following a reorganisation, Central
Europe now includes our Russian and Eastern Europe
businesses.
Revenue and underlying results
Group revenue for the six months to 31 March 2012 was
£3,517m (2011: £3,431m) up 3% (3% on a constant currency
basis). Revenue benefited from the inclusion of
acquisitions, specifically the Russian and Co-op joint
ventures which added £111m, and additional capacity in
Airlines Germany and in Northern Europe, but was offset by
capacity reductions in other segments and weaker trading in
North America and France.
The Group seasonal underlying loss from operations
was £263m, an increase of £97m on the prior year. This
reflects the inclusion of losses from our acquired
businesses in Russia (£10m seasonal loss) and the Co-op in
the UK (£15m seasonal loss). The difficult trading
environment increased losses, in particular the impact of
MENA on the French result (£17m increased loss) and the
poor trading in the North American business (£25m worse
than prior year). Seasonal losses in the UK business are
flat year on year excluding the acquired Co-op seasonal
losses, whilst within Central Europe, our German business
performed well with a 58% reduction in the seasonal
operating loss at constant currency.
The Group's underlying net interest charge for
the period was £67m, an increase of £2m as a result of
higher average debt and increased arrangement fees.
Separately disclosed items
Included within separately disclosed items of £385m
is a £300m charge as a result of a review of the carrying
value of goodwill in our North America, West Europe and
India businesses. Further details are outlined on page 12.
Whilst clearly a substantial sum, the exceptional items are
largely of a non-cash nature. Cash exceptional costs were
£39m (2011: £48m) and largely relate to the reorganisation
and restructuring of our UK, North America and West Europe
businesses and costs in relation to the Group's
financing.
Earnings and dividends
As a result of the greater underlying operating loss
and the separately disclosed items, the Group delivered a
statutory loss before tax of £713m compared with £269m for
the same period last year. The reported loss after tax was
£605m (2011: £201m).
The underlying basic loss per share was 18.1p (2011:
19.6p loss per share) and the basic loss per share was
68.2p (2011: 23.5p).
As previously, announced the Group will not pay any
further dividend this year.
Cash flow and balance sheet
The free cash outflow for the period was £522m, an
increase of £267m on the comparable period last year. This
was driven by the £97m higher seasonal operating loss and a
£215m increase in working capital outflow. The Group's
working capital profile has changed this year, largely as a
result of capacity reductions and we would expect much of
the first half working capital variance to reverse by the
year end. The resulting net debt at 31 March 2012 was
£1,390m (2011: £1,094m) which also reflects the £87m higher
opening net debt position.
Reducing debt and increasing liquidity remains a key
objective for the Group and the agreement of longer term,
more flexible banking arrangements and the recently
announced asset disposals are a major step forward in
achieving this objective.
Strategic Review
As previously announced on 5 May 2012, the Board has
completed its strategic review of the Group, the primary
purpose of which is to provide a stable platform for
recovery and consider further actions to reduce debt. The
outcome of the strategic review is a stabilisation plan
which brings together a range of existing actions and new
initiatives:
· Continuing to
drive the turnaround of our UK business;
· Build on the
solid performance in our Northern Europe and German
businesses;
· Address our
under-performing businesses, particularly in North America,
France and Russia;
· Reducing debt
and improving the resilience of our financing and capital
structure through asset disposals, the sale and leaseback
of aircraft and minimising our financial
commitments;
· Stabilising
our capital structure through the agreement of longer dated
more flexible facilities.
Significant progress has been made since the
beginning of the year and an update on the key highlights
is outlined below:
Turnaround of our UK business
Implementation of the UK turnaround plan is well
underway. Good progress across the initiatives has resulted
in increased confidence in the scale of the benefits. We
now expect over three years to deliver a fully annualised
improvement in profitability of £140m (up from £110m as
previously announced), for a total estimated cost of circa
£70m (up from £60m previously).
Although in the current financial year we expect to
deliver benefits of £60m, these will help to mitigate the
difficult trading environment and the weaker consumer
sentiment towards the Group which we experienced earlier in
the year. As a result of the adverse publicity the Group
received in the UK, we suffered a weakening in brand
sentiment. However, looking forward, we believe we are
taking the right actions to stabilise the business and
provide a more competitive cost base, which with a steady
improvement in brand sentiment will better position the
business for future growth.
The annual improvement in profitability and the
outlay in costs are anticipated to be phased as
follows:
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£m
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FY 12
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FY 13
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FY 14
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Annualised run rate
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Cumulative improvements
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60
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120
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130
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140
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Costs to achieve
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40
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20
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10
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The initial focus of the UK turnaround plan has been
onoptimisingyield, reducing
retail and tour operator discounts, improving the
operational efficiency of
theorganisationand facilitating
faster, more focused decision making. The
following are the key actions taken to date:
1. Optimise the UK airline (£10m improvement)
We reduced the UK fleet by six aircraft during Winter
11/12 as part of right-sizing the UK tour operator
programme, particularly in long-haul, to reduce the risk to
the business. As previously announced, around 300 employees
will have left the business by the end of the financial
year.
2. Refocus the product strategy in mainstream package
holidays (£15m improvement)
Over 500 under-performing hotels have been removed
from the Summer 12 programme (around 22% of properties),
whilst we have introduced around 150 new properties,
focused on differentiation and exclusivity. For Summer 12,
customers choosing differentiated product are up 9%, making
up 31% of overall passengers for the season to date.
Further new properties are being added for Summer 13 as we
continue to evaluate our product offering.
3. Improve yield management (£40m improvement, up
£5m)
A single commercial trading approach across the
mainstream business has been implemented with a coordinated
discounting approach to ensure that distribution channels
are not competing against each other. The improved yield
tools are allowing us to better manage fast selling stock
and delivering better management information. Our revised
discount policy has led to a substantial reduction in
discount levels with retail shops now averaging around 3%
compared to 5% previously. There remain opportunities to
align our product portfolio so that they complement rather
than compete against each other.
4. Rationalise Distribution (£30m improvement in the
JV, up £5m)
The integration within the retail JV continues to
make good progress. Nearly 100 stores have closed since
October 2011 with a further 15 to be closed or sold during
the remainder of the current financial year, resulting in a
headcount reduction as previously announced, of around 850
employees.
Leverage of Thomas Cook's foreign exchange
expertise across the combined retail estate, alongside
improved contractual and commercial terms are driving
substantial commercial benefits which largely account for
the £5m increase in expected benefits.
5. Operational excellence (£45m improvement, up
£20m)
We are currently implementing the majority of
projects identified within the "operational
excellence" category. This process has allowed us to
identify further opportunities, resulting in an increase in
the expected benefits. As we outlined previously,
operational excellence is about reducing and eliminating
operational inefficiencies driven by a siloed structure and
overlapping, manual processes.
Since we announced the programme, we have implemented
a new IT system to better manage yield on seat-only sales
whilst automating processes and focusing on ancillary
sales. Paperless ticketing has been launched during Summer
12 and we have reduced brochures by 20% for the current
financial year with further efficiencies expected in FY13.
We have also announced that we are working with software
provider Anite to implement a new reservation platform in
the UK to drive improved processes and increase the
functionality for our on-line customers. The first phase of
this is expected to be implemented in the first half of
FY13 for departures in FY14.
Building on the solid performances in our Northern
Europe and German businesses
Our businesses in Northern Europe and Germany have
performed well over the last few years, despite difficult
market conditions, and provide a stable base for the Group.
We believe that there is scope for further improvement
through strong leadership and building on market positions,
increasing online distribution and differentiated hotel
products whilst continuing to focus on cost control.
Improving under-performing businesses
As we have previously stated, the performance of our
businesses in North America, Russia and France are
disappointing and we believe that there is substantial
scope to improve the results of these businesses.
The North American mainstream business had a poor
year in 2011 and a very weak Winter 11/12 season. We have
taken action to reduce our flying commitments and manage
our fixed costs and over-capacity. We have exited our
flying arrangements with a third party supplier for the
Winter 12/13 season onwards. Going forward we have an
agreement with WestJet to provide our flying on a flexible
basis, which not only reduces our costs, but also provides
our customers with a greater choice of departure airports.
Further restructuring is ongoing as the new management
reposition the business for the future.
Our Russian business, which was acquired on 12 July
2011, has been impacted by MENA as Egypt is an important
destination. We have implemented management change and put
the business under the Central Europe management team. A
comprehensive restructuring programme focused on costs and
better capacity management is underway and benefits are
already being seen.
In 2011 we changed the management team in our French
business, which has suffered considerably from the impact
of MENA and the weak consumer environment. We are working
on plans to improve the performance and are continuing to
evaluate our options.
Disposals
On 11 May the Group announced that it has agreed the
sale and leaseback of 17 aircraft with agreements in
principle for a further two aircraft. In total we
will receive proceeds of USD 294m (circa £183m) for the 19
aircraft. On 29 May 2012 we received shareholder approval
for the sale and leaseback of 19 aircraft. The proceeds are
to be retained by the Group to provide significant
additional liquidity.
Following shareholder approval for the sale of HCV
hotels, we will complete the disposal of non-core assets
expected to reduce net debt by €94m (circa £75m). On 21 May
we announced the disposal of Thomas Cook India for gross
proceeds of INR 8,174m (circa £94m), the net proceeds of
which will be used to reduce net debt.
Stabilise our capital structure
On the 5 May 2012 we announced a new financing
package extending the maturity of the Group's financing
until 31 May 2015 with no fixed repayments. Under the
agreement the Group retains the proceeds of the sale of HCV
hotels and the aircraft sale and leaseback which has
increased liquidity and along with revised financial
covenants ensure greater financial flexibility.
Current trading
Summer 12
We have been pleased with the recent booking
patterns, particularly given the uncertain economic
environment.
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Year on year variation %
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Average selling price
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Cumulative bookings
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Planned capacity
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UK
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Total
- Specialist &
Independent
-
Mainstream
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-
-
+4
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-1
+10
-8
|
-
-
-12
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Central Europe
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+1
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+1
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Flat
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West Europe
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+4
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-10
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-13
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Northern Europe
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+4
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-6
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-3
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Airlines Germany
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+5
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+4
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+7
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Note: Figures as at 26/27 May 2012. In Central
Europe and West Europe, bookings represent all bookings
including cars/overland, however capacity represents
airline seat capacity only. Northern Europe summer
season is April - September. The statistics reflect the
transfer of the East Europe businesses into Central
Europe.
Overall, UK bookings are only slightly lower than
prior year. Mainstream bookings are down 8%, well ahead of
capacity reductions of 12% and we have 22% less left to
sell compared to prior year. Mainstream average
selling price is stable at +4% but would need to strengthen
further to fully cover cost inflation. Our independent and
specialist businesses continue to perform well, with
bookings up 10%, but whilst consumer demand for the
Olympics packages remains strong, corporate demand has been
much weaker than expected which has impacted
margins.
In Central Europe, our German business is performing
strongly and bookings (+2%) are ahead of planned capacity
(flat), with sustained improvement in the last four weeks
(+4%). Pricing is up 1% and margins remain stable despite
the competition in the market.
Trading in West Europe remains challenging,
particularly in France. Bookings are ahead of capacity
reductions, resulting in less left to sell and in recent
weeks have begun to improve as we have seen uplift in
bookings to Tunisia. Pricing remains stable at +4%.
In Northern Europe, bookings are down 6% after a slow
start to the year, but have continued to improve with
bookings in the last four weeks up 5% and are trending
towards capacity. Pricing is showing an improvement from
the Winter season, and is up 4%.
Bookings are up 4% in Airlines Germany and continue
to improve. Yields are up 5%, partly driven by a
higher share of intercontinental routes and the
introduction of a fuel surcharge which partly mitigates the
increase in fuel prices.
Board and management changes
Following the successful completion of longer term
financing, Paul Hollingworth has decided to step down from
the Board and his role as Group CFO at the end of June
2012. Paul will be replaced by Michael Healy, who
will become Group CFO and join the Board on 1 July 2012.
Michael joined the Group on 14 May 2012 and has been
working closely with Paul to ensure an orderly
handover.
As announced on 24 May 2012, Harriet
Green will succeed Sam Weihagen as Group CEO. Harriet will
join the Group and the Board on 30 July 2012 at which time
Sam Weihagen will step down from the Board. Sam will remain
with the Group until 30 September 2012 to ensure an orderly
handover.
Outlook
We continue to expect this year to be challenging
given the economic backdrop, difficult trading environment
with particularly poor performances in our North American
and French businesses. Whilst our booking position for the
second half has improved trading will be dependent on how
well the Group performs during the important lates
market.
FINANCIAL REVIEW
Financial results and performance review
Group
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£m (unless otherwise stated)
|
Six months ended 31 March 2012
|
Six months ended 31 March 2011
|
Year on year change
|
|
|
|
|
|
|
Revenue
|
3,516.7
|
3,431.2
|
+85.5
|
|
|
|
|
|
|
Underlying loss from
operations[3]
|
(262.7)
|
(165.8)
|
-96.9
|
|
Share of results
of associates & joint venture
|
1.0
|
(1.4)
|
+2.4
|
|
Net investment income/(loss)
|
0.3
|
(1.2)
|
+1.5
|
|
Finance charges
|
(66.9)
|
(64.5)
|
-2.4
|
|
Underlying loss before tax
|
(328.3)
|
(232.9)
|
-95.4
|
|
Separately disclosed items
|
(384.6)
|
(36.5)
|
-348.1
|
|
Loss before tax
|
(712.9)
|
(269.4)
|
-443.5
|
|
|
|
|
|
|
Underlying loss per share (p)
|
(18.1)
|
(19.6)
|
+1.5
|
|
Basic loss per share (p)
|
(68.2)
|
(23.5)
|
-44.7
|
|
Dividend per share (p)
|
-
|
3.75
|
-3.75
|
|
Free cash flow[4]
|
(522.1)
|
(255.2)
|
-266.9
|
|
Net debt
|
1,389.9
|
1,094.2
|
-295.7
|
[3] Underlying loss from
operations is defined as earnings before interest and tax,
and has been adjusted to exclude all separately disclosed
items.It also excludes our share of the
results of associates and joint venture and net investment
income.
[4] Free cash flow includes
cash from operating activities, purchase and proceeds of
disposal of tangible and intangible fixed assets and
interest paid.
Income statement
Revenue and underlying profit from operations
Group revenue for the period increased by 2.5% to
£3,516.7m, (3.1% at constant currency). The increase
reflects the impact of acquisitions, particularly
Intourist, our Russian business and the Co-op in the UK, in
addition to volume growth in the Northern Europe and
Airlines Germany segments, partially offset by the impact
of capacity reductions in the other segments.
The seasonal underlying loss from operations was
£262.7m, an increase of £96.9m on the prior year.
This result includes £29.4m of first time seasonal losses
from operations of the acquired businesses, mainly the
Co-operative businesses in the UK and Intourist. In
addition, we have seen deteriorating trading in some of our
businesses, particularly in France and North America where
results are worse by £41.7m.
Following the previously announced changes in
management structure to transfer our East Europe businesses
into the Central Europe segment, we have revised our
segmental presentation and restated prior year segmental
information to reflect the new structure. The Central
Europe segment now includes the businesses in Poland,
Hungary, the Czech Republic and Russia.
The main drivers of the year on year increase in
underlying loss from operations were:
|
£m
|
|
|
H1 2011 Group underlying loss from
operations
|
(165.8)
|
|
Trading
|
(11.2)
|
|
Increased fuel and accommodation costs
|
(71.3)
|
|
Net impact of acquisitions and disposals
|
(26.9)
|
|
Cost savings
|
21.7
|
|
Inflation, depreciation, exchange translation
and other
|
(9.2)
|
|
H1 2012 Group underlying loss from
operations
|
(262.7)
|
Separately disclosed items
Separately disclosed items consist of exceptional
operating and finance items, IAS 39 fair value
re-measurement, impairment of goodwill and the amortisation
of business combination intangibles. These are costs
or profits that have arisen in the period which management
believes are not the result of normal operating
performance. They are therefore disclosed separately
to give a more comparable view of the year-on-year
underlying trading performance.
The table below summarises the separately disclosed
items, which have been included in the interim
accounts. Further details are provided in note 5 to
the financial information in Appendix
1.
|
£m
|
Six months ended 31 March 2012
|
Six months ended 31 March 2011
|
Year on year reduction / (increase)
|
|
|
|
|
|
|
Affecting profit from operations
|
|
|
|
|
Exceptional operating items
|
(67.3)
|
(37.9)
|
(29.4)
|
|
Gain on pension curtailment
|
-
|
24.5
|
(24.5)
|
|
IAS 39 fair value re-measurement
|
1.4
|
(2.2)
|
3.6
|
|
Amortisation of business combination
intangibles
|
(14.9)
|
(16.5)
|
1.6
|
|
|
(80.8)
|
(32.1)
|
(48.7)
|
|
Impairment of goodwill
|
(299.6)
|
-
|
(299.6)
|
|
|
(380.4)
|
(32.1)
|
(348.3)
|
|
|
|
|
|
|
Affecting net finance costs
|
|
|
|
|
Exceptional finance charges
|
(1.0)
|
-
|
(1.0)
|
|
IAS 39 fair value re-measurement
|
(3.2)
|
(4.4)
|
1.2
|
|
|
(4.2)
|
(4.4)
|
0.2
|
|
|
|
|
|
|
Total
|
(384.6)
|
(36.5)
|
(348.1)
|
Exceptional operating items
Exceptional operating items were £67.3m (2011: £37.9m
excluding gain on pension curtailment). The principal
elements of this charge were reorganisation and
restructuring costs of £37.6m relating to our UK, North
American and West Europe businesses (£27.3m, £5.5m and
£4.8m, respectively), a revised forecast of the cost to
settle a dispute with HM Revenue & Customs over place of
business, £11.8m, and professional and other fees of £14.0m
incurred in relation to the Group's financing.
IAS 39 fair value re-measurement
IAS 39 (as amended) requires the time value element
of options used for hedging the Group's fuel and
foreign currency exposure be written off to the income
statement as incurred. As this is purely a timing
issue but can give rise to significant, unpredictable gains
and losses in the income statement, management has decided
to separately disclose the impact in the income statement
to assist readers of the accounts in better understanding
the underlying business development. For consistency,
we also separately disclose the timing effect within net
finance charges of marking to market the forward points on
our foreign currency hedging. We have therefore
separately disclosed a gain of £1.4m in the operating
result (2011: loss of £2.2m) and a loss of £3.2m in net
finance costs (2011: loss of £4.4m).
Impairment of goodwill and amortisation of business
combination intangibles
As announced on 21 May 2012, we have reached
agreement to sell Thomas Cook India. There was a
formal process for disposal of this business underway at 31
March 2012 so it has been disclosed as held for sale at
that date and recorded at a carrying value no greater than
its fair value less costs to sell. This resulted in
an impairment of goodwill previously recognised in respect
of the business of £96.0m.
Poor trading and subsequent reviews undertaken by new
management in Canada and France have indicated that the
goodwill carried in the North America and West Europe
segments may be impaired. As a consequence, we have
tested the goodwill in these segments for impairment and
have recognised charges of £109.2m in respect of North
America and £94.4m in respect of West Europe.
During the period we incurred non-cash costs of
£14.9m (2011: £16.5m) in relation to the amortisation of
business combination intangibles.
£9.5m of the amortisation relates
to the merger of Thomas Cook and MyTravel and represents
the amortisation of brand names, customer relationships and
computer software. The remaining £5.4m relates to
other acquisitions made post-merger.
Income from associates and joint ventures
Our share of the results of associates and joint
ventures was a profit of £1.0m (2011: loss of £1.4m).
This mainly reflects the disposal of a loss making
business.
Net investment income
The net investment income in the period was £0.3m
(2010: loss of £1.2m). The prior year result
reflected the sale of legacy investments in our German
business.
Net finance costs
Net finance costs (excluding separately disclosed
items) for the six month period were £66.9m (2011: £64.5m)
up £2.4m mainly as a result of higher average borrowing
levels and increased arrangement fees.
Tax
The tax credit for the period was £107.9m (2011:
£68.0m). Excluding the effect of separately disclosed
items, changes in tax rates and the derecognition of a
deferred tax asset, this represents an effective tax rate
of 49% (2011: 28%) on the
underlying loss for the period. Deferred tax assets
of £33.3m relating to the UK have been derecognised
following a revised assessment of the entities in which the
forecast taxable profits are expected to arise and deferred
tax assets of £11.7m relating to France have been
derecognised following the deterioration in trading in that
business and review by new management. In each case
the derecognition reflects the reduced likelihood of
utilising the related taxable losses within an acceptable
time period.
Loss per share and dividends
The underlying basic loss per share was 18.1 pence
(2011: 19.6 pence). The basic loss per share was 68.2
pence (2011: 23.5 pence).
As previously announced, the Group has decided not to
declare any further dividend payments this
year.
Borrowings and liquidity
|
£m
|
Six months ended 31 March 2012
|
Six months ended 31 March 2011
|
Year on year reduction / (increase)
|
|
|
|
|
|
|
|
|
|
|
|
Net cash outflow from operating
activities
|
(449.1)
|
(142.2)
|
(306.9)
|
|
|
|
|
|
|
Capital expenditure (net of disposals)
|
(42.3)
|
(86.8)
|
44.5
|
|
Interest paid
|
(30.7)
|
(26.2)
|
(4.5)
|
|
|
|
|
|
|
Free cash flow
|
(522.1)
|
(255.2)
|
(266.9)
|
|
|
|
|
|
|
Acquisition of businesses
|
32.8
|
2.8
|
30.0
|
|
Disposal of businesses
|
6.9
|
-
|
6.9
|
|
Dividends paid
|
(33.0)
|
(32.0)
|
(1.0)
|
|
Other items (net)
|
0.7
|
1.8
|
(1.1)
|
|
|
|
|
|
|
Net cash outflow
|
(514.7)
|
(282.6)
|
(232.1)
|
The seasonal net cash outflow from operating
activities has increased by £306.9m to £449.1m. This
reflects the increased operating losses for the first six
months together with an increased working capital outflow
resulting from reduced revenue in advance following
capacity reductions and a later booking pattern. The
lower capacity will also result in lower payments for
accommodation and flying costs and as a result, we would
expect to see some claw back in the working capital
position by the year end.
Net capital expenditure for the period was £42.3m
(2011: £86.8m). The reduction of £44.5m reflects
reduced expenditure and the benefit of proceeds from the
disposal of non-core assets including a surplus office
building in the Netherlands and Moranda, a vacant hotel in
Mexico.
The cash inflow from acquisition of businesses
reflects cash acquired, principally with the Co-operative
transaction.
The interim dividend for 2011 was paid on 7 October
2011. The Group subsequently announced the suspension
of dividend payments until the balance sheet has been
rebuilt.
Net debt at 31 March 2012 was £1,389.9m (2011:
£1,094.2m) which comprised £517.7m of cash, £1,835.6m of
borrowings and overdrafts and £72.0m of obligations under
finance leases. Available cash and headroom under the
Group's committed borrowing facilities at 31 March 2012
was £323m.
Hedging
|
|
Summer 12
|
Winter 12/13
|
|
Euro
|
95%
|
73%
|
|
US Dollar
|
87%
|
64%
|
|
Jet Fuel
|
86%
|
37%
|
As at 25 May 2012
PRINCIPAL RISKS & UNCERTAINTIES
The principal risks and uncertainties affecting the
business activities of the Group and mitigating actions
being taken by management were set out on pages 28 to 30,
and more fully described throughout the Directors'
Report, of the Annual Report & Accounts for the year ended
30 September 2011, a copy of which is available on the
Group's corporate website,
www.thomascookgroup.com. The key Group risks were
summarised under the headings of:
Operationaland strategic risks
· downturn in
the global economy and in the economies of our source
markets leading to a reduction in demand for our products
and services;
· fall in demand
for traditional package tours and competition from internet
distributors and low-cost airlines;
· failure to
implement the UK turnaround plan;
· significant
damage to the Group's reputation or brands;
· environmental
concerns;
· a major health
and safety incident;
· loss of, or
difficulty in replacing, senior talent;
· natural
catastrophe including closure of airspace;
· disruption to
information technology systems or infrastructure, premises
or business processes;
· performance
failure by outsourced partners.
Financial risks
· liquidity and
counterparty credit risks;
· extent of
borrowings;
· commodity
risk: fuel, foreign currency, and interest rate
risks;
· breakdown in
internal controls;
· tax
risk;
· pension
liabilities.
Other risks
· security,
political or terrorist risks in key tourist destination
markets;
· legal and
regulatory risks, (in particular relating to licences and
regulations for airlines, package holidays and consumer
protection);
· competition
law and anti-trust.
In the context of the risks arising from a downturn
in the global economy, foreign currency risk and political
risks in key tourist destination markets, the Group
continues to monitor the recent sovereign debt crises in
Greece, Spain and other European countries. In the
view of the Board, the key risks and uncertainties for the
remaining six months of the financial year continue to be
those set out in the above section of the Annual Report &
Accounts 2011.
SEGMENTAL PERFORMANCE REVIEW
Segmental performance presented here is based on
underlying financial performance before separately
disclosed items and the segmental narrative is provided on
this underlying basis.
UK
|
|
Six months ended 31 March 2012
|
Six months ended 31 March 2011
|
Change
|
|
Financial (£m unless otherwise stated)
|
|
|
|
|
Revenue *
|
993.1
|
1,022.5
|
-2.9%
|
|
Underlying loss from operations **
|
(173.6)
|
(158.7)
|
-9.4%
|
|
Underlying operating margin % ***
|
(17.5)%
|
(15.5)%
|
-12.9%
|
|
|
|
|
|
|
Non-financial
|
|
|
|
|
Mass market risk
|
|
|
|
|
Passengers †
|
|
|
-7.9%
|
|
Capacity ††
|
|
|
-8.0%
|
|
Average selling price #
|
|
|
+0.6%
|
|
Load factor †††
|
|
|
-
|
|
Brochure mix ##
|
|
|
-5.4%
|
|
|
|
|
|
|
Controlled distribution ‡‡
|
82.6%
|
71.5%
|
+15.5%
|
|
Internet distribution ‡‡
|
35.3%
|
35.6%
|
-0.8%
|
|
|
|
|
|
See Appendix 2 for key.
Revenue in our UK segment was down £29.4m at £993.1m,
reflecting reduced capacity in our UK mainstream tour
operators and airline, partially offset by growth in
dynamic packages, particularly through our Flexible Trips
business. The Co-op contributed £38.8m of revenue in the
first half.
The seasonal underlying loss from operations grew by
£14.9m to £173.6m due to the additional seasonal losses
from the Co-op of £14.9m. Although we achieved benefits
from cost savings and efficiencies, these were offset by
the impact of lower revenues, fuel price rises and higher
accommodation costs.
Controlled distribution increased to 82.6% following
the merger with the high street travel agency businesses of
The Co-operative Group and the Midlands Co-operative.
The transaction completed on 4 October 2011 and the
additional stores are being integrated with our existing
retail network. As previously announced, a
rationalisation programme is underway to maximise the
efficiency of the combined store portfolio with the main
benefit of the merger expected to be seen in the second
half of the year
Central Europe
|
|
Six months ended 31 March 2012
|
Restated
six months ended 31 March 2011
|
Change
|
|
Financial (£m unless otherwise stated)
|
|
|
|
|
Revenue *
|
881.9
|
774.5
|
+13.9%
|
|
Underlying loss from operations **
|
(20.8)
|
(17.5)
|
-18.9%
|
|
Underlying operating profit margin % ***
|
(2.4)%
|
(2.3)%
|
-4.3%
|
|
|
|
|
|
|
Non-financial
|
|
|
|
|
Mass market
|
|
|
|
|
Passengers †
|
|
|
+7.8%
|
|
|
Flight inclusive
|
|
|
+7.7%
|
|
|
Non-flight inclusive
|
|
|
+7.9%
|
|
Average selling price #
|
|
|
+3.2%
|
|
|
|
|
|
|
Controlled distribution ‡‡
|
23.6%
|
24.0%
|
-1.7%
|
|
Internet distribution ‡‡
|
7.2%
|
7.6%
|
-5.3%
|
|
|
|
|
|
See Appendix 2 for key.
Results for the six months ended 31 March 2011 have
been restated to reflect the transfer of the East Europe
businesses from the former West & East Europe segment to
the Central Europe segment.
Our Central Europe segment now includes the East
Europe businesses in Poland, Hungary, and the Czech
Republic as well as the Russian business, which was
acquired in July 2011. Revenue has increased by
£16.2m on a like-for-like basis (2.9% at constant
currency), driven by increased average selling
prices. The impact of the Russian acquisition added a
further £72.0m to revenue and the specialist German tour
operator, Tour Vital acquired in October 2011 added £19.2m
to revenues.
The underlying loss from operations increased by
£3.3m but this included the initial recognition of seasonal
operating losses of £10.4m from the Russian business,
partly offset by £0.6m profit from operations within Tour
Vital. On a like-for-like basis, the seasonal
underlying loss from operations reduced by £6.5m (35.4% at
constant currency), reflecting a strong performance from
our German operations which also benefitted from improved
margins.
The Central Europe business, as historically reported
(Germany, Austria & Switzerland), including the acquisition
of Tour Vital, reported revenue of £786.2m, an increase of
6.1% at constant currency. The seasonal underlying loss
from operations was £5.8m, a reduction of £8.9m (58.0%
reduction at constant currency) on the prior
year.
Controlled and internet distribution have remained
broadly stable despite the growth in passengers through
acquisition. This reflects the increased conversion of
customers through our in-house distribution
channels.
West Europe
|
|
Six months ended 31 March 2012
|
Restated
six months ended 31 March 2011
|
Change
|
|
Financial (£m unless otherwise stated)
|
|
|
|
|
Revenue *
|
458.0
|
517.7
|
-11.5%
|
|
Underlying loss from operations **
|
(65.6)
|
(34.1)
|
-92.4%
|
|
Underlying operating margin % ***
|
(14.3)%
|
(6.6%)
|
-116.7%
|
|
|
|
|
|
|
Non-financial
|
|
|
|
|
Mass market
|
|
|
|
|
Passengers †
|
|
|
-12.6%
|
|
|
Flight inclusive
|
|
|
-12.2%
|
|
|
Non-flight inclusive
|
|
|
-13.2%
|
|
Average selling price #
|
|
|
+2.0%
|
|
|
|
|
|
|
Controlled distribution ‡‡
|
55.7%
|
58.0%
|
-4.0%
|
|
Internet distribution ‡‡
|
25.0%
|
22.7%
|
+10.1%
|
|
|
|
|
|
See Appendix 2 for key.
Results for the six months ended 31 March 2011 have
been restated to reflect the transfer of the East Europe
businesses from the former West & East Europe segment to
the Central Europe segment.
Revenue in our West Europe segment, which includes
our businesses in France, Belgium and The Netherlands, fell
by £59.7m (10.6% at constant currency). This
reduction reflects the capacity changes implemented as
consumer confidence remains weak and the impact of unrest
in the MENA region persists, particularly in the French
market for which North Africa is an important winter
destination. Losses in our French operation increased by
£16.9m compared to prior year.
Cost reduction programmes have been initiated in all
these markets and whilst they are showing benefits in the
period, further cost improvements are targeted for the
second half of the year.
The reduction in controlled distribution of mass
market products is a result of the disposal of the retail
operation in The Netherlands during the period, which
reported an operating loss of £2.5m in the comparable prior
year period. This disposal reduces overhead costs by
approximately £7.0m for the period.
Northern Europe
|
|
Six months ended 31 March 2012
|
Six months ended 31 March 2011
|
Change
|
|
Financial (£m unless otherwise stated)
|
|
|
|
|
Revenue *
|
586.5
|
539.9
|
+8.6%
|
|
Underlying profit from operations **
|
25.0
|
34.0
|
-26.5%
|
|
Underlying operating margin % ***
|
4.3%
|
6.3%
|
-31.7%
|
|
|
|
|
|
|
Non-financial
|
|
|
|
|
Mass market risk
|
|
|
|
|
Passengers †
|
|
|
+9.5%
|
|
Capacity ††
|
|
|
+9.9%
|
|
Average selling price #
|
|
|
-4.7%
|
|
Load factor †††
|
|
|
-0.2%
|
|
Brochure mix ##
|
|
|
-8.3%
|
|
|
|
|
|
|
Controlled distribution ‡‡
|
85.9%
|
84.0%
|
+2.3%
|
|
Internet distribution ‡‡
|
63.1%
|
58.0%
|
+8.8%
|
|
|
|
|
|
See Appendix 2 for key.
Revenue in Northern Europe grew to £586.5m reflecting
constant currency growth of 9.2% as the business increased
capacity to maintain market share in a competitive
marketplace. Consumer confidence has declined in
these source markets but load factors were maintained
albeit at a lower average selling price as we saw a
reduction in the proportion of full price brochure sales
and a consequent increase in lower margin, late sales.
Results were also affected by weaker demand for Thailand
following flooding during the winter.
Personnel costs rose as a result of increased staff
in the airline following the capacity increase and although
other costs were well controlled, the underlying profit
from operations reduced by £9.0m to £25.0m (down 26.2% at
constant currency).
Controlled distribution and internet distribution
continue to increase, the latter reflecting actions taken
to make online booking for our Independent businesses more
customer friendly.
North America
|
|
Six months ended 31 March 2012
|
Six months ended 31 March 2011
|
Change
|
|
Financial (£m unless otherwise stated)
|
|
|
|
|
Revenue *
|
206.6
|
241.4
|
-14.4%
|
|
Underlying (loss)/profit from operations
**
|
(15.5)
|
9.3
|
n/a
|
|
Underlying operating margin % ***
|
(7.5)%
|
3.9%
|
n/a
|
|
|
|
|
|
|
Non-financial
|
|
|
|
|
Mass market risk
|
|
|
|
|
Passengers †
|
|
|
-16.6%
|
|
Capacity ††
|
|
|
-14.7%
|
|
Average selling price #
|
|
|
-3.0%
|
|
Load factor †††
|
|
|
-2.2%
|
|
Brochure mix ##
|
|
|
+24.1%
|
|
Controlled distribution ‡‡
|
16.5%
|
12.9%
|
+27.9%
|
|
Internet distribution ‡‡
|
31.6%
|
31.5%
|
+0.3%
|
|
|
|
|
|
See Appendix 2 for key.
Note: Internet distribution % includes independent
travel bookings.
Our North America business has underperformed during
the period in the face of difficult market and economic
conditions. Revenue reduced by £34.8m to £206.6m
(down 14.2% in constant currency), reflecting reduced
capacity and lower average selling prices in a very
competitive market place.
The underlying result from operations reduced by
£24.8m. The deterioration in the like-for-like result
was principally margin driven through a combination of fuel
cost increases and higher accommodation costs.
During the period we changed the management of the
business and the new management team has reviewed the
operational approach and taken action to reduce costs and
restructure the operations. The decision was taken in
April to change our flying partner in this market in order
to achieve a more flexible and less risky flying programme.
The business will take smaller seat allocations across a
wider number of departure airports rather than the previous
operation of dedicated aircraft from a few airports and
will increase the frequency of flights on certain key
routes and departure days offering the customer greater
choice and flexibility.
The impact of operating Sears Travel for the full
period has increased the proportion of controlled
distribution to 16.5%.
Airlines Germany
|
|
Six months ended 31 March 2012
|
Six months ended 31 March 2011
|
Change
|
|
Financial (£m unless otherwise stated)
|
|
|
|
|
Revenue - external *
|
390.6
|
335.2
|
+16.5%
|
|
Revenue - internal *
|
115.8
|
119.8
|
-3.3%
|
|
Total revenue *
|
506.4
|
455.0
|
+11.3%
|
|
|
|
|
|
|
Underlying (loss)/profit from operations
**
|
(3.0)
|
12.3
|
n/a
|
|
Underlying operating margin % ***
|
(0.6)%
|
2.7%
|
n/a
|
|
|
|
|
|
|
Non-financial
|
|
|
|
|
Sold seats ‡‡‡
|
|
|
|
|
|
Thomas Cook tour operators
|
|
|
+1.3%
|
|
|
3rd party tour operators
|
|
|
+10.1%
|
|
|
External seat only
|
|
|
+35.2%
|
|
Total sold seats
|
|
|
+15.3%
|
|
|
|
|
|
|
Sold seats ‡‡‡
|
|
|
|
|
|
Europe (excl. Cities)
|
|
|
+17.4%
|
|
|
Long haul
|
|
|
+10.2%
|
|
Total sold seats
|
|
|
+15.3%
|
|
|
|
|
|
|
Capacity ††
|
|
|
+14.2%
|
|
Yield ###
|
|
|
-2.9%
|
|
Seat load factor †††
|
|
|
+0.6%
|
|
|
|
|
|
See Appendix 2 for key.
Revenue has increased £55.4m to £390.6m for the
period (17.7% at constant currency) following the addition
of two long-haul aircraft to the fleet.
The underlying seasonal operating result was reduced
by £15.3m to a loss from operations of £3.0m. This
reflects the reduced margins arising from increased fuel
costs which have not been fully passed on to
customers. For the summer season we have to been more
successful in raising yields to partly mitigate much of the
increase in fuel prices.
Personnel costs and depreciation have increased as a
result of the increased fleet size but this has been
largely offset by operating cost efficiencies.
Corporate
|
Financial (£m)
|
Six months ended 31 March 2012
|
Six months ended 31 March 2011
|
Change
|
|
|
|
|
|
|
Underlying loss from operations **
|
(9.2)
|
(11.1)
|
+17.1%
|
|
|
|
|
|
See Appendix 2 for key.
Costs in the Corporate segment have reduced in the
period principally as a result of lower IT related and
other expenses.
Appendix 1 - Condensed consolidated interim financial
information
Group Income Statement
|
|
|
|
|
|
|
|
Unaudited
|
Unaudited
|
|
|
|
Six months ended 31 March 2012
|
Six months ended 31 March 2011
|
|
|
|
Underlying results
|
Separately disclosed items* (note 5)
|
Total
|
Underlying results
|
Separately disclosed items * (note 5)
|
Totaltal
|
|
|
notes
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Revenue
|
4
|
3,516.7
|
-
|
3,516.7
|
3,431.2
|
-
|
3,431.2
|
|
Cost of providing tourism services
|
|
(2,807.8)
|
0.7
|
(2,807.1)
|
(2,714.2)
|
(3.2)
|
(2,717.4)
|
|
Gross profit
|
|
708.9
|
0.7
|
709.6
|
717.0
|
(3.2)
|
713.8
|
|
|
|
|
|
|
|
|
|
|
Personnel expenses
|
|
(542.1)
|
(24.6)
|
(566.7)
|
(491.2)
|
5.5
|
(485.7)
|
|
Depreciation and amortisation
|
|
(86.2)
|
(0.1)
|
(86.3)
|
(80.3)
|
-
|
(80.3)
|
|
Net operating expenses
|
|
(343.3)
|
(37.1)
|
(380.4)
|
(311.3)
|
(19.3)
|
(330.6)
|
|
(Loss)/profit on disposal of assets
|
5
|
-
|
(4.8)
|
(4.8)
|
-
|
1.4
|
1.4
|
|
Impairment of goodwill and amortisation of
business combination intangibles
|
5
|
-
|
(314.5)
|
(314.5)
|
-
|
(16.5)
|
(16.5)
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
4
|
(262.7)
|
(380.4)
|
(643.1)
|
(165.8)
|
(32.1)
|
(197.9)
|
|
|
|
|
|
|
|
|
|
|
Share of results of associates and joint
venture
|
|
1.0
|
-
|
1.0
|
(1.4)
|
-
|
(1.4)
|
|
Net investment income/(loss)
|
|
0.3
|
-
|
0.3
|
(1.2)
|
-
|
(1.2)
|
|
Finance income
|
6
|
24.2
|
-
|
24.2
|
22.8
|
-
|
22.8
|
|
Finance costs
|
6
|
(91.1)
|
(4.2)
|
(95.3)
|
(87.3)
|
(4.4)
|
(91.7)
|
|
|
|
|
|
|
|
|
|
|
Loss before tax
|
|
(328.3)
|
(384.6)
|
(712.9)
|
(232.9)
|
(36.5)
|
(269.4)
|
|
|
|
|
|
|
|
|
|
|
Tax
|
7
|
|
|
107.9
|
|
|
68.0
|
|
|
|
|
|
|
|
|
|
|
Loss for the period
|
|
|
|
(605.0)
|
|
|
(201.4)
|
|
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
Equity holders of the parent
|
|
|
|
(594.3)
|
|
|
(200.8)
|
|
Non-controlling interests
|
|
|
|
(10.7)
|
|
|
(0.6)
|
|
|
|
|
|
(605.0)
|
|
|
(201.4)
|
|
|
|
|
|
|
|
|
|
|
Loss per share (pence)
|
|
|
|
|
|
|
|
|
Basic and diluted
|
8
|
|
|
(68.2)
|
|
|
(23.5)
|
All revenue and results arose from continuing
operations
The notes on pages 27 to 43 form an integral part of
the condensed consolidated interim financial
information.
* Separately disclosed items consist of
exceptional operating items, IAS 39 fair value
re-measurement, impairment of goodwill and amortisation of
business combination intangibles.
Group Statement of Comprehensive Income
|
|
|
|
|
|
|
|
Unaudited
|
Unaudited
|
|
|
|
Six months ended
|
Six months
ended
|
|
|
|
31/03/12
|
31/03/11
|
|
|
notes
|
£m
|
£m
|
|
|
|
|
|
|
Loss for the period
|
|
(605.0)
|
(201.4)
|
|
|
|
|
|
|
Other comprehensive income and expense
|
|
|
|
|
Foreign exchange translation
(losses)/gains
|
|
(24.0)
|
42.0
|
|
Actuarial (loss)/gain on defined benefit
pension schemes
|
18
|
(46.7)
|
118.7
|
|
Tax recognised on actuarial movements
|
|
9.4
|
(32.9)
|
|
|
|
|
|
|
Fair value gains and losses
|
|
|
|
|
(Losses)/gains deferred for the period
|
|
(57.8)
|
74.7
|
|
Tax on (losses)/gains deferred for the
period
|
|
17.0
|
(20.3)
|
|
Losses transferred to the income
statement
|
|
50.2
|
44.9
|
|
Tax on losses transferred to the income
statement
|
|
(14.0)
|
(12.6)
|
|
|
|
|
|
|
Total comprehensive (expense)/income for the
period
|
|
(670.9)
|
13.1
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
Equity holders of the parent
|
|
(660.2)
|
13.7
|
|
Non-controlling interests
|
|
(10.7)
|
(0.6)
|
|
Total comprehensive (expense)/income for the
period
|
|
(670.9)
|
13.1
|
The notes on pages 27 to 43 form an integral part of
the condensed consolidated interim financial
information.
Group Cash Flow Statement
|
|
|
Unaudited
|
Unaudited
|
|
|
|
Six months ended
|
Six months
ended
|
|
|
|
31/03/12
|
31/03/11
|
|
|
notes
|
£m
|
£m
|
|
Cash flows from operating activities
|
|
|
|
|
Cash generated by operations
|
|
(428.1)
|
(123.2)
|
|
Income taxes paid
|
|
(21.0)
|
(19.0)
|
|
Net cash outflow from operating
activities
|
15
|
(449.1)
|
(142.2)
|
|
|
|
|
|
|
Investing activities
|
|
|
|
|
Proceeds on disposal of subsidiaries
|
|
6.9
|
-
|
|
Proceeds on disposal of property, plant and
equipment
|
|
27.1
|
10.3
|
|
Purchase of subsidiaries (net of cash
acquired)
|
12
|
32.8
|
2.8
|
|
Purchase of tangible and financial
assets
|
|
(50.1)
|
(62.5)
|
|
Purchase of intangible assets
|
|
(19.3)
|
(34.6)
|
|
Sale of non-current financial assets
|
|
0.4
|
2.3
|
|
Additional loan investment
|
|
-
|
(0.6)
|
|
Proceeds on disposal of short-term
securities
|
|
0.3
|
0.1
|
|
Net cash used in investing activities
|
|
(1.9)
|
(82.2)
|
|
|
|
|
|
|
Financing activities
|
|
|
|
|
Interest paid
|
|
(30.7)
|
(26.2)
|
|
Dividends paid
|
9
|
(32.7)
|
(32.0)
|
|
Dividends paid to non-controlling
interests
|
|
(0.3)
|
-
|
|
Draw down of borrowings
|
|
817.4
|
251.3
|
|
Repayment of borrowings
|
|
(122.8)
|
(22.2)
|
|
Payment of facility set-up fees
|
|
(14.9)
|
-
|
|
Repayment of finance lease obligations
|
|
(6.3)
|
(8.1)
|
|
Net cash from financing activities
|
|
609.7
|
162.8
|
|
|
|
|
|
|
Net increase/(decrease) in cash and cash
equivalents
|
|
158.7
|
(61.6)
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of the
period
|
|
341.7
|
316.8
|
|
Effect of foreign exchange rate changes
|
|
(5.4)
|
5.0
|
|
Cash and cash equivalents at end of the
period
|
|
495.0
|
260.2
|
|
|
|
|
|
|
Liquid assets
|
16
|
517.7
|
304.5
|
|
Bank overdrafts
|
16
|
(22.7)
|
(44.3)
|
|
Cash and cash equivalents at end of the
period
|
|
495.0
|
260.2
|
|
|
|
|
|
|
Cash and cash equivalents are presented in the
balance sheet as follows:
|
|
|
|
|
Cash and cash equivalents
|
|
476.8
|
304.5
|
|
Assets held for sale
|
|
40.9
|
-
|
|
Short term borrowings
|
|
(16.7)
|
(44.3)
|
|
Liabilities related to assets held for
sale
|
|
(6.0)
|
-
|
|
|
|
495.0
|
260.2
|
The notes on pages 27 to 43 form an integral part of
the condensed consolidated interim financial
information.
Group Balance Sheet
|
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
|
as at
|
as at
|
as at
|
|
|
|
31/03/12
|
31/03/11
|
30/09/11
|
|
|
notes
|
£m
|
£m
|
£m
|
|
Non-current assets
|
|
|
|
|
|
Intangible assets
|
10
|
3,233.6
|
3,963.0
|
3,550.0
|
|
Property, plant & equipment
|
|
|
|
|
|
|
Aircraft and aircraft spares
|
10
|
614.2
|
654.5
|
638.6
|
|
|
Investment property
|
10
|
-
|
17.4
|
18.0
|
|
|
Other
|
10
|
251.2
|
340.4
|
280.3
|
|
Investment in associates and joint
venture
|
|
22.3
|
37.8
|
22.1
|
|
Other investments
|
|
13.3
|
19.3
|
13.4
|
|
Deferred tax assets
|
|
404.0
|
441.1
|
281.3
|
|
Tax assets
|
|
4.9
|
4.8
|
4.2
|
|
Trade and other receivables
|
|
129.6
|
119.8
|
153.0
|
|
Derivative financial instruments
|
|
-
|
3.4
|
12.6
|
|
|
|
4,673.1
|
5,601.5
|
4,973.5
|
|
Current assets
|
|
|
|
|
|
Inventories
|
|
36.7
|
38.7
|
38.7
|
|
Tax assets
|
|
69.4
|
44.4
|
40.2
|
|
Trade and other receivables
|
|
1,414.4
|
1,301.1
|
1,090.5
|
|
Derivative financial instruments
|
|
79.2
|
191.1
|
117.2
|
|
Cash and cash equivalents
|
16
|
476.8
|
304.5
|
359.3
|
|
|
|
2,076.5
|
1,879.8
|
1,645.9
|
|
Assets held for sale
|
11
|
233.6
|
10.9
|
70.4
|
|
Total assets
|
|
6,983.2
|
7,492.2
|
6,689.8
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
Retirement benefit obligations
|
18
|
(6.4)
|
(6.9)
|
(6.8)
|
|
Trade and other payables
|
|
(1,653.1)
|
(1,611.5)
|
(2,008.2)
|
|
Borrowings
|
13/16
|
(95.6)
|
(422.0)
|
(179.5)
|
|
Obligations under finance leases
|
16
|
(17.9)
|
(14.5)
|
(18.6)
|
|
Tax liabilities
|
|
(103.6)
|
(89.9)
|
(92.7)
|
|
Revenue received in advance
|
|
(1,751.6)
|
(1,773.6)
|
(1,167.2)
|
|
Short-term provisions
|
14
|
(163.1)
|
(155.8)
|
(187.6)
|
|
Derivative financial instruments
|
|
(54.9)
|
(116.9)
|
(88.2)
|
|
|
|
(3,846.2)
|
(4,191.1)
|
(3,748.8)
|
|
Liabilities related to assets held for
sale
|
11
|
(107.8)
|
-
|
(35.0)
|
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
Retirement benefit obligations
|
18
|
(359.9)
|
(266.7)
|
(324.2)
|
|
Trade and other payables
|
|
(104.5)
|
(18.9)
|
(42.4)
|
|
Long-term borrowings
|
13/16
|
(1,695.7)
|
(905.3)
|
(967.8)
|
|
Obligations under finance leases
|
16
|
(53.7)
|
(56.9)
|
(62.1)
|
|
Non-current tax liabilities
|
|
(0.6)
|
-
|
(0.6)
|
|
Revenue received in advance
|
|
(2.3)
|
(1.0)
|
(1.9)
|
|
Deferred tax liabilities
|
|
(119.1)
|
(141.9)
|
(120.9)
|
|
Long-term provisions
|
14
|
(197.2)
|
(204.5)
|
(193.5)
|
|
Derivative financial instruments
|
|
(3.6)
|
(9.4)
|
(9.4)
|
|
|
|
(2,536.6)
|
(1,604.6)
|
(1,722.8)
|
|
Total liabilities
|
|
(6,490.6)
|
(5,795.7)
|
(5,506.6)
|
|
Net assets
|
|
492.6
|
1,696.5
|
1,183.2
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Called-up share capital
|
|
59.2
|
57.7
|
59.2
|
|
Share premium account
|
|
29.2
|
8.9
|
29.2
|
|
Merger reserve
|
|
1,617.8
|
1,984.2
|
1,617.8
|
|
Hedging and translation reserves
|
|
288.3
|
428.2
|
316.9
|
|
Capital redemption reserve
|
|
8.5
|
8.5
|
8.5
|
|
Retained earnings deficit
|
|
(1,558.8)
|
(800.0)
|
(871.4)
|
|
Investment in own shares
|
|
(13.4)
|
(13.3)
|
(13.3)
|
|
Equity attributable to equity holders of the
parent
|
|
430.8
|
1,674.2
|
1,146.9
|
|
Non-controlling interests
|
|
61.8
|
22.3
|
36.3
|
|
Total equity
|
|
492.6
|
1,696.5
|
1,183.2
|
The notes on pages 27 to 43 form an integral part of
the condensed consolidated interim financial
information.
Group Statement of Changes in Equity
The unaudited movements in equity for
the six months ended 31 March 2012 were as follows:
|
|
|
|
|
|
|
|
|
|
|
Share
|
|
|
|
Attributable
|
|
|
|
|
capital
|
|
Hedging &
|
Retained
|
to equity
|
Non-
|
|
|
|
& share
|
Other
|
translation
|
earnings/
|
holders of
|
controlling
|
|
|
|
premium
|
reserves
|
reserve
|
(deficit)
|
the parent
|
interests
|
Total
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Opening balance at
|
|
|
|
|
|
|
|
|
1 October 2011
|
88.4
|
1,613.0
|
316.9
|
(871.4)
|
1,146.9
|
36.3
|
1,183.2
|
|
|
|
|
|
|
|
|
|
|
Loss for the period
|
-
|
-
|
-
|
(594.3)
|
(594.3)
|
(10.7)
|
(605.0)
|
|
Other comprehensive income/(expense):
|
|
|
|
|
|
|
|
|
Foreign exchange translation losses
|
-
|
-
|
(24.0)
|
-
|
(24.0)
|
-
|
(24.0)
|
|
Actuarial loss on defined benefit pension
schemes (net of tax)
|
-
|
-
|
-
|
(37.3)
|
(37.3)
|
-
|
(37.3)
|
|
Fair value gains and losses:
|
|
|
|
|
|
|
|
|
Losses deferred for the period
(net of tax)
|
-
|
-
|
(40.8)
|
-
|
(40.8)
|
-
|
(40.8)
|
|
Losses transferred to the income statement (net
of tax)
|
-
|
-
|
36.2
|
-
|
36.2
|
-
|
36.2
|
|
Total comprehensive expense
for the period
|
-
|
-
|
(28.6)
|
(631.6)
|
(660.2)
|
(10.7)
|
(670.9)
|
|
Equity credit in respect of share- based
payments
|
-
|
-
|
-
|
1.1
|
1.1
|
-
|
1.1
|
|
Purchase of own shares (BAYE)
|
-
|
(0.1)
|
-
|
-
|
(0.1)
|
-
|
(0.1)
|
|
Acquisition of Co-op
|
-
|
-
|
-
|
(56.9)
|
(56.9)
|
36.8
|
(20.1)
|
|
Exchange difference on
non-controlling interests
|
-
|
-
|
-
|
-
|
-
|
(0.6)
|
(0.6)
|
|
At 31 March 2012
|
88.4
|
1,612.9
|
288.3
|
(1,558.8)
|
430.8
|
61.8
|
492.6
|
The unaudited movements in equity for the six months
ended 31 March 2011 were as follows:
|
|
|
|
|
|
|
|
|
|
|
Share
|
|
|
|
Attributable
|
|
|
|
|
capital
|
|
Hedging &
|
Retained
|
to equity
|
Non-
|
|
|
|
& share
|
Other
|
translation
|
earnings/
|
holders of
|
controlling
|
|
|
|
premium
|
reserves
|
reserve
|
(deficit)
|
the parent
|
interests
|
Total
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Opening balance at
|
|
|
|
|
|
|
|
|
1 October 2010
|
66.6
|
1,979.4
|
299.5
|
(626.9)
|
1,718.6
|
24.1
|
1,742.7
|
|
|
|
|
|
|
|
|
|
|
Loss for the period
|
-
|
-
|
-
|
(200.8)
|
(200.8)
|
(0.6)
|
(201.4)
|
|
Other comprehensive income/(expense):
|
|
|
|
|
|
|
|
|
Foreign exchange translation gains
|
-
|
-
|
42.0
|
-
|
42.0
|
-
|
42.0
|
|
Actuarial gain on defined benefit pension
schemes (net of tax)
|
-
|
-
|
-
|
85.8
|
85.8
|
-
|
85.8
|
|
Fair value gains and losses:
|
|
|
|
|
|
|
|
|
Gains deferred for the period
(net of tax)
|
-
|
-
|
54.4
|
-
|
54.4
|
-
|
54.4
|
|
Losses transferred to the income statement (net
of tax)
|
-
|
-
|
32.3
|
-
|
32.3
|
-
|
32.3
|
|
Total comprehensive income/
(expense) for the period
|
-
|
-
|
128.7
|
(115.0)
|
13.7
|
(0.6)
|
13.1
|
|
Equity debit in respect of
share-based payments
|
-
|
-
|
-
|
(0.4)
|
(0.4)
|
-
|
(0.4)
|
|
Derecognition of non-controlling
interest
|
-
|
-
|
-
|
2.1
|
2.1
|
(2.6)
|
(0.5)
|
|
Exchange difference on non-controlling
interests
|
-
|
-
|
-
|
-
|
-
|
1.4
|
1.4
|
|
Dividends
|
-
|
-
|
-
|
(59.8)
|
(59.8)
|
-
|
(59.8)
|
|
At 31 March 2011
|
66.6
|
1,979.4
|
428.2
|
(800.0)
|
1,674.2
|
22.3
|
1,696.5
|
Notes to the Financial Information
1. General information and
basis of preparation
Thomas Cook Group plc is a limited liability company
incorporated and domiciled in England and Wales under the
Companies Act 2006 and listed on the London Stock Exchange.
The address of the registered office is 6th Floor South,
Brettenham House, Lancaster Place, London, WC2E 7EN. The
principal activities of the Group are discussed in the
interim management report on pages 1 to 21.
This condensed consolidated interim financial
information was approved for issue on 30 May 2012.
This condensed consolidated interim financial
information does not comprise statutory accounts within the
meaning of Section 434 of the Companies Act 2006. Statutory
accounts for the year ended 30 September 2011 were approved
by the Board of Directors on 13 December 2011 and delivered
to the Registrar of Companies. The report of the auditors
on those accounts was unqualified, did not contain an
emphasis of matter paragraph and did not contain any
statement under Section 498 of the Companies Act
2006.
This condensed consolidated interim financial
information has been reviewed, not audited.
2. Basis for
preparation
This condensed consolidated financial information for
the six months ended 31 March 2012 has been prepared in
accordance with the Disclosure and Transparency Rules of
the Financial Services Authority and with IAS 34
"Interim financial reporting" as adopted by the
European Union. The half-yearly condensed consolidated
financial report should be read in conjunction with the
annual financial statements for the year ended 30 September
2011, which have been prepared in accordance with IFRSs as
adopted by the European Union.
After making appropriate enquiries, the Directors
have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the
foreseeable future. For this reason, they continue to adopt
the going concern basis in preparing the condensed
consolidated financial information.
3. Accounting Policies
The accounting policies adopted are consistent with
those of the annual financial statements for the year ended
30 September 2011, as described in those annual financial
statements, except for the policy with respect to the
presentation of impairment of goodwill, the new or amended
standards and interpretations adopted in the current period
and other changes noted below.
Impairment of goodwill is now presented with
amortisation of business combination intangibles as a
separate category on the face of the income
statement.
Adoption of new or amended standards and
interpretations in the current period
In the current period, the following new or amended
standards and interpretations have been adopted. Their
adoption has not had a significant impact on the amounts
reported or the disclosure and presentation in these
interim financial statements, but may impact the accounting
or the disclosure and presentation for future transactions
and arrangements.
|
IAS 24 Amendment
|
"Related parties" is effective for
annual reporting periods commencing on or after 1
January 2011. The amendment clarifies the definition
of related parties.
|
|
IFRIC 14
Amendment
|
"Prepayments of a minimum funding
requirement" is effective for annual reporting
periods commencing on or after 1 January 2011. The
amendment remedies one of the consequences of IFRIC
14, whereby an entity under certain circumstances was
not allowed to recognise an asset for the prepayment
of a minimum funding requirement.
|
In addition, the Group has adopted the various
amendments to International Financial Reporting Standards
and the related Bases for Conclusions and guidance made in
the International Accounting Board's annual improvement
process. The relevant IFRSs subject to Annual
Improvements 2010 and applicable to the Group
include:
IFRS
3
Business Combinations
IFRS
7
Financial Instruments:Disclosure
IAS
1
Presentation of Financial Statements
IAS
27
Consolidated and Separate Financial Statements
IAS
34
Interim Financial Reporting
3. Accounting policies (continued)
New or amended standards and interpretations in issue
but not yet effective
The following new standards, amendments to standards
and interpretations that are expected to apply to the
Group, which have not been applied in these financial
statements, were in issue, but are not yet
effective:
|
IFRS 9
|
"Financial Instruments" is effective
for annual reporting periods commencing on or after 1
January 2015. The standard will eventually replace
IAS 39 but currently only details the requirements
for recognition and measurement of financial assets
and financial liabilities.
|
Management does not anticipate that the adoption of
these new or amended standards and interpretations will
have a material impact on the Group.
4. Segmental information
For management purposes, the Group is currently
organised into six geographic operating divisions: UK,
Central Europe, West Europe, Northern Europe, North America
and Airlines Germany. These divisions are the basis on
which the Group reports its primary segment
information. Certain residual businesses and
corporate functions are not allocated to these divisions
and are shown separately as Corporate.
These reportable segments are consistent with the
presentation of information to the Group Chief Executive
(chief operating decision maker) for the purpose of
resource allocation and assessment of performance.
Following changes in management structure to transfer
our East Europe businesses from the former West & East
segment to the Central Europe segment, we have revised our
segmental presentation and restated prior year segmental
information to reflect the new structure. The Central
Europe segment now includes the businesses in Poland,
Hungary, the Czech Republic and Russia.
The primary business of all these operating divisions
is the provision of leisure travel services and,
accordingly, no separate secondary segmental information is
provided.
Segmental information for these divisions is
presented below.
|
Unaudited six months ended 31 March 2012
|
|
|
|
|
|
|
|
|
|
Central
|
West
|
Northern
|
North
|
Airlines
|
|
|
|
|
UK
|
Europe
|
Europe
|
Europe
|
America
|
Germany
|
Corporate
|
Total
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
Segment sales
|
1,016.9
|
897.2
|
460.1
|
589.4
|
206.6
|
506.4
|
-
|
3,676.6
|
|
Inter-segment sales
|
(23.8)
|
(15.3)
|
(2.1)
|
(2.9)
|
-
|
(115.8)
|
-
|
(159.9)
|
|
Total revenue
|
993.1
|
881.9
|
458.0
|
586.5
|
206.6
|
390.6
|
-
|
3,516.7
|
|
|
|
|
|
|
|
|
|
|
|
Result
|
|
|
|
|
|
|
|
|
|
Underlying (loss)/profit from operations
|
(173.6)
|
(20.8)
|
(65.6)
|
25.0
|
(15.5)
|
(3.0)
|
(9.2)
|
(262.7)
|
|
Exceptional operating items
|
(39.2)
|
(3.7)
|
(5.5)
|
(0.1)
|
(5.3)
|
(0.2)
|
(13.3)
|
(67.3)
|
|
IAS 39 fair value
re-measurement
|
(0.7)
|
-
|
(1.4)
|
0.8
|
-
|
2.7
|
-
|
1.4
|
|
Impairment of goodwill and amortisation of
business combination intangibles
|
(100.5)
|
(1.2)
|
(94.4)
|
(8.8)
|
(109.6)
|
-
|
-
|
(314.5)
|
|
Segment result
|
(314.0)
|
(25.7)
|
(166.9)
|
16.9
|
(130.4)
|
(0.5)
|
(22.5)
|
(643.1)
|
|
|
|
|
|
|
|
|
|
|
|
Share of results of associates and joint
venture
|
|
|
|
|
|
1.0
|
|
Net investment income
|
|
|
|
|
|
|
|
0.3
|
|
Finance income
|
|
|
|
|
|
|
|
24.2
|
|
Finance costs
|
|
|
|
|
|
|
|
(95.3)
|
|
Loss before tax
|
|
|
|
|
|
|
|
(712.9)
|
|
Tax
|
|
|
|
|
|
|
|
107.9
|
|
Loss for the period
|
|
|
|
|
|
|
|
(605.0)
|
|
|
|
|
|
|
|
|
|
|
|
Balance sheet assets
|
|
|
|
|
|
|
|
|
|
Segment assets
|
3,448.6
|
797.2
|
1,445.3
|
1,925.2
|
241.1
|
881.8
|
7,133.3
|
15,872.5
|
|
Inter-segment eliminations
|
|
|
|
|
|
|
|
(9,389.9)
|
|
|
|
|
|
|
|
|
|
6,482.6
|
Inter-segment sales are charged at prevailing market
prices. Segment assets consist primarily of goodwill,
other intangible assets, property, plant and equipment,
trade and other receivables and cash and cash
equivalents. Non-current assets held for sale are
also shown within segment assets.
4.Segmental information
(continued)
|
Unaudited six months ended 31 March 2011
|
|
|
|
|
|
|
|
|
UK
|
Restated
Central
Europe
|
Restated
West
Europe
|
Northern
Europe
|
North
America
|
Airlines
Germany
|
Corporate
|
Total
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
Segment sales
|
1,034.3
|
787.8
|
520.9
|
542.4
|
241.4
|
455.0
|
-
|
3,581.8
|
|
Inter-segment sales
|
(11.8)
|
(13.3)
|
(3.2)
|
(2.5)
|
-
|
(119.8)
|
-
|
(150.6)
|
|
Total revenue
|
1,022.5
|
774.5
|
517.7
|
539.9
|
241.4
|
335.2
|
-
|
3,431.2
|
|
|
|
|
|
|
|
|
|
|
|
Result
|
|
|
|
|
|
|
|
|
|
Underlying (loss)/profit from operations
|
(158.7)
|
(17.5)
|
(34.1)
|
34.0
|
9.3
|
12.3
|
(11.1)
|
(165.8)
|
|
Exceptional operating items
|
0.2
|
(0.9)
|
(7.6)
|
0.1
|
(3.3)
|
-
|
(1.9)
|
(13.4)
|
|
IAS 39 fair value
re-measurement
|
1.2
|
-
|
1.5
|
(0.1)
|
-
|
(4.8)
|
-
|
(2.2)
|
|
Impairment of goodwill and amortisation of
business combination intangibles
|
(4.7)
|
(0.5)
|
(0.2)
|
(10.8)
|
(0.3)
|
-
|
-
|
(16.5)
|
|
Segment result
|
(162.0)
|
(18.9)
|
(40.4)
|
23.2
|
5.7
|
7.5
|
(13.0)
|
(197.9)
|
|
|
|
|
|
|
|
|
|
|
|
Share of results of associates and joint
venture
|
|
|
|
|
|
(1.4)
|
|
Net investment loss
|
|
|
|
|
|
|
|
(1.2)
|
|
Finance income
|
|
|
|
|
|
|
|
22.8
|
|
Finance costs
|
|
|
|
|
|
|
|
(91.7)
|
|
Loss before tax
|
|
|
|
|
|
|
|
(269.4)
|
|
Tax
|
|
|
|
|
|
|
|
68.0
|
|
Loss for the period
|
|
|
|
|
|
|
|
(201.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5. Separately disclosed items
|
|
Unaudited
|
Unaudited
|
|
|
six months ended 31/03/12
£m
|
six months
ended 31/03/11
£m
|
|
Exceptional operating items
|
|
|
|
Property costs, redundancy and other costs
incurred in business integrations and
reorganisations
|
(31.0)
|
(29.8)
|
|
Costs associated with refinancing
|
(14.0)
|
-
|
|
Provision for HMRC settlement
|
(11.8)
|
-
|
|
Aircraft-related separately disclosed
items
|
(2.9)
|
(6.0)
|
|
(Loss)/profit on disposal of assets
|
(4.8)
|
1.4
|
|
Other separately disclosed operating
items
|
(2.8)
|
(3.5)
|
|
Net gain on pension plan curtailment
|
-
|
24.5
|
|
Total exceptional operating items
|
(67.3)
|
(13.4)
|
|
|
|
|
|
Exceptional finance costs
|
|
|
|
Interest on provision for HMRC
settlement
|
(1.0)
|
-
|
|
|
(1.0)
|
-
|
|
Total exceptional items
|
(68.3)
|
(13.4)
|
|
|
|
|
|
IAS 39 fair value re-measurement
|
|
|
|
Time value component of option contracts
|
1.4
|
(2.2)
|
|
Included within cost of providing tourism
services
|
1.4
|
(2.2)
|
|
|
|
|
|
Forward points on foreign exchange cash flow
hedging contracts
|
(3.2)
|
(4.4)
|
|
Included within finance income and costs
|
(3.2)
|
(4.4)
|
|
|
|
|
|
Amortisation of business combination
intangibles
|
(14.9)
|
(16.5)
|
|
Impairment of goodwill
|
(299.6)
|
-
|
|
Impairment of goodwill and
amortisation of business combination
intangibles
|
(314.5)
|
(16.5)
|
|
|
|
|
|
Total separately disclosed items
|
(384.6)
|
(36.5)
|
|
|
Unaudited
|
Unaudited
|
|
Exceptional operating items have been included
in the income statement as follows:
|
six months ended 31 March 2012
£m
|
six months
ended 31 March 2011
£m
|
|
|
|
|
|
Cost of providing tourism services
|
(0.7)
|
(1.0)
|
|
Personnel expenses
|
(24.6)
|
5.5
|
|
Depreciation and amortisation
|
(0.1)
|
-
|
|
Net operating expenses
|
(37.1)
|
(19.3)
|
|
(Loss)/profit on disposal of assets
|
(4.8)
|
1.4
|
|
|
(67.3)
|
(13.4)
|
6. Finance income and costs
|
|
|
Unaudited
|
Unaudited
|
|
|
notes
|
six months ended 31 March 2012
£m
|
six months
ended 31 March 2011
£m
|
|
Finance income
|
|
|
|
|
Income from loans included in financial
assets
|
|
0.2
|
0.2
|
|
Other interest and similar income
|
|
3.3
|
1.5
|
|
Fair value gains on derivative financial
instruments
|
|
-
|
0.2
|
|
Expected return on pension plan assets
|
18
|
20.7
|
20.9
|
|
|
|
24.2
|
22.8
|
|
|
|
|
|
|
Finance costs
|
|
|
|
|
Interest payable
|
|
(58.6)
|
(52.7)
|
|
Finance costs in respect of finance
leases
|
|
(3.0)
|
(2.7)
|
|
Interest cost on pension plan
liabilities
|
18
|
(27.5)
|
(27.6)
|
|
Discounting of provisions and other non-current
liabilities
|
|
(2.0)
|
(4.3)
|
|
|
|
(91.1)
|
(87.3)
|
|
|
|
|
|
|
IAS 39 fair value re-measurement
|
|
|
|
|
Forward points on foreign exchange
cash flow hedging contracts
|
|
(3.2)
|
(4.4)
|
|
|
|
|
|
|
Exceptional finance costs
|
|
|
|
|
Interest cost on provision for HMRC
settlement
|
|
(1.0)
|
-
|
7. Income taxes
Income tax is recognised based on management's
best estimate of the weighted average annual income tax
rate expected for the full financial period, excluding the
effect of adjustments to tax provisions made in respect of
exceptional items, impairment of goodwill and amortisation
of business combination intangibles. The estimated average
tax rate used for the six months to 31 March 2012 is 49%
(the tax rate used for the six months to 31 March 2011 was
28%).
The 2012 Budget Statement announced a reduction in
the main rate of corporation tax in the UK from 26% to 24%
with effect from 1 April 2012, which has been substantively
enacted. This reduction is in addition to the
decrease to 25% enacted in the Finance Act 2011. The
effect of the change in rate from 25% to 24% has been to
reduce the Group's deferred tax assets by £3.7m.
The Budget also proposes to reduce the main rate of
corporation tax by 1% per year to 22% by 1 April
2014. The overall effect of the further changes from
24% to 22%, if applied to the deferred tax balance at 30
September 2011, would be to reduce the deferred tax asset
by approximately £8.0m.
8. Loss per share
The calculations for loss per share, based on the
weighted average number of shares, are shown in the table
below. The weighted average number of shares shown
excludes 3.8m shares held by the employee share ownership
trusts (2011: 3.8m).
|
|
|
|
|
|
Unaudited six months ended 31 March 2012
|
Unaudited six months ended 31 March 2011
|
|
|
|
|
|
Basic and diluted loss per share
|
£m
|
£m
|
|
Net loss attributable to equity holders of the
parent
|
(594.3)
|
(200.8)
|
|
|
|
|
|
|
millions
|
millions
|
|
Weighted average number of shares for basic and
diluted loss per share
|
871.1
|
854.5
|
|
|
|
|
|
|
pence
|
pence
|
|
Basic and diluted loss per share
|
(68.2)
|
(23.5)
|
|
|
|
|
|
|
|
|
|
|
Unaudited six months ended 31 March 2012
|
Unaudited six months ended 31 March 2011
|
|
|
|
|
|
Underlying basic and diluted loss per
share
|
£m
|
£m
|
|
Underlying net loss attributable to equity
holders of the parent *
|
(157.4)
|
(167.1)
|
|
|
|
|
|
|
millions
|
millions
|
|
Weighted average number of shares for basic and
diluted loss per share
|
871.1
|
854.5
|
|
|
|
|
|
|
pence
|
pence
|
|
Underlying and diluted earnings per
share
|
(18.1)
|
(19.6)
|
*Underlying net loss attributable to equity holders
of the parent is derived from the pre exceptional loss
before tax for the six months ended 31 March 2012 of
£328.3m (2011: £232.9m) and adding a notional tax credit of
£160.2m (2011: £65.2m).
In accordance with IAS 33: Earnings per share, the
calculation of basic and underlying diluted loss per share
has not included items that are anti-dilutive.
Therefore there is no difference between the calculation of
basic and diluted loss per share.
9. Dividends
The interim dividend for 2011 of £32.7m was paid to
shareholders on 7 October 2011.
On 29 September 2011, the directors announced that
further dividends would not be proposed whilst the Group
rebuilds its balance sheet.
10. Reconciliation of tangible and intangible
assets
|
Six months ended 31 March 2012
|
Unaudited tangible and intangible assets
£m
|
|
|
|
|
Opening net book amount at 1 October
2011
|
4,486.9
|
|
Additions
|
64.2
|
|
Acquisition of subsidiaries (note 12)
|
123.8
|
|
Disposals
|
(33.8)
|
|
Impairment charge
|
(299.6)
|
|
Transfer to assets held for sale (note
11)
|
(79.4)
|
|
Depreciation and amortisation
|
(101.2)
|
|
Exchange difference
|
(61.9)
|
|
Closing net book amount at 31 March 2012
|
4,099.0
|
|
|
|
|
Six months ended 31 March 2011
|
|
|
|
|
|
Opening net book amount at 1 October
2010
|
4,837.2
|
|
Additions
|
97.9
|
|
Acquisition of subsidiaries
|
68.0
|
|
Disposals
|
(8.9)
|
|
Impairment charge
|
(6.0)
|
|
Depreciation and amortisation
|
(96.8)
|
|
Exchange difference
|
83.9
|
|
Closing net book amount at 31 March 2011
|
4,975.3
|
In accordance with accounting standards, the Group
tests the carrying value of goodwill for impairment
annually and whenever events or circumstances
change.
Poor trading and subsequent reviews undertaken by new
management in Canada and France have indicated that the
goodwill carried in the North America and West Europe
segments may be impaired. As a consequence, we have tested
the goodwill in these segments for impairment using updated
cash flow projections that are considered to reflect the
current trading environment. As a result we have recognised
impairment charges of £109.2m in respect of North America
and £94.4m in respect of West Europe, resulting in the
write off of all goodwill held in respect of the North
America segment. The carrying value of West Europe
goodwill remains sensitive to reasonably possible changes
in key assumptions which could result in a further
impairment or write back of goodwill held by this
segment.
Impairment testing is performed by comparing the
carrying value of each cash-generating unit (CGU) to the
recoverable amount, determined on the basis of the CGU
value in use calculations. These calculations require the
use of estimates and use pre-tax cash flow projections
based on management's most recent forecasts of customer
volumes, average selling prices and margins. Cash
flows beyond the forecast period are extrapolated at an
estimated average long-term nominal growth rate.
The discount and long term growth rates used in the
North America and West Europe value in use calculations are
as follows:
- pre-tax
discount rate of 9.23% (North America) and 9.24% (West
Europe) reflecting the specific risks in both
segments
- long term
nominal growth rate of 2% (North America) and 1% (West
Europe)
If the estimated growth rate had been zero for the
West Europe segment the impairment charge would have
increased by £31.2m. If the forecast cash flows in
the value in use calculations had been reduced by £1.0m in
each and every year the Group would have recognised a
further impairment against goodwill of £14.5m
In addition, in the current period we classified the
assets and liabilities of our Indian business as held for
sale (see note 11). On 21 May 2012, the Group
announced that it had agreed to sell its interest for INR
8,174m. Consequently, an impairment charge of £96.0m
has been recognised against goodwill on writing down the
net assets of the Indian subsidiary to fair value less
costs to sell.
Capital commitments
The Group is contractually committed to the
acquisition of twelve new Airbus A321 aircraft which have a
list price of $96m each, before escalations and
discounts. These aircraft are scheduled for delivery
in 2014 and will be the first aircraft to be delivered as
part of the fleet replacement programme announced in
December 2010.Other capital commitments were
£31.5m (September 2011: £31.6m).
11. Assets held for sale
|
|
Unaudited
|
Audited
|
|
|
31 March 2012
£m
|
30 September 2011
£m
|
|
Assets
|
|
|
|
Property, plant and equipment - land and
buildings
|
42.4
|
53.4
|
|
Property, plant and equipment - other fixed
assets
|
25.7
|
14.1
|
|
Intangible assets
|
67.5
|
0.1
|
|
Trade and other receivables
|
54.8
|
2.2
|
|
Tax assets
|
0.9
|
0.1
|
|
Deferred tax assets
|
1.0
|
-
|
|
Inventories
|
0.4
|
0.5
|
|
Cash and cash equivalents
|
40.9
|
-
|
|
|
233.6
|
70.4
|
|
|
|
|
|
Liabilities
|
|
|
|
Retirement benefit obligations
|
1.7
|
1.5
|
|
Trade and other payables
|
37.1
|
10.2
|
|
Borrowings and bank overdrafts
|
44.3
|
22.1
|
|
Obligations under finance leases
|
0.4
|
0.1
|
|
Tax liabilities
|
0.3
|
0.3
|
|
Revenue received in advance
|
16.7
|
0.2
|
|
Deferred tax liabilities
|
7.3
|
0.6
|
|
|
107.8
|
35.0
|
The assets and liabilities related to Thomas Cook
(India) Limited ("TCIL"), a 77% owned,
consolidated subsidiary of Thomas Cook UK Ltd, reported
within the UK segment, have been presented as held for sale
following the launch of a formal sale process on 8 February
2012. On 21 May 2011, the Group announced that it had
agreed to sell its interest in TCIL, with a completion date
for the transaction expected to be before September
2012. These assets and liabilities are a disposal
group, however, TCIL is not a discontinued operation at 31
March 2012, as it does not represent a major line of
business.
The assets and liabilities of the disposal group were
tested for impairment and remeasured to the lower of
carrying amount and fair value less cost to sell at the
date of held for sale classification. This resulted in
goodwill being written down by £96.0m.
The assets and liabilities of Hoteles y Clubs
Vacaciones S.A. ("HCV"), a 51% owned,
consolidated subsidiary of TC Touristik GmbH, reported
within the Central Europe segment, have also been presented
as held for sale. On 13 December 2011, the Group announced
it had agreed to sell its interest in HCV, shareholder
approval was received on 29 May 2012 and the Group expects
to complete the sale in June 2012.
12. Business combinations
Acquisitions made during the period
Retail travel joint venture between Thomas Cook
Group, The Co-operative Group and Midlands
Co-operative
On 4 October 2011 the Group concluded the merger of
its high street travel agency and foreign exchange business
with those of The Co-operative Group and Midlands
Co-operative. The Group acquired 66.5% of the new joint
venture company with The Co-operative Group holding 30% and
Midlands Co-operative Society holding 3.5%.
Details of the net assets acquired are set out in the
table below:
|
|
Carrying amount
|
|
Amount
|
|
|
before business
|
Fair value
|
recognised at
|
|
|
combination
|
adjustment
|
acquisition date
|
|
|
£m
|
£m
|
£m
|
|
Net assets acquired
|
|
|
|
|
Intangible assets
|
-
|
23.4
|
23.4
|
|
Property, plant and equipment
|
11.2
|
-
|
11.2
|
|
Trade and other receivables
|
30.2
|
-
|
30.2
|
|
Cash and cash equivalents
|
39.4
|
-
|
39.4
|
|
Trade and other payables
|
(138.2)
|
-
|
(138.2)
|
|
Corporation tax payable
|
(1.1)
|
-
|
(1.1)
|
|
Provisions
|
(4.9)
|
-
|
(4.9)
|
|
|
(63.4)
|
23.4
|
(40.0)
|
|
Less: non-controlling interest
|
|
|
13.4
|
|
|
|
|
(26.6)
|
|
Goodwill
|
|
|
77.7
|
|
|
(63.4)
|
23.4
|
51.1
|
|
|
|
|
|
|
Satisfied by:
|
|
|
|
|
Non-controlling interest in the joint
venture
|
|
|
50.0
|
|
Deferred consideration
|
|
|
1.4
|
|
Put/call option
|
|
|
(0.3)
|
|
|
|
|
51.1
|
The purchase price of each asset component of the
acquisition represents its provisional fair value, based on
management's best estimates. The amount indicated above
for trade and other receivables represents the fair value
of the acquired receivables and is equal to the gross
contractual cash flows, all of which are expected to be
recoverable.
The acquired business contributed revenue of £38.8m
and a net loss of £14.6m to the Group for the period from
acquisition to 31 March 2012.
The provisional goodwill of £77.7m reflects
anticipated benefits and synergies expected by creating the
UK's largest high street travel network and increased
in-house distribution of Thomas Cook's own travel
products.
The non-controlling interest represents their
proportionate share of the identifiable net liabilities of
the acquired business.
12. Business combinations
(continued)
Tour Vital GmbH and Panameo GmbH
On 1 October 2011 the Group acquired 100% of the
share capital of Tour Vital GmbH and Panameo GmbH, two
specialist tour operators based in Germany. The
consideration was £8.6m of which £2.3m has been paid in
cash and £6.3m has been recognised in relation to an earn
out to be settled by 1 April 2016.
Details of the net assets acquired are set out in the
table below:
|
|
Carrying amount
|
|
Amount
|
|
|
before business
|
Fair value
|
recognised at
|
|
|
combination
|
adjustment
|
acquisition date
|
|
|
£m
|
£m
|
£m
|
|
Net assets acquired
|
|
|
|
|
Intangible assets
|
-
|
5.9
|
5.9
|
|
Trade and other receivables
|
4.6
|
-
|
4.6
|
|
Cash and cash equivalents
|
1.6
|
-
|
1.6
|
|
Trade and other payables
|
(7.1)
|
-
|
(7.1)
|
|
Provisions
|
(0.1)
|
-
|
(0.1)
|
|
Deferred tax liability
|
-
|
(1.7)
|
(1.7)
|
|
|
(1.0)
|
4.2
|
3.2
|
|
Goodwill
|
|
|
5.4
|
|
|
(1.0)
|
4.2
|
8.6
|
|
|
|
|
|
|
Satisfied by:
|
|
|
|
|
Cash paid
|
|
|
2.3
|
|
Contingent consideration
|
|
|
6.3
|
|
|
|
|
8.6
|
The purchase price of each asset component of the
acquisition represents its provisional fair value, based on
management's best estimates. The amount indicated above
for trade and other receivables represents the fair value
of the acquired receivables and is equal to the gross
contractual cash flows, all of which are expected to be
recoverable.
The acquired businesses contributed revenue of £19.2m
and net profit of £0.6m to the Group for the period from
acquisition to 31 March 2012.
The provisional goodwill of £5.4m reflects the
anticipated benefits arising from the acquisition of two
specialist tour operators.
Acquisitions made in the prior period
Algarve Tours - Agencia de Viagens e Turismo,
Lda
On 20 September 2011, the Group acquired 100% of
Algarve Tours, an incoming agency based in Portugal for a
cash consideration of £1.2m. The fair value of net assets
acquired was £1.0m and goodwill of £0.2m has been
recognised. The Directors do not consider the fair value
adjustments to be material to the Group. Consequently the
prior year comparatives have not been restated as required
by IFRS3 revised.
|
Net cash inflow from acquisitions
|
|
|
|
|
|
|
|
|
Current
year
acquisitions
£m
|
Gold
Medal
£m
|
Algarve
Tours
£m
|
Think W3
Ltd
£m
|
Hotels4U
£m
|
Total
£m
|
|
|
|
|
|
|
|
|
|
Net cash inflow from acquisitions
|
|
|
|
|
|
|
|
Cash consideration for shares
|
(2.3)
|
-
|
-
|
-
|
-
|
(2.3)
|
|
Payment of contingent and deferred
consideration
|
-
|
(4.0)
|
-
|
(2.5)
|
(0.8)
|
(7.3)
|
|
Cash and cash equivalents acquired (net of
overdraft)
|
41.0
|
-
|
1.4
|
-
|
-
|
42.4
|
|
|
38.7
|
(4.0)
|
1.4
|
(2.5)
|
(0.8)
|
32.8
|
12. Business combinations (continued)
Disposal of businesses
Reisbureau Neckermann Nederland
On 1 October 2011, the Group completed the sale of
its retail stores business in the Netherlands. The net cash
proceeds on disposal of the business were £4.6m.
Explorers
On 30 March 2012, the Group disposed of the Explorers
Hotel in France. The net cash proceeds on disposal
were £2.3m.
13. Borrowings and loans
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
as at
|
as at
|
as at
|
|
|
31/03/12
|
31/03/11
|
30/09/11
|
|
|
£m
|
£m
|
£m
|
|
Current
|
95.6
|
422.0
|
179.5
|
|
Non-current
|
1,695.7
|
905.3
|
967.8
|
|
|
1,791.3
|
1,327.3
|
1,147.3
|
Movements in borrowings is analysed as
follows:
|
Six months ended 31 March 2012
|
£m
|
|
|
|
|
At 1 October 2011
|
1,147.3
|
|
Draw down of borrowings
|
821.2
|
|
Repayment of borrowings
|
(122.8)
|
|
Transfer to liabilities related to assets held
for sale (note 11)
|
(21.2)
|
|
Capitalisation of facility fees
|
(14.9)
|
|
Settlement of loan note
|
(4.0)
|
|
Unwinding of interest
|
7.4
|
|
Exchange differences
|
(21.7)
|
|
At 31 March 2012
|
1,791.3
|
|
|
|
|
Six months ended 31 March 2011
|
£m
|
|
|
|
|
At 1 October 2010
|
1,062.7
|
|
Draw down of borrowings
|
272.8
|
|
Repayment of borrowings
|
(22.2)
|
|
Unwinding of interest
|
4.9
|
|
Exchange differences
|
9.1
|
|
At 31 March 2011
|
1,327.3
|
14. Provisions
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
as at
|
as at
|
as at
|
|
|
31/03/12
|
31/03/11
|
30/09/11
|
|
|
£m
|
£m
|
£m
|
|
Included in current liabilities
|
163.1
|
155.8
|
187.6
|
|
Included in non-current liabilities
|
197.2
|
204.5
|
193.5
|
|
|
360.3
|
360.3
|
381.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Aircraft
|
|
|
|
|
maintenance
|
Other
|
|
|
|
provisions
|
provisions
|
Total
|
|
Six months ended 31 March 2012
|
£m
|
£m
|
£m
|
|
At 1 October 2011
|
216.0
|
165.1
|
381.1
|
|
Additional provisions
|
30.5
|
37.8
|
68.3
|
|
Unused amounts released
|
(0.5)
|
(5.6)
|
(6.1)
|
|
Utilisation of provisions
|
(34.5)
|
(39.2)
|
(73.7)
|
|
Transfer to liabilities related to assets held
for sale (note 11)
|
(0.1)
|
-
|
(0.1)
|
|
Exchange differences
|
(6.5)
|
(2.7)
|
(9.2)
|
|
At 31 March 2012
|
204.9
|
155.4
|
360.3
|
|
|
|
|
|
|
Six months ended 31 March 2011
|
£m
|
£m
|
£m
|
|
At 1 October 2010
|
204.8
|
212.5
|
417.3
|
|
Additional provisions
|
22.2
|
15.1
|
37.3
|
|
Unused amounts released
|
(6.1)
|
(4.1)
|
(10.2)
|
|
Utilisation of provisions
|
(27.2)
|
(46.2)
|
(73.4)
|
|
Exchange differences
|
(2.6)
|
(8.1)
|
(10.7)
|
|
At 31 March 2011
|
191.1
|
169.2
|
360.3
|
|
|
|
|
|
The aircraft maintenance provisions relate to
maintenance on leased aircraft and spares used by the
Group's airlines in respect of leases which include
contractual return conditions. This expenditure arises at
different times over the life of the aircraft with major
overhauls typically occurring between two and ten
years.
|
Other provisions
|
|
|
|
|
|
|
|
Off-market leases
|
Reorganisation and restructuring plans
|
Deferred and contingent consideration
|
Other
|
Total
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
At 1 October 2011
|
43.5
|
25.0
|
24.9
|
71.7
|
165.1
|
|
Additional provisions
|
4.9
|
15.2
|
3.3
|
14.4
|
37.8
|
|
Unused amounts released
|
-
|
-
|
-
|
(5.6)
|
(5.6)
|
|
Utilisation of provisions
|
(3.2)
|
(8.1)
|
(4.2)
|
(23.7)
|
(39.2)
|
|
Exchange differences
|
(1.2)
|
(0.2)
|
-
|
(1.3)
|
(2.7)
|
|
At 31 March 2012
|
44.0
|
31.9
|
24.0
|
55.5
|
155.4
|
Off-market leases relate to leases acquired through
the Hi! Hotels International Limited acquisition and the
The Co-operative Group and Midlands Co-operative, and
MyTravel Group plc mergers, which have commitments in
excess of the market rate at the time of the
transaction. Reorganisation and restructuring
plans predominantly represent anticipated restructuring
costs in the UK retail business. Deferred and contingent
consideration represents future purchase options on the
Hotels4u.com Limited and Think W3 Limited
acquisitions.
'Other' represents liabilities
where there is uncertainty of the timing or amount of the
future expenditure required in settlement and includes such
items as insurance claims, onerous contracts and customer
compensation claims. This grouping contains no
single category larger than £15m.
Provisions included in non-current liabilities are
principally in respect of off-market lease contracts and
are expected to be utilised over the term of those
contracts which extend up to ten years from the balance
sheet date and deferred and contingent consideration
arising on acquisitions.
15. Note to the cash flow statement
|
|
Unaudited
|
Unaudited
|
|
|
Six months ended 31 March 2012
£m
|
Six months
ended 31 March 2011
£m
|
|
Loss before tax
|
(712.9)
|
(269.4)
|
|
Adjustments for:
|
|
|
|
|
Net finance costs
|
71.1
|
68.9
|
|
|
Net investment income
|
(0.3)
|
1.2
|
|
|
Share of results of associates and joint
venture
|
(1.0)
|
1.4
|
|
|
Depreciation and amortisation
|
86.3
|
80.3
|
|
|
Impairment of assets
|
299.6
|
6.0
|
|
|
Amortisation of business combination
intangibles
|
14.9
|
16.5
|
|
|
Disposal of businesses, P,P&E, and other
assets
|
4.8
|
(1.4)
|
|
|
Movement on share-based payments
|
1.1
|
(0.4)
|
|
|
Other non-cash items
|
-
|
(20.9)
|
|
|
Additional pension contribution
|
(8.8)
|
(8.3)
|
|
|
Decrease in provisions
|
(16.2)
|
(42.9)
|
|
|
Income received from other non-current
investments
|
0.3
|
0.3
|
|
|
Interest received
|
3.7
|
1.7
|
|
Operating cash flows before movement in working
capital
|
(257.4)
|
(167.0)
|
|
|
|
|
|
Movement in working capital
|
(170.7)
|
43.8
|
|
|
|
|
|
Cash generated by operations
|
(428.1)
|
(123.2)
|
|
Income taxes paid
|
(21.0)
|
(19.0)
|
|
|
|
|
|
Net cash from operating activities
|
(449.1)
|
(142.2)
|
Cash and cash equivalents, which are presented as a
single class of assets on the face of the balance sheet
unless disclosed within assets held for sale, comprise cash
at bank and other short-term highly liquid investments with
maturity of three months or less.
16. Net debt
|
|
|
|
|
|
|
|
|
|
At 1 October 2011
|
Cash
flow
|
Transfer to liabilities related to assets held
for sale
|
Other non-cash
changes
|
Exchange
movements
|
At 31
March
2012
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Liquidity
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
359.3
|
162.1
|
(38.7)
|
-
|
(5.9)
|
476.8
|
|
Classified as
held for sale
|
-
|
2.1
|
38.7
|
-
|
0.1
|
40.9
|
|
|
359.3
|
164.2
|
-
|
-
|
(5.8)
|
517.7
|
|
|
|
|
|
|
|
|
|
Current debt
|
|
|
|
|
|
|
|
Bank overdrafts
|
(17.6)
|
(5.5)
|
6.0
|
-
|
0.4
|
(16.7)
|
|
Bank overdrafts classified as held for
sale
|
-
|
-
|
(6.0)
|
-
|
-
|
(6.0)
|
|
Short-term borrowings
|
(89.1)
|
21.8
|
15.2
|
-
|
2.4
|
(49.7)
|
|
Loan note
|
(4.0)
|
4.0
|
-
|
-
|
-
|
-
|
|
Current portion of
long-term borrowings
|
(68.8)
|
61.0
|
-
|
(22.4)
|
1.0
|
(29.2)
|
|
Borrowings classified
as held for sale
|
(22.1)
|
(1.7)
|
(15.2)
|
-
|
0.7
|
(38.3)
|
|
Obligations under finance leases classified as
held for sale
|
(0.1)
|
0.1
|
(0.4)
|
-
|
-
|
(0.4)
|
|
Obligations under finance leases
|
(18.6)
|
6.2
|
0.1
|
(5.5)
|
(0.1)
|
(17.9)
|
|
|
(220.3)
|
85.9
|
(0.3)
|
(27.9)
|
4.4
|
(158.2)
|
|
Non-current debt
|
|
|
|
|
|
|
|
Long-term borrowings
|
(967.8)
|
(760.8)
|
-
|
15.0
|
17.9
|
(1,695.7)
|
|
Obligations under finance leases
|
(62.1)
|
-
|
0.3
|
5.5
|
2.6
|
(53.7)
|
|
|
(1,029.9)
|
(760.8)
|
0.3
|
20.5
|
20.5
|
(1,749.4)
|
|
Total debt
|
(1,250.2)
|
(674.9)
|
-
|
(7.4)
|
24.9
|
(1,907.6)
|
|
Net debt
|
(890.9)
|
(510.7)
|
-
|
(7.4)
|
19.1
|
(1,389.9)
|
17. Contingent liabilities
|
|
Unaudited
|
Audited
|
|
|
as at
31/03/12
£m
|
as at
30/09/11
£m
|
|
Contingent liabilities
|
151.4
|
124.7
|
Contingent liabilities primarily comprise guarantees,
letters of credit and other contingent liabilities,
including contingent liabilities related to structured
aircraft leases, all of which arise in the ordinary course
of business. The amounts disclosed above represent the
Group's contractual exposure.
18. Defined benefit plans
|
|
Unaudited
|
Audited
|
|
The amounts recognised in the balance sheet are
as follows:
|
as at 31/03/12
£m
|
as at 30/09/11
£m
|
|
|
|
|
|
Present value of funded defined benefit
obligations
|
904.2
|
846.5
|
|
Fair value of scheme assets
|
(793.2)
|
(743.3)
|
|
Deficit on funded retirement benefit
obligations
|
111.0
|
103.2
|
|
Present value of unfunded defined benefit
obligations
|
255.3
|
227.8
|
|
|
366.3
|
331.0
|
|
|
|
|
|
|
Unaudited
|
Audited
|
|
Scheme deficits are presented in the balance
sheet as follows:
|
as at 31/03/12
£m
|
as at 30/09/11
£m
|
|
|
|
|
|
Current liabilities
|
6.4
|
6.8
|
|
Non-current liabilities
|
359.9
|
324.2
|
|
|
366.3
|
331.0
|
|
|
|
|
|
|
Unaudited
|
Unaudited
|
|
The amounts recognised in the income statement
are as follows:
|
Six months ended 31/03/12
£m
|
Six months ended 31/03/11
£m
|
|
|
|
|
|
Current service cost
|
5.4
|
14.0
|
|
Expected return on scheme assets
|
(20.7)
|
(20.9)
|
|
Gain on settlements
|
-
|
(25.8)
|
|
Interest cost on scheme liabilities
|
27.5
|
27.6
|
|
|
12.2
|
(5.1)
|
|
|
|
|
|
|
Unaudited
|
Unaudited
|
|
Amounts recognised directly in other
comprehensive income are as follows:
|
Six months ended 31/03/12
£m
|
Six months ended 31/03/11
£m
|
|
|
|
|
|
Actuarial (losses)/gains on defined benefit
pension schemes
|
(46.7)
|
118.7
|
19. Related party transactions
Transactions between the Company and its
subsidiaries, which are related parties, have been
eliminated on consolidation and are not disclosed in this
note. Transactions between the Group and its associates,
joint venture undertaking and participations are disclosed
below.
Trading transactions
During the period, Group companies entered into the
following transactions with related parties who are not
members of the Group:
|
|
Associates, joint venture and
participations*
|
|
|
Unaudited
|
Audited
|
|
|
31 March 2012
£m
|
30 September 2011
£m
|
|
Sale of goods and services
|
10.1
|
31.6
|
|
Purchases of goods and services
|
(17.9)
|
(36.3)
|
|
Interest receivable
|
0.2
|
-
|
|
Other income
|
1.1
|
0.5
|
|
Amounts owed by related parties
|
27.1
|
23.2
|
|
Provisions against amounts owed
|
(4.0)
|
(4.2)
|
|
Amounts owed to related parties
|
(8.3)
|
(5.7)
|
*Participations are equity investments
where the Group has significant equity participation but
which are not considered to be associates or joint
ventures.
All transactions are considered to have been made at
market prices. Outstanding amounts will normally be settled
by cash payment.
20. Events occurring after the balance
sheet date
Board changes
Harriet Green has been appointed as Group Chief
Executive Officer, with effect from 30 July 2012, and
Michael Healy has been appointed as Group Chief Financial
Officer, with effect from 1 July 2012.
Bank facilities
On 5 May 2012, the Group announced that it had agreed
a new financing package with its lenders that extends the
maturity of its financing until 31 May 2015 and provides
further stability to the business. Under the amended terms
there will be no fixed repayments and the Group will now
retain the proceeds of certain disposals which will
increase liquidity. Revised financial covenants, which
offer greater financial flexibility, have also been
agreed.
The banks will be entitled to an amendment fee of 1%
and will be granted warrants to subscribe for new ordinary
shares (representing approximately 5% of the issued share
capital of Thomas Cook Group plc) at an exercise price of
€0.10 per share. In addition, the warrants issued in
December 2011 will be re-priced to the same exercise
price.
Aircraft sale and leaseback
On 11 May 2012, the Group announced that it had
agreed to the sale and leaseback of 11 Boeing 757 aircraft
with Guggenheim Aviation Partners LLC
("Guggenheim") and 6 Boeing 767 aircraft with
Aircastle Advisor (International) Limited
("Aircastle"). The Group has also agreed in
principle to enter into sale and leaseback agreements in
respect of a further 2 Boeing 767 aircraft with
Guggenheim. On 29 May 2012, the Group received
shareholder approval for these transactions.
The Group expects to receive proceeds of USD 202.9m
from the sale of 11 Boeing 757s and 2 B767s to Guggenheim,
and USD 91.5m from the sale of 6 Boeing 767s to Aircastle.
The leaseback arrangements will be treated for accounting
purposes as finance leases.
India
On 21 May 2012, the Group announced that it had
agreed to sell its 77% interest in Thomas Cook (India)
Limited ("TCIL") to Fairbridge Capital
(Mauritius) Limited, a subsidiary of Fairfax Financial
Holdings Limited. Under the terms of the agreement,
Thomas Cook will receive gross cash proceeds of INR 8,174m
for its shareholding; equivalent to INR 50 per share. The
Group will grant Fairbridge a licence over the Thomas Cook
brand for 12.5 years in the countries in which TCIL
currently operates.
Completion of the sale is conditional upon
shareholder approval and will require Indian regulatory
approval. The sale is expected to complete within the
current financial year.
20. Events occurring after the balance
sheet date (continued)
Hoteles y Clubs Vacaciones S.A
On 29 May 2012, the Group received shareholder
approval for the disposal of its interest in HCV to
Iberostar. The Group will receive proceeds of €71.9m and
HCV is expected to be sold with net debt of c€22m. The sale
is expected to complete in June 2012 and the Group is
expected to recognise a gain on disposal of c€35m.
21. Seasonality
Revenue is subject to significant seasonal
fluctuations between winter and summer seasons, with peak
demand in the summer season. The Group mitigates this
seasonal impact through operating in different global
holiday markets which have different annual cycles and
offering a broad range of holiday products in both the
winter and summer seasons.
The following exchange rates against Sterling for our
major functional currencies are the average of those used
to translate the results of the current and prior year
periods.
|
Income Statement
|
Six months ended 31 March 2012
£m
|
Six months ended 31 March 2011
£m
|
|
Euro
|
1.18
|
1.16
|
|
Swedish Krona
|
10.6
|
10.5
|
|
Canadian Dollar
|
1.59
|
1.59
|
|
Indian Rupee
|
79.6
|
71.6
|
The following exchange rates against Sterling for our
major functional currencies have been used to translate the
balance sheet at the current and prior period end.
|
Balance Sheet
|
As at 31 March 2012
£m
|
As at 31 March 2011
£m
|
|
Euro
|
1.20
|
1.13
|
|
Swedish Krona
|
10.6
|
10.1
|
|
Canadian Dollar
|
1.59
|
1.56
|
|
Indian Rupee
|
81.5
|
71.5
|
As profits and losses in Euro-denominated segments
build up differently over the period, the average income
statement translation rates may vary.
Statement of Directors' Responsibilities
The directors confirm that this condensed
consolidated interim financial information has been
prepared in accordance with IAS 34 as adopted by the
European Union, and that the interim management report
includes a fair review of the information required by DTR
4.2.7 and DTR 4.2.8, namely:
· an
indication of important events that have occurred during
the six months and their impact on the condensed set of
financial statements, and a description of the principal
risks and uncertainties for the remaining six months of the
financial year; and
· material
related party transactions in the first six months and any
material changes in the related party transactions
described in the last annual report.
The directors of Thomas Cook Group plc are as listed
in the Thomas Cook Group plc Annual Report for 30 September
2011 with the exception of the following changes since the
approval of that Annual Report: Peter Middleton, David
Allvey and Bo Lerenius resigned from the Board on 8
February 2012.
By order of the Board
Paul Hollingworth
Group Chief Financial Officer
30 May 2012
Independent review report to Thomas Cook Group
plc
Introduction
We have been engaged by the Company to review the
condensed consolidated interim financial information in the
half-yearly financial report for the six months ended 31
March 2012, which comprises the Group Income Statement,
Group Statement of Comprehensive Income, Group Statement of
Cash Flow, Group Balance Sheet, Group Statement of Changes
in Equity and related notes. We have read the other
information contained in the half-yearly financial report
and considered whether it contains any apparent
misstatements or material inconsistencies with the
information in the condensed set of financial
statements.
Directors' responsibilities
The half-yearly financial report is the
responsibility of, and has been approved by, the directors.
The directors are responsible for preparing the half-yearly
financial report in accordance with the Disclosure and
Transparency Rules of the United Kingdom's Financial
Services Authority.
As disclosed in note 2, the annual financial
statements of the group are prepared in accordance with
IFRSs as adopted by the European Union. The condensed set
of financial statements included in this half-yearly
financial report has been prepared in accordance with
International Accounting Standard 34, "Interim
Financial Reporting", as adopted by the European
Union.
Our responsibility
Our responsibility is to express to the Company a
conclusion on the condensed set of financial statements in
the half-yearly financial report based on our review. This
report, including the conclusion, has been prepared for and
only for the Company for the purpose of the Disclosure and
Transparency Rules of the Financial Services Authority and
for no other purpose. We do not, in producing this report,
accept or assume responsibility for any other purpose or to
any other person to whom this report is shown or into whose
hands it may come save where expressly agreed by our prior
consent in writing.
Scope of review
We conducted our review in accordance with
International Standard on Review Engagements (UK and
Ireland) 2410, 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity'
issued by the Auditing Practices Board for use in the
United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and
applying analytical and other review procedures. A review
is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and
Ireland) and consequently does not enable us to obtain
assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our
attention that causes us to believe that the condensed set
of financial statements in the half-yearly financial report
for the six months ended 31 March 2012 is not prepared, in
all material respects, in accordance with International
Accounting Standard 34 as adopted by the European Union and
the Disclosure and Transparency Rules of the United
Kingdom's Financial Services Authority.
PricewaterhouseCoopers LLP
Chartered Accountants
30 May 2012
London
Appendix 2 - Key performance indicators
definitions
* Revenue for the Group and segmental analysis
represents external revenue only, except in the case of the
Airlines Germany segmental key performance analysis where
revenue of £115.8m (2011 £119.8m) largely to the Central
Europe segment has been included.
** Underlying profit/loss from operations is defined
as earnings before interest and tax, and has been adjusted
to exclude all separately disclosed items. It also
excludes our share of the results of associates and joint
venture.
*** Underlying operating margin is underlying
profit/loss from operations (as defined above) divided by
external revenue, except in the case of the Airlines
Germany segmental key performance analysis where total
revenue has been used as the denominator to more accurately
reflect the trading performance.
† Passengers in the case of UK, Northern Europe and
North America represents the total number of passengers (in
thousands) that departed on a Thomas Cook Group plc holiday
in the period. It excludes customers who booked
third-party tour operator products through Thomas Cook
retail channels and customers who booked transfers only.
For Central and West Europe, passengers represents all tour
operator passengers departed in the period, excluding those
on which only commission is earned.
Mass Market Risk passengers in UK, Northern Europe
and North America represent those holidays sold where the
business has financial commitment to the product (flights
and accommodation) before the customer books. The
analysis excludes accommodation only passengers.
†† Capacity for UK, Northern Europe and North America
represents the total number of holidays available to
sell. This is calculated by reference to committed
airline seats (both in-house and third-party).
In the case of Airlines Germany, capacity represents
the total number of available seat kilometres (ASK).
ASK is a measure of an airline's passenger carrying
capacity and is calculated as available seats multiplied by
distance flown.
††† For UK, Northern Europe and North America, load
factor is a measure of how successful the tour operator was
at selling the committed capacity. Load factor is
calculated by dividing the departed mass market passengers
in the period (excluding accommodation only passengers) by
the capacity in the period.
For Airlines Germany, seat load factor is a measure
of how successful the airline was at selling the available
capacity. This is calculated by dividing the revenue
passenger kilometres (RPK) by the available seat kilometres
(ASK - see capacity definition above) and is the recognised
IATA definition of load factor used for airlines. RPK is a
measure of the volume of passengers carried by an airline.
One RPK is flown when a passenger is carried one
kilometre.
# Average selling price for UK, Northern Europe and
North America represents the average selling price (after
discounts) achieved per mass market passenger departed in
the period (excluding accommodation only passengers). For
Central and West Europe, average selling price represents
the average selling price (after discounts) achieved per
passenger departed in the period.
## Brochure mix is defined as the number of mass
market holidays (excluding seat and accommodation only)
sold at brochure prices divided by the total number of
holidays sold (excluding seat and accommodation only) and
is a measure of how successful a business was at selling
holidays early. Holidays are generally discounted closer to
departure.
‡‡Controlled distribution is defined as
the proportion of passengers booking through our in-house
retail shops, call centres and websites. Internet
distribution is a sub-set of controlled distribution and is
defined as the proportion of passengers booking through
in-house websites. Both performance indicators are
calculated on departed passengers in the period.
‡‡‡ Sold seats in Airlines Germany
represents the total number of one-way seats sold on
aircraft (in thousands) that departed in the period.
### Yield in Airlines Germany represents the average
price per seat departed in the period.
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