TIDMALLG
RNS Number : 9961O
All Leisure Group PLC
15 February 2016
15 February 2016
All Leisure Group plc
Preliminary results for the year ended 31 October 2015
Financial Highlights
-- All Leisure Group closed the year to 31 October 2015 with an
overall Profit after Taxation of GBP0.5m, compared to a loss of
GBP(7.5)m in the prior year
-- Underlying operating profit/loss* before movement in the
provision for derivative contracts was a loss of GBP1.5 million
(2014: profit of GBP0.9 million). Underlying Operating profit was
GBP1.1 million (2014: GBP1.3 million).
-- Revenue of GBP127.3 million (2014: GBP138.9 million) was
lower due to dry-dock periods for both the Voyager and Minerva
vessels, together with lower numbers of Tours passengers.
-- Strong cost control delivered Underlying Selling and
Administrative cost savings of GBP0.9m in the year.
-- Underlying net profit was GBP1.0 million (2014: profit of
GBP0.6 million), an improvement of GBP0.4 million.
-- Full year pre-tax profit was GBP0.2 million (2014: loss of GBP7.2 million).
-- After tax, there was a profit for the year of GBP0.5m (2014:
loss of GBP7.5 million).
-- Total bank and cash declined to GBP10.2 million (2014:
GBP15.1 million) at the balance sheet date, given higher capital
expenditure in the period plus losses incurred on foreign currency
hedge contracts that have subsequently expired.
-- On 30 November 2015 the Group entered a sale and leaseback in
relation to the Hebridean Princess vessel, raising GBP3.0 million
cash (less expenses) to improve liquidity. This was a post balance
sheet event, not reflected in these financial statements.
Operational Highlights
-- Overall passenger numbers declined 6%, with Cruise passengers
down 1% and Tour passengers down 9% in the year. Bookings to the
Eastern Mediterranean and North Africa, notably Egypt, Turkey and
Cyprus were heavily impacted by the geo-political issues in the
Middle East, whilst the Russian tours programme was cancelled due
to restrictive new visa regulations that deterred passengers from
booking.
-- Popular Black Sea cruise itineraries to Crimea remain off
limits due to the ongoing political situation in the region.
-- Average Revenue per Passenger was GBP2,360 (2014: GBP2,410)
in the year, the decline driven by the Cruise division as a
consequence of the dry docks for both main vessels.
Strategy
-- The board is actively considering delisting from the AIM market.
-- Achieve profitable growth through the provision of an
increasing choice of niche holidays targeted at the UK over 55's
market.
Commenting on the results the Chairman Roger Allard said
"I am delighted to report that the All Leisure Group closed the
year to 31 October 2015 with an overall Profit after Taxation of
GBP0.5m, compared to a loss of GBP(7.5)m in the prior year. On an
Underlying basis, there was a Profit after tax in the year of
GBP1.0m (2014: profit of GBP0.6m). Trading conditions are however
expected to remain very challenging, especially in view of the
escalating conflict in the Middle East and recent acts of
terrorism, and the effect these events may have on consumers'
propensity to travel.
"My sincere thanks go to all staff across the Group for their
commitment, hard work and dedication throughout the year.
"The board is actively considering delisting from the AIM
market. It is mindful of the on-going costs of remaining as a
publicly quoted company and the limited current and potential
benefits available to the company. A further announcement will be
made in due course."
For further information:
All Leisure Group 01858 410
plc 456
Roger Allard Chairman 07423 431807
Chief Executive
Ian Smith Officer 07776 192855
Group Finance
Nigel Arthur Director 07423 431815
Broker and Nominated Panmure
Adviser Gordon
Andrew Godber/ 020 7886
Charles Leigh-Pemberton 2500
* Underlying figures are stated before certain items that, due
to their material size or nature, are separately disclosed to
provide the user of the financial statements with a clearer
understanding.
All Leisure Group plc
Chairman's Statement
I am delighted to report that the All Leisure Group closed the
year to 31 October 2015 with an overall Profit after Taxation of
GBP0.5m, compared to a loss of GBP(7.5)m in the prior year. On an
underlying* basis, there was a Profit after tax in the year of
GBP1.0m compared to an underlying* Profit of GBP0.6m in 2014.
Operating Profit for the period was GBP0.5m compared to a loss
of GBP(6.9)m in 2014, although on an underlying* basis lower
revenues caused Operating Profit to decline to GBP1.1m from GBP1.3m
in 2014. Revenue for the period was GBP127.3m, down from GBP138.9m
in 2014. This was the result of lower Tour passenger numbers and
fewer cruising days as a result of the time spent in dry dock by
our Cruise vessels.
Our "Travelsphere" and "Just You" brands continued to offer
Escorted Tours to an exciting range of destinations across the
world. Total passenger numbers for Tours were 36.2k, down from
39.8k in 2014, with average revenue per passenger up 2%. Our "Just
You" brand showed growth in passenger numbers of 2%, which was very
pleasing. Passenger numbers to Italy, our most popular destination,
showed growth along with Greece, Canada, Japan and certain
Scandinavian destinations. Demand for tours to Turkey and the
Middle East was sharply down however due to the events in the wider
region, and we cancelled much of our tour programme to Russia as a
result of lower demand and restrictive new visa requirements. Tours
generated an Operating profit of GBP1.4m, down from GBP2.5m in
2014, largely as a result of lower passenger revenues.
In the Cruise business, passengers numbered 17.8k (2014: 17.9k),
slightly reduced due to dry dock maintenance periods for both
Voyager and Minerva, as reported at the half year. However
occupancy of available cabins improved to 77% (2014: 76%). The
cruise division continued to be unprofitable, although the
Operating loss of GBP(2.6)m represented an improvement in
comparison to the Operating loss of GBP(8.9)m in 2014 when a charge
was taken in relation to the disposal of the mv Discovery
vessel.
After the year-end, on 30 November 2015, the Group completed the
GBP3m sale and leaseback of the Hebridean Princess cruise vessel
and certain related assets to HP Shipping, a company owned by a
syndicate of private investors led by myself. The transaction
provided important additional liquidity to the Group, whilst making
the Group less asset intensive and still retaining the business of
the Hebridean Island Cruises division and the positive cash flow it
generates. All scheduled cruises of the division will go ahead as
planned.
Trading conditions are expected to remain very challenging,
especially in view of the escalating conflict in the Middle East
and recent acts of terrorism, and the effect these events may have
on consumers' propensity to travel.
My sincere thanks go to all staff across the Group for their
commitment, hard work and dedication throughout the year.
R J Allard
Chairman
* Underlying figures are stated before certain items that, due
to their material size or nature, are separately disclosed to
provide the user of the financial statements with a clearer
understanding.
Key Performance Indicators
The following table provides current and historical key
performance indicators ('KPI's) employed by the Group:
FY2015 FY2014
GBPm GBPm
Revenues 127.3 138.9
Underlying* operating (loss)/profit
before movement in provision for
value of derivative contracts and
separately disclosed items (1.5) 0.9
Operating loss before movement in
provision for value of derivative
contracts (2.1) (7.3)
Underlying* operating profit for
the financial year 1.1 1.3
Underlying* profit before tax for
the financial year 0.8 1.0
Profit/(loss) before tax for the
financial year 0.2 (7.2)
Net assets 11.8 11.7
Cash generated by operating activities 4.7 4.1
Capital expenditure 4.3 2.4
Total assets 71.6 80.2
Basic profit/(loss) per share (pence) 0.9 (12.1)
Other operating data
The following table provides the current and historical figures
for the principal operating KPIs employed by the Group:
FY2015 FY2014
Passengers carried - cruise 17,758 17,885
Passengers carried - tour
operations 36,178 39,762
Average revenue per passenger
- cruise (GBP) 3,437 3,778
Average revenue per passenger
- tour (GBP) 1,831 1,794
Average revenue per passenger
- overall (GBP) 2,360 2,410
Cruise
Passenger nights (i) 225,907 235,850
Available lower berth nights
("ALBNs") (ii) 294,138 308,668
Occupancy (%) 77% 76%
Fuel consumption (metric
tonnes) (iii) 15,539 15,744
Fuel cost per metric tonne
(GBP) (iii) 305 433
Ships - owned 2 2
Ships - leased 1 1
Notes:
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(i) Calculated as the total passengers carried multiplied by the
total number of revenue sailing days.
(ii) Calculated as the ship capacity multiplied by the total number of revenue sailing days.
(iii) Excludes unrealised gains and losses on fuel hedges and
fuel consumption during Allways charter.
* Underlying figures are stated before certain items that, due
to their material size or nature, are separately disclosed to
provide the user of the financial statements with a clearer
understanding.
All Leisure Group plc
Consolidated Income Statement
For the year ended 31 October 2015
Note 2015 2014
GBP'000 GBP'000
Total Total
Revenue 4,5 127,307 138,912
Costs, expenses and other
income
Operating (102,341) (117,549)
Selling and administrative (22,107) (23,558)
Depreciation 7 (3,797) (3,863)
Amortisation 7 (1,187) (1,253)
Operating loss before movement
in provision for derivative
contracts (2,125) (7,311)
Movement in provision for
derivative contracts 5 2,649 445
Operating profit/(loss) 5,7 524 (6,866)
Investment revenue 4 63 70
Finance costs (387) (429)
Profit/(loss) before tax 200 (7,225)
Tax credit/(charge) 8 343 (258)
Profit/(loss) for the financial
year 5 543 (7,483)
Earnings per share (pence):
Basic 10 0.9p (12.1)p
Diluted 10 0.9p (12.1)p
The results are after separately disclosed items of GBP0.5m
(2014: GBP8.0m), further details of these items are included in
note 6.
All results are derived from continuing operations.
All results are attributable to equity holders of the parent
Company.
All Leisure Group plc
Consolidated Statement of Comprehensive Income
For the year ended 31 October 2015
2015 2014
GBP'000 GBP'000
Total Total
Profit/(loss) for the
financial year 543 (7,483)
Items that will not be
reclassified subsequently
to profit or loss:
Gains on property revaluation - 380
Re-measurement of net
defined benefit obligation (703) (491)
Deferred tax on pensions 141 98
Total comprehensive loss
for the financial year (19) (7,496)
All Leisure Group plc
Consolidated Statement of Changes in Equity
At 31 October 2015
Share Currency
Share premium Revaluation translation Retained
capital account reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 November 2013 617 13,346 23 12 5,239 19,237
Loss for the financial
year - - - - (7,483) (7,483)
Revaluation of property - - 380 - - 380
Re-measurement of
net defined benefit
obligation - - - - (491) (491)
Deferred tax on
pensions - - - - 98 98
Total comprehensive
loss for the financial
year - - 380 - (7,876) (7,496)
Disposal of property - - (23) - 23 -
At 31 October 2014 617 13,346 380 12 (2,614) 11,741
At 1 November 2014 617 13,346 380 12 (2,614) 11,741
Profit for the financial
year - - - - 543 543
Re-measurement of
net defined benefit
obligation - - - - (703) (703)
Deferred tax on
pensions - - - - 141 141
Total comprehensive
loss for the financial
year - - - - (19) (19)
Transfer from revaluation
reserve - - (5) - 5 -
Credit to equity
for share-based
payments - - - - 37 37
At 31 October 2015 617 13,346 375 12 (2,591) 11,759
Revaluation reserve: At 31 October 2014 Budworth Hardcastle, an
external valuer, carried out a valuation of Compass House, Market
Harborough which confirmed the property value at open market value
with vacant possession to be GBP3,750,000.
Currency translation reserve: At 31 October 2015 one of the
Group's subsidiary companies has a US$ functional currency and the
translation reserve represents the exchange gains and losses
arising on the retranslation of the net assets of this subsidiary
entity.
All Leisure Group plc
Consolidated Balance Sheet
At 31 October 2015
2015 2014
GBP'000 GBP'000
Non-current assets
Intangible assets 19,313 20,185
Property, ships, plant
and equipment 27,781 29,132
Trade and other receivables 3,686 3,686
Deferred tax asset 1,813 1,450
52,593 54,453
Current assets
Inventories 1,245 1,402
Trade and other receivables 5,867 9,230
Derivative financial
instruments 140 20
Assets held for sale 1,550 -
------------- -------------
Restricted bank balances 3,226 3,530
Cash and bank balances 6,949 11,600
------------- -------------
Total current bank balances
and cash in hand 10,175 15,130
18,977 25,782
Total assets 71,570 80,235
Current liabilities
Trade and other payables (48,020) (53,532)
Current tax liabilities (5) (17)
Borrowings (580) (580)
Provisions - (1,497)
Derivative financial
instruments (1,903) (4,431)
(50,508) (60,057)
Net current liabilities (31,531) (34,275)
Non-current liabilities
Borrowings (3,474) (4,050)
Deferred tax liabilities (2,037) (2,153)
Retirement benefit obligations (2,578) (2,234)
Long term provisions (1,214) -
(9,303) (8,437)
Total liabilities (59,811) (68,494)
Net assets 11,759 11,741
Equity
Share capital 617 617
Share premium account 13,346 13,346
Revaluation reserve 375 380
Currency translation
reserve 12 12
Retained earnings (2,591) (2,614)
Total equity 11,759 11,741
The financial statements of All Leisure Group plc, registered
number 01609517, were approved by the Board of directors and
authorised for issue on 11 February 2016.
They were signed on its behalf by:
N Arthur
Director
All Leisure Group plc
Consolidated Cash Flow Statement
For the year ended 31 October 2015
2015 2014
Note GBP'000 GBP'000
Net cash inflow from operating
activities 11 4,719 4,077
Investing activities
Interest received 63 70
Rental income 29 6
Proceeds on disposal of property,
ships, plant and equipment - 3,133
Proceeds on disposal of assets
held for sale - 350
Purchases of property, ships,
plant and equipment and intangible
assets (4,311) (2,428)
Movement in restricted cash
held on deposit 304 64
Net cash (used in)/generated
from investing activities (3,915) 1,195
Financing activities
Repayment of borrowings (580) (580)
Net cash used in financing
activities (580) (580)
Net increase in cash and
cash equivalents 224 4,692
Cash and cash equivalents
at beginning of year 11,600 10,685
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Effect of foreign exchange
rate changes (4,875) (3,777)
Cash and cash equivalents
at end of year 6,949 11,600
All Leisure Group plc
Notes to the Preliminary Results
For the year ended 31 October 2015
1. Financial information
The financial information set out in the announcement does not
constitute the Company's statutory financial statements for the
years ended 31 October 2015 or 31 October 2014, but is derived from
those financial statements. Statutory accounts for the year ended
31 October 2014 have been delivered to the Registrar of Companies
and those for the year ended 31 October 2015 will be delivered
following the Company's annual general meeting. The auditor has
reported on those financial statements: their reports were
unqualified, did not draw attention to any matters by way of
emphasis and did not contain statements under s498 (2) or (3) of
the Companies Act 2006.
While the financial information included in this preliminary
announcement has been prepared in accordance with the recognition
and measurement criteria of International Financial Reporting
Standards (IFRSs), this announcement does not itself contain
sufficient information to comply with IFRSs.
The financial statements have been prepared on the historical
cost basis, except for the revaluation of certain properties,
financial instruments and defined benefit scheme related employee
benefits. The principal accounting policies adopted are set out
below. The financial statements have been prepared on a going
concern basis. The responsibility statement below has been prepared
in connection with the Company's full annual report for the year
ended 31 October 2015. Certain parts thereof are not included
within this announcement. We confirm to the best of our
knowledge:
- The financial statements, prepared in accordance with IFRSs as
adopted by the European Union, give
a true and fair view of the assets, liabilities, financial
position and profit and loss of the Company
and the undertakings included in the consolidation taken as a whole; and
- The strategic report includes a fair review of the development
and performance of the business and the position of the Company and
the undertakings included in the consolidation as a whole, together
with a description of the principal risks and uncertainties they
face.
The responsibility statement was approved by the board of
directors on 11 February 2016 and is signed on its behalf by:
Roger Allard - Executive Chairman
Nigel Arthur - Group Finance Director
2. Significant accounting policies
Basis of accounting
The financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRSs) adopted by the
European Union.
The financial statements have been prepared on the historical
cost basis, except for the revaluation of certain properties and
financial instruments. The principal accounting policies adopted
are set out below.
The financial statements have been prepared on a going concern
basis.
The principal accounting policies adopted are set out below.
These policies have been applied consistently unless otherwise
stated.
2. Significant accounting policies (continued)
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the Company
(its subsidiaries) made up to 31 October each year. Control is
achieved when the Company:
- Has power over the investee;
- Is exposed, or has rights, to variable return from its involvement with the investee; and
- Has the ability to use its power to affect its returns.
The Company reassesses whether or not it controls an investee if
facts and circumstances indicate that there are changes to one or
more of the three elements of control listed above.
All subsidiaries are 100% owned and there are no non-controlling
interests in the Group.
Consolidation of a subsidiary begins when the Company obtains
control over the subsidiary and ceases when the Company loses
control of the subsidiary. Specifically, the results of
subsidiaries acquired or disposed of during the year are included
in the Consolidated Income Statements from the date the Company
gains control until the date when the Company ceases to control the
subsidiary.
Where necessary, adjustments are made to the financial
statements of subsidiaries to bring the accounting policies used
into line with the IFRS policies used by the Group.
All intra-group transactions, balances, income and expenses are
eliminated on consolidation.
Going concern
The Directors have, at the time of approving the financial
statements, a reasonable expectation that the Company and the Group
have adequate resources to continue in operational existence for
the foreseeable future. Thus they continue to adopt the going
concern basis of accounting in preparing the financial
statements.
Business combinations
Acquisitions of subsidiaries and businesses are accounted for
using the acquisition method. The consideration for each
acquisition is measured at the aggregate of the fair values (at the
date of exchange) of assets given, liabilities incurred or assumed,
and equity instruments issued by the Group in exchange for control
of the acquiree. Acquisition-related costs are recognised in profit
or loss as incurred.
The acquiree's identifiable assets, liabilities and contingent
liabilities that meet the conditions for recognition under IFRS 3
are recognised at their fair value at the acquisition date, except
that deferred tax assets and liabilities or assets related to
employee benefit arrangements are recognised and measured in
accordance with IAS 12 Income Taxes and IAS 19 Employee benefits
respectively.
Intangible Assets - Goodwill
Goodwill arising in a business combination is recognised as an
asset at the date that control is acquired (the acquisition date).
Goodwill is measured as the excess of the sum of the consideration
transferred and the fair value of the acquirer's previously held
equity over the net of the acquisition-date amounts of the
identifiable assets acquired and the liabilities assumed.
If, after reassessment, the Group's interest in the net fair
value of the acquiree's net assets exceeds the sum of the
consideration transferred, the excess is recognised immediately in
profit or loss as a bargain purchase gain.
Goodwill is not amortised but is reviewed for impairment at
least annually. For the purpose of impairment testing, goodwill is
allocated to each of the Group's cash-generating units expected to
benefit from the synergies of the combination. Cash-generating
units to which goodwill has been allocated are tested for
impairment annually, or more frequently when there is an indication
that the unit may be impaired. If the recoverable amount of the
cash-generating unit is less than the carrying amount of the unit,
the impairment loss is allocated first to reduce the carrying
amount of any goodwill allocated to the unit and then to the other
assets of the unit pro-rata on the basis of the carrying amount of
each asset in the unit. An impairment loss recognised for goodwill
is not reversed in a subsequent period.
On disposal of a subsidiary, the attributable amount of goodwill
is included in the determination of the profit or loss on
disposal.
2. Significant accounting policies (continued)
Intangible assets - Other
Intangible assets other than goodwill with a finite useful life
are carried at cost less amortisation and any impairment losses.
Intangible assets with indefinite useful lives are not amortised.
For all other intangibles, amortisation is charged on a
straight-line basis over the asset's useful life, as follows:
Customer databases 5% - 10%
Trademarks 4%
Computer software 25%
Revenue recognition
Revenue comprises sales to third parties (excluding VAT and
similar sales, port and other taxes).
Cruise revenues and cruise charter revenues, together with
revenues from onboard and other activities, which include
transportation are recognised in income for each day of the cruise
as it progresses. Shore excursion revenue is recognised on the date
of the excursion.
Tour operating revenues, including excursions and other services
supplied to customers in the ordinary course of business, are taken
to the Income Statement on holiday departure.
Client monies received at the balance sheet date relating to
holidays commencing after the year end are deferred and included
within trade and other payables.
Interest income is recognised when it is probable that the
economic benefits will flow to the Group and the amount of income
can be measured reliably. Interest income is accrued on a timely
basis, by reference to the principal outstanding and at the
effective interest rate applicable, which is the rate that exactly
discounts estimated future cash receipts through the expected life
of the financial asset to that asset's net carrying amount.
Other revenue and associated expenses are taken to the Income
Statement as earned or incurred.
Revenue and expenses exclude intra-group transactions.
Foreign exchange
The individual financial statements of each Group company are
presented in the currency of the primary economic environment in
which it operates (its functional currency). For the purpose of the
consolidated financial statements, the results and financial
position of each Group company are expressed in pounds sterling,
which is the functional currency of the Group, and the presentation
currency for the consolidated financial statements.
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In preparing the financial statements of the individual
companies, transactions in currencies other than the entity's
functional currency (foreign currencies) are recorded at the rates
of exchange prevailing on the dates of the transactions. At each
balance sheet date, monetary assets and liabilities that are
denominated in foreign currencies are retranslated at the rates
prevailing at the balance sheet date. Non-monetary items carried at
fair value that are denominated in foreign currencies are
translated at the rates prevailing at the date when the fair value
was determined. Non-monetary items that are measured in terms of
historical cost in a foreign currency are not retranslated.
For the purpose of presenting consolidated financial statements,
the assets and liabilities of the Group's foreign subsidiaries are
translated at exchange rates prevailing on the balance sheet date.
Income and expense items are translated at the average exchange
rates for the period, unless exchange rates fluctuate significantly
during that period, in which case the exchange rates at the date of
transactions are used. Exchange differences arising, if any, are
classified as equity and recognised in the Group's foreign currency
translation reserve. Such translation differences are recognised as
income or as expenses in the period in which the operation is
disposed of.
2. Significant accounting policies (continued)
Borrowing costs
Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, which are assets
that necessarily take a substantial period of time to get ready for
their intended use or sale, are added to the cost of those assets,
until such time as the assets are substantially ready for their
intended use or sale.
All other borrowing costs are recognised in profit or loss in
the period in which they are incurred.
Property, ships, plant and equipment
Land and buildings held for administrative purposes are stated
in the balance sheet at their revalued amounts, being the fair
value at the date of revaluation, less any subsequent accumulated
depreciation and subsequent accumulated impairment losses.
Revaluations are performed with sufficient regularity such that the
carrying amount does not differ materially from that which would be
determined using fair values at the balance sheet date. The
freehold property owned by Page & Moy Travel Group Air Holidays
Ltd was revalued in October 2014.
Any revaluation increase arising on the revaluation of such land
and buildings is credited to the properties' revaluation reserve,
except to the extent that it reverses a revaluation decrease for
the same asset previously recognised as an expense, in which case
the increase is credited to the income statement to the extent of
the decrease previously charged. A decrease in carrying amount
arising on the revaluation of such land and buildings is charged as
an expense to the extent that it exceeds the balance, if any, held
in the properties' revaluation reserve relating to a previous
revaluation of that asset.
Depreciation on revalued buildings is charged to income. On the
subsequent sale of a revalued property, the attributable
revaluation surplus remaining in the properties' revaluation
reserve is transferred directly to retained earnings.
Freehold land is not depreciated.
Property, ships, plant and equipment are stated at cost or
valuation less accumulated depreciation and any impairment in
value.
Depreciation is provided on all property, dry docks, ship
improvements and plant and equipment, other than freehold land, at
rates calculated to write off the cost or revalued amount, less
estimated residual value of each asset evenly over its expected
useful life, as follows:
Freehold buildings 2% per annum straight line
Cruise ships 5% - 100% per annum straight
line
Leasehold improvements Over lease period
Office equipment 25% per annum straight line
Computer equipment 33% per annum straight line
Motor vehicles 25% per annum straight line
The carrying values of property, ships, plant and equipment are
reviewed for impairment if events or changes in circumstances
indicate the carrying value may not be recoverable.
The assets' residual values, useful lives and depreciation
methods are reviewed, and adjusted if appropriate, at each
financial year end. Further details regarding the residual values
of the cruise ships are provided in note 3.
Costs relating to mandatory cruise ship dry docks are
capitalised and depreciated over the period up to the next dry dock
where appropriate.
An item of property, ships and equipment is derecognised upon
disposal or when no future economic benefits are expected to arise
from the continued use of the asset. Any gain or loss arising on
the disposal or retirement of an item of property, ships and
equipment is determined as the difference between sales proceeds
and the carrying amount of the asset and is recognised in profit or
loss.
2. Significant accounting policies (continued)
Non-current assets held for sale
The Group classifies non-current assets held for sale if their
carrying amount will be recovered through a sale transaction rather
than through continuing use. To be classified as held for sale, the
asset must be available for immediate sale in its present condition
subject only to terms that are usual and customary for the sale of
such assets, and their sale must be highly probable. Management
must be committed to the sale which should be expected to qualify
for recognition as a completed sale within one year from the date
of classification.
Non-current assets classified as held for sale are carried on
the Group's balance sheet at the lower of their carrying amount and
fair value less costs to sell.
Impairment of tangible and intangible assets
At the end of each reporting period, the Group reviews the
carrying amounts of its tangible and intangible assets to determine
whether there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent
of the impairment loss (if any). Where the asset does not generate
cash flows that are independent from other assets, the Group
estimates the recoverable amount of the cash-generating unit to
which the asset belongs.
Recoverable amount is the higher of fair value less costs to
sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset for
which the estimates of future cash flows have not been
adjusted.
If the recoverable amount of an asset (or cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (or cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised in the income
statement as an expense immediately, unless the relevant asset is
carried at a revalued amount, in which case the impairment loss is
treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying
amount of the asset (or cash-generating unit) is increased to the
revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognised
for the asset (or cash-generating unit) in prior years. A reversal
of an impairment loss is recognised as income immediately, unless
the relevant asset is carried at a revalued amount, in which case
the reversal of the impairment loss is treated as a revaluation
increase.
Financial instruments
Financial assets and financial liabilities are recognised on the
Group's balance sheet at fair value when the Group becomes a party
to the contractual provisions of the instrument.
2. Significant accounting policies (continued)
Financial instruments (continued)
Financial assets
All financial assets are recognised and derecognised on a trade
date where the purchase or sale of a financial asset is under a
contract whose terms require delivery of the financial asset within
the timeframe established by the market concerned, and are
initially measured at fair value, plus transaction costs, except
for those financial assets classified as at fair value through
profit or loss, which are initially measured at fair value.
Financial assets are classified into the following specified
categories: financial assets 'at fair value through profit or loss'
(FVTPL), 'held-to-maturity' investments, 'available-for-sale' (AFS)
financial assets and 'loans and receivables'. The classification
depends on the nature and purpose of the financial assets and is
determined at the time of initial recognition. Currently the Group
does not have any financial assets that are classified as 'held to
maturity' or 'available-for-sale'.
Loans and receivables
Trade receivables, loans, and other receivables that have fixed
or determinable payments that are not quoted in an active market
are classified as 'loans and receivables'. Loans and other
receivables are measured at amortised cost using the effective
interest method, if the time value of money is significant, less
any provision for impairment. Gains and losses are recognised in
income when the loans and receivables are derecognised or impaired.
This category of financial asset includes trade receivables.
Financial assets at FVTPL
Financial assets are classified as at FVTPL when the financial
asset is either held for trading or is designated as at FVTPL. A
financial asset is classified as held for trading if:
- It has been acquired principally for the purpose of selling in the near term; or
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- On initial recognition it is part of a portfolio of identified
financial instruments that the Group manages together and has a
recent actual pattern of short-term profit-taking; or
- It is a derivative that is not designated and effective as a hedging instrument.
Financial assets at FVTPL are stated at fair value, with any
gains or losses arising on re-measurement recognised in profit or
loss. Financial assets at FVTPL can include the Group's fuel and
foreign currency derivatives.
Bank balances and cash in hand
Restricted cash comprises cash deposits which have restrictions
governing their use and are classified as current or non-current
dependent on the remaining length of the restriction, which is
determined from contractual terms governing the restriction. Cash
and cash equivalents comprise cash in hand, cash held in bank
accounts with no access restrictions and bank or money market
deposits repayable on demand or maturing within three months of
inception. If the bank or money market deposits have an original
maturity of three months or more these are disclosed as 'interest
bearing bank deposits' outside cash and cash equivalents. This
reflects the contractual terms of the deposit agreements such that
whilst the Group often has immediate access to the bank deposits,
the counterparty has the right to restrict interest payments in the
event of early withdrawal. Interest income on these balances is
recognised using the effective interest method.
Impairment of financial assets
Financial assets, other than those at FVTPL, are assessed for
indicators of impairment at each balance sheet date. Financial
assets are impaired where there is objective evidence that, as a
result of one or more events that occurred after the initial
recognition of the financial asset, the estimated future cash flows
of the asset have been reduced.
For certain categories of financial asset, such as trade
receivables, assets that are assessed not to be impaired
individually are subsequently assessed for impairment on a
collective basis.
If, in a subsequent period, the amount of the impairment loss
decreases and the decrease can be related objectively to an event
occurring after the impairment was recognised, an appropriate
portion of the loss previously recognised is reversed.
2. Significant accounting policies (continued)
Financial instruments (continued)
De-recognition of financial assets
The Group derecognises a financial asset only when the
contractual rights to the cash flows from the asset expire; or it
transfers the financial asset and substantially all the risks and
rewards of ownership of the asset to another entity. If the Group
neither transfers nor retains substantially all the risks and
rewards of ownership and continues to control the transferred
asset, the Group recognises its retained interest in the asset and
an associated liability for amounts it may have to pay. If the
Group retains substantially all the risks and rewards of ownership
of a transferred financial asset, the Group continues to recognise
the financial asset and also recognises a collateralised borrowing
for the proceeds received.
Financial liabilities
Financial liabilities are classified as either financial
liabilities 'at FVTPL' or 'other financial liabilities' measured at
amortised cost.
Financial liabilities at amortised cost
Other financial liabilities, including borrowings, are initially
measured at fair value, net of transaction costs. Other financial
liabilities are subsequently measured at amortised cost using the
effective interest method, with interest expense recognised on an
effective interest basis. The effective interest method is a method
of calculating the amortised cost of a financial liability and of
allocating interest expense over the relevant period. The effective
interest rate is the rate that exactly discounts estimated future
cash payments through the expected life of the financial liability,
or, where appropriate, a shorter period. This category of financial
liabilities includes trade payables, accruals, deferred income and
borrowings.
Financial liabilities at FVTPL
Financial liabilities are classified as at FVTPL where the
financial liability is either held for trading or it is designated
as at FVTPL.
The financial liabilities that can be classified as FVTPL are
the derivative instruments that are not designated and effective as
hedging instruments (see the derivative accounting policy
below).
Financial liabilities at FVTPL are stated at fair value, with
any gains or losses arising on re-measurement recognised in profit
or loss. The net gain or loss recognised in profit or loss
incorporates any interest paid on the financial liability.
De-recognition of financial liabilities
The Group derecognises financial liabilities when, and only
when, the Group's obligations are discharged, cancelled or they
expire.
Derivative financial instruments
The Group has chosen to measure all its fuel and currency
derivatives at fair value through profit and loss (FVTPL), with the
movement being disclosed on the face of the income statement.
A derivative is presented as a non-current asset or a
non-current liability if the remaining maturity of the instrument
is more than 12 months and it is not expected to be realised or
settled within 12 months. Other derivatives are presented as
current assets or current liabilities.
2. Significant accounting policies (continued)
Equity instruments
An equity instrument is any contract that evidences a residual
interest in the assets of the Group after deducting all of its
liabilities. Equity instruments issued by the Group are recorded at
the proceeds received, net of direct issue costs.
Share capital and share premium account
There is one class of shares. When new shares are issued, they
are recorded in share capital at their par value. The excess of the
issue price over the par value is recorded in the share premium
account. Incremental external costs directly attributable to the
issue of new shares are recorded in equity as a deduction, net of
tax, in the share premium account.
Dividends
Dividends are provided for in the period in which they become a
binding liability on the Company.
Provisions
A provision is recognised in the balance sheet when the Group
has a present obligation (legal or constructive) as a result of a
past event, it is probable that an outflow of economic benefits
will be required to settle the obligation and a reliable estimate
can be made of the amount of the obligation. Provisions are
measured at the Directors' best estimate of the expenditure
required to settle the obligation at the balance sheet date, and
are discounted to present value where the effect is material.
When some or all of the economic benefits required to settle a
provision are expected to be recovered from a third party, a
receivable is recognised as an asset if it is virtually certain
that reimbursement will be received and the amount of the
receivable can be measured reliably.
Inventories
Inventories representing engineering spares, fuels, lubricants
and consumables are stated at the lower of cost (being purchase
price to the Group) and net realisable value.
Where necessary, provision is made for obsolete and damaged
stocks.
Leases
Leases taken by the Group are assessed individually as to
whether they are finance leases or operating leases.
Leases where the lessor retains substantially all the risks and
benefits of ownership of the asset are classified as operating
leases. Operating lease rental payments are recognised as an
expense in the income statement on a straight-line basis over the
lease term. The benefit of any lease incentives is spread over the
term of the lease.
All Group leases (which include Bareboat Charter agreements) are
classified as operating leases.
Taxation
The tax expense represents the sum of current tax expense and
deferred tax expense.
Current tax payable is based on taxable profit for the year.
Taxable profit differs from net profit as reported in the Income
Statement because it excludes some of the items of income or
expense that are taxable or deductible in other years and it
further excludes items that are never taxable or deductible. The
Group's liability for current tax is calculated using tax rates
that have been enacted or substantively enacted by the balance
sheet date. Certain of the Group subsidiary companies are subject
to taxation under the UK Tonnage Tax regime. Under this regime, a
shipping company may elect to have its taxable profits computed by
reference to the net tonnage of each of the qualifying ships it
operates.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable profit, and is accounted for using the
balance sheet liability method. Deferred tax liabilities are
generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which
deductible temporary differences can be utilised. Such assets and
liabilities are not recognised if the temporary difference arises
from the initial
2. Significant accounting policies (continued)
Taxation (continued)
recognition of goodwill or from the initial recognition (other
than in a business combination) of other assets and liabilities in
a transaction that affects neither the taxable profit nor the
accounting profit.
The carrying amount of deferred tax assets is reviewed at each
balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the asset to be recovered.
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Deferred tax liabilities are recognised for taxable temporary
differences arising on investment in subsidiaries, except where the
Group is able to control the reversal of the temporary difference
and it is probable that the temporary difference will not reverse
in the foreseeable future.
Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled or the asset is
realised based on tax laws and rates that have been enacted or
substantively enacted at the balance sheet date. Deferred tax is
charged or credited in the income statement, except when it relates
to items charged or credited in other comprehensive income, in
which case the deferred tax is also dealt with in other
comprehensive income.
Deferred tax assets and liabilities are offset when there is a
legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes levied
by the same taxation authority and the Group intends to settle its
current tax assets and liabilities on a net basis.
Share-based payment
Equity-settled share-based payments to employees are measured at
the fair value of the equity instruments at the grant date.
The fair value determined at the grant date of the
equity-settled share-based payments is expensed on a straight-line
basis over the vesting period, based on the Group's estimate of
equity instruments that will eventually vest. At each balance sheet
date, the Group revises its estimate of the number of equity
instruments expected to vest as a result of the effect of
non-market-based vesting conditions. The impact of the revision of
the original estimates, if any, is recognised in profit or loss
such that the cumulative expense reflects the revised estimate,
with a corresponding adjustment to equity reserves.
Retirement benefit costs
The Group operates defined contribution pension schemes. The
assets of the schemes are held separately from those of the Group
in independently administered funds. The amount charged to the
income statement in respect of pension costs and other
post-retirement benefits is the contributions payable in the
year.
Differences between contributions payable in the year and
contributions actually paid are shown as either accruals or
prepayments in the balance sheet.
The Group also operates a defined benefit scheme. The pension
liabilities recognised on the balance sheet in respect of this
scheme represent the difference between the present value of the
Group's obligations under the scheme (calculated using the
projected unit credit method) and the fair value of the scheme's
assets. Actuarial gains or losses are recognised in the period in
which they arise within the consolidated statement of comprehensive
income. The current service cost, representing benefits accruing
over the year, is included in the consolidated income statement as
an administrative expense. The unwinding of the discount rate on
the scheme liabilities and the expected return on scheme assets are
presented as investment revenues. Past service costs are recognised
immediately in the income statement as administrative expenses.
Operating profit
Operating profit is stated before investment revenues and
finance costs.
2. Significant accounting policies (continued)
Income statement presentation and separately disclosed items
Certain items are disclosed separately to enable a better
understanding of the Group's results. These include:
-- Asset impairment charges
-- Profit/Loss on disposal of significant assets (e.g. vessels)
-- Amortisation of business combination intangibles
-- Other items that because of their size, nature or incidence merit separate disclosure.
3. Critical accounting judgements and key sources of estimation uncertainty
In the application of the Group's accounting policies, which are
described in note 2, the Directors are required to make judgements,
estimates and assumptions about the carrying amounts of assets and
liabilities that are not readily apparent from other sources. The
estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant.
Actual results may differ from these estimates. The estimates and
underlying assumptions are reviewed on an ongoing basis. Revisions
to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period or in
the period of the revision and future periods if the revision
affects both current and future periods.
Residual value of cruise ships
The residual value of the Group's cruise ships is measured at
scrap value, which is based on an estimate provided by independent
specialists. Ship residual values are determined in US Dollars or
Euros and are therefore subject to foreign exchange risk. Residual
values are reviewed annually to take account of market
conditions.
Valuation of derivative financial instruments
The Group has derivative assets and liabilities on its balance
sheet as at 31 October 2014 and 31 October 2015, which are carried
at fair value as required by IAS 39, Financial instruments:
Recognition and Measurement. The calculation of fair value involves
judgements and is performed by independent experts.
Retirement benefits
The consolidated financial statements include costs in relation
to, and provision for, retirement benefit obligations. The costs
and the present value of any related pension assets and liabilities
depend on such factors as life expectancy of the members, the
salary progression of current employees, the returns that plan
assets generate and the discount rate used to calculate the present
value of the liabilities. The Group uses previous experience and
independent actuarial advice to select the values of critical
estimates.
Revaluation of land and buildings
The Group's land and buildings are carried at a revalued amount.
Valuations are undertaken by an independent firm of Chartered
Surveyors.
3. Critical accounting judgements and key sources of estimates uncertainty (continued)
Impairment of assets
The Group has completed a detailed impairment review of certain
assets as detailed below. Based on these reviews, the Group is
satisfied that the assets are not impaired at the balance sheet
date.
Goodwill
GBP'000
Carrying value at 31 October 2015 9,517
Determining whether goodwill is impaired requires an estimation
of the value in use of the Cash Generating Unit to which goodwill
has been allocated.
In determining the recoverable amount, the Group has used the
following principal inputs:
Measure
Discount rate - pre tax 12.9%
Cash flow forecast period 5 years +
terminal value
Growth rate 0%
Ship values
GBP'000
Carrying value at 31 October 2015 20,983
During the year the Group has undertaken an impairment review of
mv Voyager, and has used the following principle inputs in
determining the recoverable amount:
Measure
Discount rate - pre tax 12.9%
Cash flow forecast period 15 years
Rate of increase of annual profit beyond
the budget period 0%
Rate of increase of central overhead
costs beyond the budget period 2%
4. Revenue
An analysis of the Group's revenue is as follows:
2015 2014
GBP'000 GBP'000
Continuing operations
Sales of cruise holidays and ancillary
services 61,070 67,567
Sales of escorted tours and ancillary
services 66,237 71,345
127,307 138,912
Investment revenue 63 70
127,370 138,982
Ancillary services revenue included within sales of cruise
holidays and ancillary services includes all revenue derived
directly from the cruise holidays sold, other than the principal
cruise. Ancillary services revenue includes excursions revenue and
on board revenue such as bar, laundry and other. None of these
revenue streams account for more than 10% of the overall revenue
and are considered by the Directors to be a component of the
overall revenues derived on cruises.
Ancillary service revenue included within sales of escorted
tours and ancillary services includes non- inclusive tours, visa
services and flight upgrades. None of these revenue streams account
for more than 10% of the overall revenue and are considered by the
Directors to be components of the overall revenues derived on
escorted tours.
5. Business and geographical segments
The Group has identified two reporting segments: Cruising
(including the Voyages of Discovery, Swan Hellenic and Hebridean
Island Cruises brands) and Tour Operating (including the
Travelsphere, Just You and Discover Egypt brands).
Reporting segment revenues and results
The following is an analysis of the Group's revenue and results
by reportable segments in 2015.
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Central salary costs and the movement in provision for
derivative financial instruments have not been allocated to either
of the Group's two reporting segments and are shown separately as
Corporate items.
Tour
Cruising Operating Corporate Consolidated
2015 2015 2015 2015
GBP'000 GBP'000 GBP'000 GBP'000
Revenue
External sales 61,070 66,237 - 127,307
Result
Underlying* (loss)/profit
from operations (2,649) 2,075 (961) (1,535)
Separately disclosed
items 94 (187) - (93)
Amortisation of business
combination intangibles - (497) - (497)
Operating (loss)/profit
before adjustment for
derivative financial
instruments (2,555) 1,391 (961) (2,125)
Movement in provision
for derivative financial
instruments - - 2,649 2,649
Operating (loss)/profit (2,555) 1,391 1,688 524
Investment revenues 63
Finance costs (387)
Profit before tax 200
Tax credit 343
Profit for the financial
year 543
* Underlying figures are stated before certain items that, due
to their material size or nature, are separately disclosed to
provide the user of the financial statements with a clearer
understanding.
5. Business and geographical segments (continued)
The following is an analysis of the Group's revenue and results
by reportable segments in 2014:
Tour
Cruising Operating Corporate Consolidated
2014 2014 2014 2014
GBP'000 GBP'000 GBP'000 GBP'000
Revenue
External sales 67,567 71,345 - 138,912
Result
Underlying* (loss)/profit
from operations (1,627) 3,510 (987) 896
Separately disclosed items (7,224) (486) - (7,710)
Amortisation of business
combination intangibles - (497) - (497)
Operating (loss)/profit
before adjustment for derivative
financial instruments (8,851) 2,527 (987) (7,311)
Movement in provision for
derivative financial instruments - - 445 445
Operating (loss)/profit (8,851) 2,527 (542) (6,866)
Investment revenues 70
Finance costs (429)
Loss before tax (7,225)
Tax charge (258)
Loss for the financial
year (7,483)
* Underlying figures are stated before certain items that, due
to their material size or nature, are separately disclosed to
provide the user of the financial statements with a clearer
understanding.
Segment assets
2015 2014
GBP'000 GBP'000
Cruising 28,450 36,788
Tour operating 38,663 38,904
Total segment assets 67,113 75,692
Unallocated assets 4,457 4,543
Consolidated total
assets 71,570 80,235
The unallocated corporate assets primarily relate to Group
properties.
5. Business and geographical segments (continued)
Other segment information
Depreciation Additions to
and non-current
amortisation assets
2015 2014 2015 2014
GBP'000 GBP'000 GBP'000 GBP'000
Cruising 3,949 4,140 3,701 1,638
Tour operating 650 684 315 114
Unallocated 385 292 295 676
4,984 5,116 4,311 2,428
Geographical segments
The following table provides an analysis of the Group's sales by
geographical market, irrespective of the origin of the
goods/services and the location of the Group's non-current
assets:
Sales revenue Non-current
by assets
geographical
market
2015 2014 2015 2014
GBP'000 GBP'000 GBP'000 GBP'000
UK 120,409 124,648 52,593 54,453
USA 4,869 4,790 - -
Rest of the world 2,029 9,474 - -
127,307 138,912 52,593 54,453
Revenues are attributed to individual countries on the basis of
region of booking.
6. Separately disclosed items
2015 2014
GBP'000 GBP'000
Operating items - income/(expense)
Onerous lease provision 168 104
Restructuring costs (261) (719)
Loss on disposal of ship - (7,095)
Amortisation of business combination
intangibles (497) (497)
Total operating items (590) (8,207)
Deferred tax on business combination
intangibles 99 172
Total separately disclosed items (491) (8,035)
In 2012 the Group made an onerous lease provision in respect of
losses anticipated to be incurred from the bareboat charter of mv
Voyager to a third party. During the year, the Group successfully
rejected the outstanding claim and GBP168k has been released back
to the income statement in respect of this.
Restructuring costs of GBP261k (2014: GBP719k) have arisen
during the year as a result of the closure of the Group's office in
Fort Lauderdale and other redundancy costs. Restructuring costs in
the prior year relate to the ongoing integration of the cruise and
tour operating businesses.
Certain business combination intangible assets were recognised
on acquisition of Page & Moy Travel Group Limited. The
amortisation of these intangible assets is separately disclosed to
enable a full understanding of the Group's results.
Items relating to prior year
In 2013 the Group announced the closure of its offices in
Southampton. An onerous lease provision of GBP139k was recognised
in 2013 in respect of the ongoing lease commitment for the
Southampton premises. In 2014 the Group entered into a contract to
sub-lease this office and therefore the remaining balance on the
onerous lease provision of GBP104k was released back to the income
statement.
In October 2014 the Group disposed of mv Discovery incurring a
loss on disposal of GBP7,095k.
7. Operating proft/(loss)
2015 2014
GBP'000 GBP'000
Operating profit/(loss) has been arrived
at after charging/(crediting):
Foreign exchange loss 4,875 3,777
Depreciation of property, ships,
plant and equipment 3,797 3,863
Amortisation of intangible assets 1,187 1,253
Cost of inventories recognised as
expense 8,850 13,184
Loss on disposal of ships - 7,095
Staff costs 9,950 10,501
Credit arising from a release of
a contractual arrangement (note 6) (168) (104)
Other separately disclosed items
(note 6) 261 719
8. Tax (credit)/charge
a) Tax (credit)/charge on proft/(loss)
2015 2014
GBP'000 GBP'000
Corporation tax
- Current year 5 17
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* Adjustment with respect to prior years (10) -
(5) 17
Deferred tax (338) 241
Total tax (credit)/charge (343) 258
Corporation tax is calculated at 20.4% (2014: 21.8%) of the
estimated taxable profit for the year.
8. Tax (credit)/charge (continued)
(b) Factors affecting the tax (credit)/charge for the year
The tax assessed for the year differs from (2014: differs from)
that resulting from applying the standard rate of corporation tax
in the UK of 20.4% (2014: 21.8%). The differences are explained
below:
2015 2014
GBP'000 GBP'000
Profit/(loss) before tax:
Continuing operations 200 (7,225)
Tax at the UK corporation tax rate
of 20.4% (2014: 21.8%) 41 (1,575)
Adjustments from income taxed under
the tonnage tax regime 566 2,279
Expenses not allowable for tax purposes 79 18
Income not taxable (348) (171)
Brought forward losses utilised in
year (386) (369)
Unutilised losses carried forward 25 8
Current year losses utilised (3) -
Capital allowances less than/(in excess)
of depreciation 102 (181)
Other timing differences (71) 8
Adjustment in respect of prior years (10) -
Deferred tax movement (338) 241
Total tax (credit)/charge (343) 258
For accounting periods beginning on or after 1 January 2000 a
shipping Company or Group may elect to have its taxable profits
computed by reference to the net tonnage of each qualifying ship it
operates subject to meeting various conditions. Accordingly, the
profits or losses arising from the cruising segment are not subject
to taxation under the normal corporation tax regime.
In addition to the amount recognised in the income statement,
the following amounts relating to tax have been recognised in other
comprehensive income:
2015 2014
GBP'000 GBP'000
Deferred tax:
Items that will not be reclassified
subsequently to profit or loss:
Re-measurement of net defined benefit
liability 141 98
141 98
(c) Factors affecting future tax charge
At the balance sheet date, the Finance Act 2013 had been
substantively enacted confirming that the main UK corporation tax
rate will be 20% from 1 April 2015. Therefore, at 31 October 2015,
deferred tax assets and liabilities have been calculated based on a
rate of 20%.
At summer budget 2015, the government announced legislation
setting the corporation tax rate at 19% for the years starting 1
April 2017, 2018 and 2019 and at 18% for the year starting 1 April
2020.
9. Dividends
No dividends were paid in the year (2014:nil). It was announced
on 27 July 2012 that the Group is proposing not to pay dividends
for the foreseeable future.
10. Earnings per share
2015 2014
Basic and diluted profit/(loss) per
share Pence Pence
Basic 0.9 (12.1)
Diluted 0.9 (12.1)
The calculation of the basic and diluted earnings per share is
based on the following data:
Earnings GBP'000 GBP'000
Earnings for the purposes of basic
and diluted earnings per share being
net profit/(loss) attributable to
equity holders of the parent 543 (7,483)
Number of shares No. No.
Weighted average number of ordinary
shares for the purposes of basic and
diluted earnings per share 61,744,777 61,744,777
All results derive from continuing operations and accordingly
total earnings per share and earnings per share from continuing
operations are the same.
2015 2014
Underlying* basic and diluted profit
per share Pence Pence
Basic 1.7 0.9
Diluted 1.7 0.9
* The underlying profit is calculated as profit before
separately disclosed items (please see note 6 for further
details).
11. Notes to the cash flow statement
2015 2014
GBP'000 GBP'000
Profit/(loss) for the financial year 543 (7,483)
Adjustments for:
Investment revenues (63) (70)
Rental income (29) (6)
Finance costs 387 429
Other gains and losses - 6,132
Income tax (credit)/charge (343) 258
Depreciation and amortisation 4,984 5,116
Foreign exchange movements 4,875 3,777
Movement in fair value of derivatives (2,649) (445)
Decrease in provisions (283) (293)
Adjustment for pension funding (440) (440)
Share-based payment expense 37 -
Operating cash flows before movements
in working capital 7,019 6,975
Decrease in inventories 157 910
Decrease in receivables 3,363 324
Decrease in payables (5,487) (3,762)
Cash inflow generated from operations 5,052 4,447
Income taxes paid (8) (5)
Interest paid (325) (365)
Net cash inflow from operating activities 4,719 4,077
12. 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 other
related parties are disclosed below:
Trading transactions
During the year, Group companies entered into the following
transactions with related parties who are not members of the
Group:
Purchase of Amounts owed
services to
Years ended related parties
31 October At 31 October
2015 2014 2015 2014
GBP GBP GBP GBP
Roger Allard Limited 159,889 184,317 89,843 52,865
PB Consultancy Services
Limited 14,396 12,950 5,897 2,508
Roger Allard Limited is a company owned and controlled by Mr R J
Allard a Director of the Company and majority shareholder of the
Group and the payments made are for consultancy services.
PB Consultancy Services Limited is owned and controlled by Mr P
E Buckley the Company Secretary of the Group and the payments are
for consultancy, accounting and Company Secretarial services.
In addition to the above transactions, the Group sold a property
to Mr R J Allard for GBP350,000 during the year ended 31 October
2014.
On 15 May 2012, All Leisure Group PLC acquired 100% of the
issued share capital of Page & Moy Travel Group Limited
("PMTGL"), on a debt free basis, for a consideration of GBP3.3m.
The consideration was funded with a GBP5.8m loan from a consortium
of individual investors, some of whom were related parties. The
lenders who meet the definition of related parties, and the amounts
loaned to the Group are as follows:
Loan Amount
Year ended Interest accrued
31 October At 31 October
2015 2014 2015 2014
GBP GBP GBP GBP
R J Allard and interests 3,230,000 3,620,000 104,687 117,328
N J Jenkins 175,000 200,000 5,672 6,482
D A Wiles and interests 280,000 320,000 9,075 10,372
N J Jenkins is a director and shareholder in All Leisure Group
plc. D A Wiles is a Director of All Leisure Holidays Limited, a
subsidiary of All Leisure Group plc.
Remuneration of key management personnel
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The remuneration of the Directors of the Company and subsidiary
Company Directors, who are the key management personnel of the
Group, is set out below in aggregate for each of the categories
specified in IAS 24 Related Party Disclosures.
2015 2014
GBP'000 GBP'000
Short-term employee benefits 1,965 1,755
Post-employment benefits 86 73
13. Principal risks and uncertainties
The Directors continually identify, evaluate and manage material
risks faced by the Group which could adversely affect the Group's
business. The list below details the principal risks identified by
the Directors and the action taken to mitigate these risks. This
list is not intended to be exhaustive and other risks may emerge
over time:
Area Description of risk Examples of mitigating
activities
Economic
* Revenue may be impacted by an economic downturn. * The Group invests in brand awareness and pays
significant attention to customer feedback in order
to maximise brand loyalty.
* Volatility in currency and fuel markets can impact
operating results.
* The Group continues to hedge its currency and fuel
requirements as part of its financial planning.
Geopolitics
* The Group is at risk of geo-political events or * The Group plans its itineraries with care and offers
natural disasters affecting our business. Events of a broad geographic spread of destinations within its
terrorism and war can have a significant impact upon products. In the event of a major event, the Group
customer behaviour, and may unexpectedly disrupt the endeavours to respond quickly to the issue and
travel industry minimise its ongoing exposure.
Competition
* The Group operates in a highly competitive market in * We undertake market research to ensure that our own
which our competitors continually launch new products continue to meet the needs of our customers
products. This could lead to loss of revenue and and we plan new product development with care to
market share. ensure that we have products that remain focused on
our niche market.
Regulation
* Changes to legislation (principally regarding the * The Group closely monitors regulatory developments
operation of cruise shipping) could result in the across the travel industry through its active
Group's vessels (mv Minerva and mv Voyager) becoming membership of industry bodies and the Directors'
uneconomic or inoperable. mv Voyager is owned by the significant contacts and experience in the travel
Group and this could further impact the carrying industry.
value of this significant asset.
* The Group manages cash levels carefully in order to
* The Group must satisfy Civil Aviation Authority meet any unexpected operational expenditure that may
("CAA") and Association of British Travel Agents arise.
("ABTA") licensing conditions for airlines and
package holidays. Failure to fulfil CAA and ABTA
licensing conditions could result in substantial * The Group continually reviews the operating assets to
fines and reputational damage and, in the very worst plan any replacements and the timing of replacement.
case, an inability to trade due to loss of licence.
* The Group adheres to all safety regulations imposed
upon it and liaises closely with its regulators and
industry groups to ensure it is abreast of all
matters.
* The Group actively ensures regulations are adhered to
through the tracking of key licensing parameters on a
periodic basis throughout the course of the year and
as part of the annual budget process.
13. Principal risks and uncertainties (continued)
Area Description of risk Examples of mitigating
activities
Operational
* The Group's ships carry a risk of operational failure * All ships operated by the Group are maintained
and/or causing environmental damage thus impacting according to the required maritime standards,
revenues and/or costs. including two dry dock inspections per ship in every
five year period for mv Minerva and mv Voyager and
annual dry dock inspections for mv Hebridean
* The Group outsources a significant element of its Princess.
cruise operations (namely hotel services and deck and
engine maintenance) to third parties. Any damage to
these relationships could have a detrimental impact * The Executive Directors meet regularly with the
on our business. Group's key suppliers in order to maintain good
working relationships.
* The tour operating division of the business is
reliant on the delivery of acceptable standards of
service by overseas suppliers. A failure by these * Service level agreements are entered into with
hoteliers, coach companies and other ancillary suppliers and overseas inspection visits are
service providers to maintain expected high standards undertaken. These inspection visits include quality
of quality could result in business disruption, control and health and safety assessments. The Group
reputational damage and loss of profits through also conducts thorough post-departure customer
customer compensation claims. satisfaction reviews, the results of which are
considered on a supplier by supplier basis during the
following year's supplier contracting process.
* The Group is dependent on information technology
systems, the failure of which would impact its
ability to process sales.
* Investment in technology ensures that system
reliability is optimised and procedures are in place
to minimise the time that any selling system is
inoperable.
Financial
* A significant proportion of the Group's cost base is * Key performance indicators are closely monitored to
fixed and therefore a substantial reduction in ensure that performance is understood and corrective
revenue would impact profitability. actions taken where necessary.
* The Group has significant dollar and euro denominated * The Group uses forward currency contracts over a
operating costs whilst the majority of the group's 12-month horizon to manage the Group's foreign
Revenue is sterling denominated. Weakness of Sterling exchange exposure.
therefore impacts the profitability of the group.
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