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Analysts and industry heads are in agreement that All Leisure’s purchase of Page & Moy for £4.2m was ‘a good fit’. By Patrick Whyte
City gives thumbs up to Page & Moy purchase
ALL LEISURE’S £4.2m purchase of the Page & Moy Travel Group has been welcomed by both the City and by its former chief executive. The deal is being bankrolled by
a £5.8m loan from a consortium of investors, with the majority coming from executive chairman Roger Allard. The loan will be repaid over five years and because of this debt, as well as the cost of integrating the two companies, All Leisure has said that a dividend is unlikely to be paid “in the foreseeable future”. All Leisure had focused primarily on the cruise market with its brands Voyages of Discovery, Swan Hellenic and Hebridean. However, the acquisition of Page & Moy will see it take a stake in the escorted touring sector. Allard said the two companies
were well suited with a similar target market.
RYANAIR RESULTS
O’Leary cautious on ¤503m profit
RYANAIR HAS reported a 25% increase in its full year profits to ¤503m, but the airline’s boss, Michael O’Leary, warned that a repeat performance was unlikely. O’Leary said that “recession,
austerity, currency concerns and lower fares at new and growing bases” could end up slicing 20% off annual profits.
16 24.05.2012
that’s quite close to the asset value, which gives them some downside protection”.
He added: “If they can move the margin into positive territory it will be a very remunerative deal for All Leisure.” In the year to November 30, 2011,
Allard: we share demographics “[Its] customer demographics are
very similar to ours,” Allard said. “They are forecasted to make a
profit this year, which is good and that’s what attracted us.” Douglas McNeill, analyst at Charles Stanley Securities, said that while the deal “was not without risk” it could still prove a shrewd purchase, because All Leisure has “paid a sum
In the 12 months ending March 31, the airline’s revenue grew 19%, from ¤3,6bn in 2011 to ¤4,3bn in 2012, while passenger traffic grew 5% to 76 million, up from 72 million a year ago. The no-frills carrier said that it had also increased average fares by 16%, as it looked to cover the rising cost of fuel and reduced capacity. O’Leary also warned that high oil prices could force more European airlines to go bust, following on from the recent closures of Spanair and Malev. “We expect more European
Page & Moy Travel Group’s revenue was £107.6m with an operating loss of £5.6m and, following the one-off impairment in full of the company’s goodwill of £35.6m, a loss before tax of £45.1m. Analysts at Panmure Gordon called the move “a sensibly strategic acquisition, which reduces risk in the currently challenging cruise market”.
IHG -4.1%£14.10
Industry experts have indicated that Allard’s group had picked up the group at a steal, as it was the subject of a £144m management buyout backed by private-equity firm Electra Partners Europe in 2006. The company had gone through a period of change, with former chief executive William Burton leaving the company in June 2011 and being replaced by former Lunn Polly chief executive Ian Smith. In December, it was announced that the Page & Moy brand would disappear from 2013, and that the group would focus on its Travelsphere and Just You programmes. At that time it said that the Page & Moy Group would remain, but Page & Moy-branded holidays would not be marketed to consumers in its 2013 brochures. On the deal, Burton, who was chief
executive from November 2008 until June 2011, said: “I’m delighted Allard has bought the company. It’s a good fit and I wish them every success.”
failures in 2012, as higher oil prices and recession continues to expose failed airline models as well as subscale or peripheral carriers,” he said.
Despite the gloomy outlook,
O’Leary was able to announce that the airline proposes to payout ¤483m to shareholders in November – only its second such dividend since floating in 1997.
“If paid, our second special dividend will mean Ryanair has returned ¤1.53bn in dividends and share buybacks to shareholders over the past five years,” O’Leary said.
COOK RESULTS LATEST: Thomas Cook has confirmed the date for its latest results announcement. The operator’s interim results for the six months ending March 31 will be posted on May 31.
£4.2m
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